UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended ~~September 30, 2022~~March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-38762

BiomX Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		82-3364020
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

22 Einstein St., 4^th Floor, Ness Ziona, Israel		7414003
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: +972 723942377

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one share of common stock, $0.0001 par value, and one Warrant entitling the holder to receive ~~one-half~~one half share of common stock	PHGE.U	NYSE American
Common stock, $0.0001 par value	PHGE	NYSE American
Warrants, each exercisable for one-half of a share of common stock, $0.0001 par value, at an exercise price of $11.50 per share	PHGE.WS	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 4, 2022, 29,982,282~~May 9, 2023, 45,979,730 shares of common stock, par value $0.0001 per share, were issued and outstanding.

BIOMX INC.

FORM 10-Q FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2022~~MARCH 31, 2023

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This quarterly report on Form 10-Q, or the Quarterly Report, includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and other securities laws. The statements contained herein that are not purely historical, are forward-looking statements. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. For example, we are making forward-looking statements when we discuss operations, cash flows, financial position, business strategy and plans, market ~~size,~~growth, our clinical and pre-clinical development program, including ~~recruitment,~~ timing and milestones thereof as well as the design thereof, including acceptance of regulatory agencies of such design, the potential opportunities for and benefits of the BacteriOphage Lead to Treatment, or BOLT, platform, the potential of our product candidates, the potential effect of the coronavirus disease 2019, or COVID-19, on our business and levels of expenses, ~~the~~ sufficiency of financial resources and financial needs and impacts of changes in our management ~~and the corporate restructuring we announced on May 24, 2022~~ on our business. However, you should understand that these statements are not guarantees of performance or results, and there are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others:

●

the ability to generate revenues, and raise sufficient financing to meet working capital requirements;

●

the unpredictable timing and cost associated with our approach to developing product candidates using phage technology;

●

political and economic instability, including, without limitation, due to natural disasters or other catastrophic events, such as the Russian invasion of Ukraine and world sanctions on Russia, Belarus, and related parties, terrorist attacks, hurricanes, fire, floods, pollution and earthquakes;

●

political, economic and military instability in the ~~continued impact~~State of ~~COVID-19, general economic conditions, our current low stock price~~Israel, and in particular, the proposed judicial and other ~~factors on our operations,~~legislation by the ~~continuity of our business, including our preclinical and clinical trials, and our ability to raise additional capital;~~Israeli government;

●

obtaining U.S. Food and Drug Administration, or FDA, acceptance of any non-U.S. clinical trials of product candidates;

●

our ability to enroll patients in clinical trials and achieve anticipated development milestones when expected;

●

the ability to pursue and effectively develop new product opportunities and acquisitions and to obtain value from such product opportunities and acquisitions;

●

penalties and market withdrawal associated with any unanticipated problems with product candidates and failure to comply with labeling and other restrictions;

●

expenses associated with compliance with ongoing regulatory obligations and successful continuing regulatory review;

●

market acceptance of our product candidates and ability to identify or discover additional product candidates;

●

our ability to obtain high titers for specific phage cocktails necessary for preclinical and clinical testing;

●

the availability of specialty raw materials and global supply chain challenges;

●

the ability of our product candidates to demonstrate requisite, safety and efficacy for drug products, or safety, purity and potency for biologics without causing adverse effects;

●

the success of expected future advanced clinical trials of our product candidates;

●

our ability to obtain required regulatory approvals;

●

our ability to enroll patients in clinical trials and achieve anticipated development milestones when expected;

●

delays in developing manufacturing processes for our product candidates;

●

the continued impact of COVID-19, general economic conditions, our current low stock price and other factors on our operations, the continuity of our business, including our preclinical and clinical trials, and our ability to raise additional capital;

●

competition from similar technologies, products that are more effective, safer or more affordable than our product candidates or products that obtain marketing approval before our product candidates;

●

the impact of unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives on our ability to sell product candidates or therapies profitably;

●

protection of our intellectual property rights and compliance with the terms and conditions of current and future licenses with third parties;

●

infringement on the intellectual property rights of third parties and claims for remuneration or royalties for assigned service invention rights;

●

our ability to acquire, in-license or use proprietary rights held by third parties necessary to our product candidates or future development candidates;

●

ethical, legal and social concerns about synthetic biology and genetic engineering that may adversely affect market acceptance of our product candidates;

●

reliance on third-party collaborators;

●

our ability to attract and retain key employees or to enforce the terms of noncompetition agreements with employees;

●

the failure to comply with applicable laws and regulations other than drug manufacturing compliance;

●

potential security breaches, including cybersecurity incidents;

●

~~receipt of the second and/or third tranches under the Term Loan Facility, as such term is defined below, or the second tranche under our agreement with the Cystic Fibrosis Foundation;~~

●

~~political, economic and military instability in the State of Israel;~~ and

●

other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, or, the ~~2021~~2022 Annual Report.

For a detailed discussion of these and other risks, uncertainties and factors, see Part I, Item 1A “Risk Factors” of our ~~2021~~2022 Annual ~~Report and in Part II, Item 1A of this Quarterly~~ Report. All forward-looking statements contained in this Quarterly Report speak only as of the date hereof. Except as required by law, we are under no duty to (and expressly disclaim any such obligation to) update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report. Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, and should be viewed only as historical data.

iii

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

INDEX TO FINANCIAL STATEMENTS

		Page

Condensed Consolidated Balance Sheets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 (unaudited)		~~F-1–F-2~~F-1-F-2

Condensed Consolidated Statements of Operations for the ~~Nine and~~ Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)		F-3

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the ~~Nine~~periods ended March 31, 2023 and ~~Three Months Ended September 30,~~March 31, 2022 ~~and 2021~~ (unaudited)		~~F-4–F-5~~F-4-F-5

Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)		F-6

Notes to Condensed Consolidated Financial Statements (unaudited)		~~F-7–F-17~~F-7-F-16

BIOMX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(USD in thousands, except share and per share data)

(unaudited)

		As of					As of
	Note	September 30, 2022		December 31, 2021		Note	March 31, 2023		December 31, 2022
ASSETS

Current assets

Cash and cash equivalents			37,067		62,099			29,346		31,332
Restricted cash			960		996			956		962
Short-term deposits			3,500		-			-		2,000
Other current assets			1,003		3,543	4		2,632		2,587
Total current assets			42,530		66,638			32,934		36,881

Non-current assets
Other assets								129		-
Operating lease right-of-use assets								3,767		3,860
Property and equipment, net			5,034		5,694			4,577		4,790
Intangible assets, net			382		1,519
Operating lease right-of-use assets			3,955		4,139
Total non-current assets			9,371		11,352			8,473		8,650
								41,407		45,531
			51,901		77,990

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-1

BIOMX INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(USD in thousands, except share and per share data)

(unaudited)

										As of
			As of						Note	March 31, 2023			December 31, 2022
	Note		September 30, 2022			December 31, 2021
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Trade accounts payable				1,781			2,795				1,359			820
Current portion of lease liabilities											669			687
Other accounts payable				2,023			5,453		5		2,956			2,150
Contract liability				-			1,976
Current portion of operating lease liabilities				687			819
Current portion of long-term debt		4		2,989			-		7		5,216			4,282
Total current liabilities				7,480			11,043				10,200			7,939

Non-current liabilities
Contract liability				1,976			-		8		1,976			1,976
Long-term debt, net of current portion		4		11,799			14,410		7		9,306			10,591
Operating lease liabilities, net of current portion				3,882			4,787				3,587			3,798
Other liabilities				206			215				192			188
Total non-current liabilities				17,863			19,412				15,061			16,553

Commitments and Contingencies		3							6

Stockholders’ equity		5							8

Preferred Stock, $0.0001 par value; Authorized - 1,000,000 shares as of September 30, 2022 and December 31, 2021. No shares issued and outstanding as of September 30, 2022 and December 31, 2021.				-			-
Common Stock, $0.0001 par value; Authorized - 120,000,000 shares as of September 30, 2022 and 60,000,000 shares as of December 31, 2021. Issued – 29,982,282 shares as of September 30, 2022 and 29,753,238 shares as of December 31, 2021. Outstanding – 29,976,582 shares as of September 30, 2022 and 29,747,538 shares as of December 31, 2021.				2			2
Preferred Stock, $0.0001 par value; Authorized - 1,000,000 shares as of March 31, 2023 and December 31, 2022. No shares issued and outstanding as of March 31, 2023 and December 31, 2022.											-			-
Common Stock, $0.0001 par value; Authorized - 120,000,000 shares as of March 31, 2023 and December 31, 2022. Issued –33,181,773 shares as of March 31, 2023 and 29,982,282 shares as of December 31, 2022. Outstanding –33,176,073 shares as of March 31, 2023 and 29,976,582 shares as of December 31, 2022.											2			2

Additional paid in capital				157,471			156,017				159,306			157,838
Accumulated deficit				(130,915	)		(108,484	)			(143,162	)		(136,801	)
Total stockholders’ equity				26,558			47,535				16,146			21,039
				51,901			77,990				41,407			45,531

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

BIOMX INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(USD in thousands, except share and per share data)

(unaudited)

		Three Months Ended September 30,					Nine Months Ended September 30,							Three Months Ended March 31,
	Note	2022			2021		2022			2021			Note	2023			2022

Research and development (“R&D”) expenses, net			3,536			6,608		13,049			16,102				4,564			4,929
Amortization of intangible assets			380			380		1,139			1,139				-			380
General and administrative expenses			2,633			2,845		7,471			8,436				1,644			2,477

Operating loss			6,549			9,833		21,659			25,677				6,208			7,786

Other income			(52	)		-		(52	)		-				(91	)		-
Interest expenses			555			172		1,504			172				565			461
Financial expenses (income), net			(280	)		16		(706	)		(96	)
Finance income, net															(327	)		(87	)

Loss before tax			6,772			10,021		22,405			25,753				6,355			8,160

Tax expenses			8			10		26			16				6			9

Net loss			6,780			10,031		22,431			25,769				6,361			8,169

Basic and diluted loss per share of Common Stock	6		0.23			0.37		0.75			1.03		9		0.20			0.27

Weighted average number of shares of Common Stock outstanding, basic and diluted			29,907,812			27,077,903		29,812,542			25,120,037				32,125,227			29,754,240

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

BIOMX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(USD in thousands, except share and per share data)

(unaudited)

Common Stock Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Capital Deficit Equity

Balance as of January 1, 2022 29,747,538 2 156,017 (108,484 ) 47,535

Issuance of Common Stock under Open Market Sales Agreement, net of $1 issuance costs** 27,171 * 37 - 37
Stock-based compensation expenses - - 615 - 615
Net loss - - - (8,169 ) (8,169 )

Balance as of March 31, 2022 29,774,709 2 156,669 (116,653 ) 40,018

Stock-based compensation expenses - - 184 - 184
Proceeds on account of shares 19 19
Net loss - - - (7,482 ) (7,482 )

Balance as of June 30, 2022 29,774,709 2 156,872 (124,135 ) 32,739

Stock-based compensation expenses - - 363 - 363
Issuance of Common Stock under Open Market Sales Agreement net of $7 issuance costs** 201,873 * 236 236
Net loss (6,780 ) (6,780 )

Balance as of September 30, 2022 29,976,582 2 157,471 (130,915 ) 26,558

	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity

Balance as of January 1, 2023		29,976,582		2		157,838		(136,801	)		21,039

Issuance of Common Stock and warrants under Private Investment in Public Equity (“PIPE”), net of $176 issuance costs**		3,199,491		*		1,293		-			1,293
Stock-based compensation expenses		-		-		175		-			175
Net loss		-		-		-		(6,361	)		(6,361	)

Balance as of March 31, 2023		33,176,073		2		159,306		(143,162	)		16,146

(*)

Less than $1.

(**)

See Note ~~5A.~~8A.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

BIOMX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(USD in thousands, except share and per share data)

(unaudited)

Common Stock Additional
Paid-in Accumulated Total
Stockholders’
Shares Amount Capital Deficit Equity

Balance as of January 1, 2021 23,264,637 2 129,725 (72,258 ) 57,469

Exercise of stock options 12,646 * 23 - 23
Exercise of warrant 362,383 * - -
Issuance of Common Stock under Open Market Sales Agreement, net of $134 issuance costs 601,674 * 4,334 - 4,334
Stock-based compensation expenses - - 530 - 530
Net loss - - - (8,402 ) (8,402 )

Balance as of March 31, 2021 24,241,340 2 134,612 (80,660 ) 53,954
Exercise of stock options 55,246 * 78 - 78
Issuance of Common Stock under Open Market Sales Agreement, net of $24 issuance costs 132,490 * 801 - 801
Stock-based compensation expenses - - 1,095 - 1,095
Net loss - - - (7,336 ) (7,336 )

Balance as of June 30, 2021 24,429,076 2 136,586 (87,996 ) 48,592

Exercise of stock options 11,653 * 20 20
Issuance of Common Stock under Open Market Sales Agreement, net of $2 issuance costs 9,800 * 53 53
Issuance of Common Stock under securities purchase agreement (“SPA”), net of $1,235 issuance costs 3,750,000 * 13,765 13,765
Stock-based compensation expenses - - 1,027 1,027
Net loss (10,031 ) (10,031 )

Balance as of September 30, 2021 28,200,529 2 151,451 (98,027 ) 53,426

	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity

Balance as of January 1, 2022		29,747,538		2		156,017		(108,484	)		47,535

Issuance of Common Stock under Open Market Sales Agreement, net of $1 issuance costs**		27,171		*		37		-			37
Stock-based compensation expenses		-		*		615		-			615
Net loss		-		*		-		(8,169	)		(8,169	)

Balance as of March 31, 2022		29,774,709		2		156,669		(116,653	)		40,018

(*)	Less than $1.

(**)

See Note 8A.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-5

BIOMX INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD in thousands, except share and per share data)

(unaudited)

	For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	2022			2021			2023			2022
CASH FLOWS – OPERATING ACTIVITIES
Net loss		(22,431	)		(25,769	)		(6,361	)		(8,169	)

Adjustments required to reconcile cash flows used in operating activities:
Depreciation and amortization		1,896			1,746			223			632
Stock-based compensation		1,162			2,652			175			615
Amortization of debt issuance costs		378			-			68			125
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(139	)		2
Finance expense (income), net								(123	)		4
Changes in other liabilities		(9	)		(281	)		4			-
Capital loss, net		6			24

Changes in operating assets and liabilities:
Other current assets		2,540			2,109
Other current and non-current assets								(174	)		1,183
Trade accounts payable		(1,044	)		(549	)		363			(1,400	)
Other accounts payable		(3,430	)		1,760			806			(208	)
Net change in operating leases		(853	)		(177	)		(26	)		(145	)
Net cash used in operating activities		(21,924	)		(18,483	)		(5,045	)		(7,363	)

CASH FLOWS – INVESTING ACTIVITIES
Investment in short-term deposits		(11,500	)		-			-			(10,000	)
Proceeds from short-term deposits		8,000			19,851			2,000			-
Purchases of property and equipment		(80	)		(3,579	)		(10	)		(20	)
Proceeds from sale of property and equipment		5			4
Net cash provided (used in) by investing activities		(3,575	)		16,276
Net cash provided by (used in) investing activities								1,990			(10,020	)

CASH FLOWS – FINANCING ACTIVITIES
Issuance of Common Stock under Open Market Sales Agreement, net of issuance costs		273			5,188			-			37
Issuance of Common Stock under SPA, net of issuance costs		-			13,766
Proceeds from long-term debt, net of issuance costs		-			14,225
Proceeds on account of shares		19			-
Exercise of stock options		-			121
Issuance of Common Stock and warrants under PIPE								1,469			-
Repayment of long-term debt								(419	)		-
Net cash provided by financing activities		292			33,300			1,050			37

Increase (decrease) in cash and cash equivalents and restricted cash		(25,207	)		31,093
Decrease in cash and cash equivalents and restricted cash								(2,005	)		(17,346	)

Effect of exchange rate changes on cash and cash equivalents and restricted cash		139			(2	)		13			(4	)

Cash and cash equivalents and restricted cash at the beginning of the period		63,095			37,240			32,294			63,095

Cash and cash equivalents and restricted cash at the end of the period		38,027			68,331			30,302			45,745

Reconciliation of amounts on consolidated balance sheets
Cash and cash equivalents		37,067			67,346			29,346			44,755
Restricted cash		960			985			956			990
Total cash and cash equivalents and restricted cash		38,027			68,331			30,302			45,745

Supplemental disclosures of cash flow information
Cash paid for interest		1,099			60			495			336
Taxes paid		26			16			6			9
Property and equipment purchases included in accounts payable and accrued expenses		30			691
Recognition of operating lease right-of-use and liabilities		-			168
Issuance costs from PIPE included in trade accounts payable								176

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-6

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 1 – GENERAL

General information

BiomX Inc., (individually, and together with its subsidiaries, BiomX ~~Ltd.~~Ltd, (“BiomX Israel”) and RondinX Ltd., the “Company” or “BiomX”) was incorporated as a blank check company on November 1, 2017, under the laws of the state of Delaware, for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

On ~~July 16,~~October 29, 2019, the Company entered into a merger agreement with BiomX Ltd. (“BiomX Israel”), a company incorporated under the laws of Israel, CHAC Merger Sub Ltd. (“Merger Sub”) and Shareholder Representative Services LLC, as amended on October 11, 2019, pursuant to which, among other things, BiomX Israel merged ~~with Merger Sub,~~ with BiomX Israel, ~~being~~who survived the ~~surviving entity in accordance with the Israeli Companies Law, 5759-1999,~~merger as a wholly owned ~~direct~~ subsidiary of BiomX Inc.

~~On October 28, 2019, the~~ The Company ~~consummated the acquisition of 100% of the~~acquired all outstanding shares of BiomX ~~Israel (the “Recapitalization Transaction”). Pursuant to the aforementioned merger agreement, in~~Israel. In exchange, ~~for all of the outstanding shares of BiomX Israel, the Company issued to the~~ shareholders of BiomX Israel ~~a total of~~received 15,069,058 shares of the Company’s Common Stock, representing ~~approximately~~ 65% of the total shares issued and outstanding after ~~giving effect to~~ the acquisition (“Recapitalization ~~Transaction. As a result of the Recapitalization Transaction,~~Transaction”). BiomX Israel ~~became a wholly owned subsidiary of~~was deemed the ~~Company. As the shareholders of BiomX Israel received~~“accounting acquirer” due to the largest ownership interest in the ~~Company, BiomX Israel was determined to be the “accounting acquirer” in the Recapitalization Transaction.~~

Company. The Company’s shares of Common Stock, units, and warrants are traded on the NYSE American under the symbols PHGE, PHGE.U, and PHGE.WS, respectively.

On February 6, 2020, the Company’s Common Stock also began trading on the Tel-Aviv Stock Exchange. On July 6, 2022, the Company announced a voluntary delisting of its shares of Common Stock from the Tel-Aviv Stock Exchange which became effective on October 6, 2022.

BiomX is developing both natural and engineered phage cocktails designed to target and destroy harmful bacteria in chronic ~~diseases.~~diseases, focusing its efforts at this point on cystic fibrosis and to a lesser degree on atopic dermatitis. BiomX discovers and validates proprietary bacterial targets and customizes phage compositions against these targets. The Company’s headquarters are located in Ness Ziona, Israel.

To date, the Company has not generated revenue from its operations. Based on the Company’s current cash and commitments, management believes that the Company’s current cash and cash equivalents are sufficient to fund its operations for more than 12 months from the issuance date ~~of issuance~~ of these condensed consolidated financial statements and sufficient to fund its operations necessary to continue development activities.

Consistent with its continuing research and development activities, the Company expects to continue to incur additional losses for the foreseeable future. The Company plans to continue to fund its current operations, as well as other development activities relating to additional product candidates, through future issuances of debt and/or equity securities, loans and possibly additional grants from the Israel Innovation Authority (“IIA”) (See note 6 and 10) and other government institutions. The Company’s ability to raise additional capital in the equity and debt markets is dependent on a number of factors including, but not limited to, the market demand for the Company’s Common Stock, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are favorable to it. If the Company is unable to raise capital when needed or on attractive terms, it may be forced to delay or reduce its research and development programs. If there are further increases in operating costs for facilities expansion, research and development and clinical activity, the Company will need to use mitigating actions such as to seek additional financing or postpone expenses that are not based on firm commitments. On May 24, 2022, the Company announced a corporate restructuring (the “Corporate Restructuring”), intended to extend the Company’s capital resources, while prioritizing the Company’s ongoing cystic fibrosis program and delaying the Company’s atopic dermatitis program. See ~~note 7 for further information.~~notes 8A and 10D regarding the PIPE.

F-7

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Unaudited Condensed Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for condensed financial information. They do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair statement have been included (consisting only of normal recurring adjustments except as otherwise discussed).

The financial information contained in this report should be read in conjunction with the annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, that the Company filed with the U.S. Securities and Exchange Committee (the “SEC”) on March ~~30, 2022.~~29, 2023. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, ~~2021, but not all disclosures required by GAAP are included.~~2022.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the financial statements and the amounts of expenses during the reported years. Actual results could differ from those estimates.

The full extent to which the COVID-19 pandemic may directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international markets. In November 2022, the Company updated its guidance on the timing of certain clinical milestones resulting from challenges it continues to face in clinical trial enrollment resulting from the COVID-19 pandemic. The Company examined the impact of COVID-19 on its financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.

Recent Accounting Standards

In May 2021, the Financial Accountings Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). The guidance became effective for the Company on January 1, 2022. The CompanyRecently adopted ~~the guidance on January 1, 2022, and has concluded the adoption did not have a material impact on its unaudited condensed consolidated financial statements.~~accounting pronouncements

In June 2016, the ~~FASB~~Financial Accounting Standards Board issued ~~ASU No.~~Accounting Standards Update 2016-13, “Financial ~~Instruments –~~Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” ~~to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU No. 2016-13~~This guidance replaces the current incurred loss impairment methodology with a methodology that reflects expected credit ~~losses. This~~losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance iswill be effective for smaller reporting companies (as defined by the ~~Company~~rules under the Securities Exchange Act of 1934, as amended) for the fiscal year beginning on January 1, 2023, ~~with early adoption permitted.~~including interim periods within that year. The Company ~~does not expect that~~adopted the guidance on January 1, 2023, and has concluded the adoption ~~of this standard will~~did not have a ~~significant~~material impact on its ~~condensed~~ consolidated financial ~~statements and related disclosures.~~

~~BIOMX INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(USD and NIS in thousands, except share and per share data)~~

~~(unaudited)~~statements.

NOTE 23 – ~~SIGNIFICANT ACCOUNTING POLICIES (Cont.)~~FAIR VALUE OF FINANCIAL INSTRUMENTS

~~Recent Accounting Standards (Cont.)~~

In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified retrospective approach which resulted in no effect.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832),” which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021. The Company expects that this guidance will not have a significant impact on the Company’s consolidated financial statements.

~~Fair Value of Financial Instruments~~

The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data.

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

There were no changes in the fair value hierarchy levelling during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and year ended December 31, ~~2021.~~2022.

F-8

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 23 – ~~SIGNIFICANT ACCOUNTING POLICIES~~FAIR VALUE OF FINANCIAL INSTRUMENTS (Cont.)

~~Fair Value of Financial Instruments (Cont.)~~

The following table summarizes the fair value of ~~the Company’s~~our financial assets and liabilities that were accounted for at fair value on a recurring basis, by level within the fair value hierarchy:

	September 30, 2022								March 31, 2023
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds		30,119		-		-		30,119		23,897		-		-		23,897
		30,119		-		-		30,119		23,897		-		-		23,897
Liabilities:
Contingent consideration		-		-		166		166						152		152
Foreign exchange contracts payable		-		67		-		67		-		95		-		95
		-		67		166		233		-		95		152		247

	December 31, 2021								December 31, 2022
	Level 1		Level 2		Level 3		Fair Value		Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds		30,007		-		-		30,007		27,824		-		-		27,824
Foreign exchange contracts receivable		-		62		-		62
		30,007		62		-		30,069		27,824				-		27,824
Liabilities:
Contingent consideration		-		-		175		175		-		-		148		148
Foreign exchange contracts payable												55				55
		-		-		175		175		-		55		148		203

Financial instruments with carrying values approximating fair value include cash and cash equivalents, restricted cash, short-term deposits, other current assets, trade accounts payable and other accounts payable, due to their short-term nature.

The Company determined the fair value of the liabilities for the contingent consideration based on a probability discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the attainment of future clinical, developmental, regulatory, commercial and strategic milestones relating to product candidates for treatment of primary sclerosing cholangitis. The discount rate applied ranged from ~~1.26%~~3.60% to ~~4.06%~~3.99%. The contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in consolidated statements of operations. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liability. The change in contingent consideration for the three months ended March 31, 2023 resulted from revaluation‏. For the ~~nine~~three months ended ~~September 30,~~March 31, 2022, the Company ~~recorded an income of $9 as a result of a revaluation of~~did not record any expenses related to the contingent consideration liability.

The Company uses foreign exchange contracts (mainly option and forward contracts) to hedge cash flows from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, the Company recognizes gains or losses that offset the revaluation of the cash flows also recorded under financial expenses (income), net in the condensed consolidated statements of operations. As of ~~September 30,~~March 31, 2023, the Company had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $4,647 with a fair value liability of $95. As of December 31, 2022, the Company had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately ~~$2,540~~$4,547 with a fair value liability of ~~$67. As of December 31, 2021, the Company had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $4,180 with a fair value asset of $62.~~$55.

F-9

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 4 – OTHER CURRENT ASSETS

	March 31, 2023		December 31, 2022

Government institutions		47		90
Prepaid insurance		1,545		1,410
Other prepaid expenses		171		84
Grants receivables		853		567
Other		16		436
Other current assets		2,632		2,587

NOTE 5 – OTHER ACCOUNTS PAYABLE

	March 31, 2023		December 31, 2022

Employees and related institutions		789		800
Accrued expenses		1,803		887
Government institutions		156		166
Deferred income		114		242
Other		94		55
		2,956		2,150

NOTE 36 – COMMITMENTS AND CONTINGENCIES

	A.	In March 2021, the IIA approved two new applications in relation to the Company’s cystic fibrosis product candidate for an aggregate budget of NIS 10,879 (approximately $3,286) and for the Company’s product candidate for Inflammatory Bowel Disease (“IBD”) and Primary Sclerosing Cholangitis for an aggregate revised budget of NIS ~~8,565~~6,753 (approximately ~~$2,588)~~$2,118). The IIA committed to fund 30% of the approved budgets. The programs are for the period beginning January 2021 through December 2021. Through ~~September 30, 2022,~~March 31, 2023, the Company received NIS 4,284 (approximately $1,347) from the IIA with respect to these programs.

		See note 10B regarding funds received with respect to these programs after the balance sheet date. In August 2021, the IIA approved an application that supports upgrading the Company’s manufacturing capabilities for an aggregate budget of NIS 5,737 (approximately $1,778). The IIA committed to fund 50% of the approved budget. The program is for the period beginning July 2021 through June 2022. The program does not bear royalties. Through ~~September 30, 2022,~~March 31, 2023, the Company received NIS 1,912 (approximately $577) from the IIA with respect to this program.

		In March 2022, the IIA approved an application for a total budget of NIS 13,004 (approximately $4,094) in relation to the Company’s cystic fibrosis product candidate. The IIA committed to fund 30% of the approved budget. The program is for the period beginning January 2022 through December 2022. Through ~~September 30, 2022,~~March 31, 2023, the Company received NIS 1,365 (approximately $395) from the IIA with respect to this program. In March 2023, the IIA approved an application for a total budget of NIS 11,283 (approximately $3,164) in relation to the Company’s cystic fibrosis product candidate. The IIA committed to fund 30% of the approved budget. The program is for the period beginning January 2023 through December 2023. See note 10C regarding funds received with respect to these programs after the balance sheet date.

F-10

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 6 – COMMITMENTS AND CONTINGENCIES (Cont.)


		According to the agreement with the IIA, excluding the August 2021 program, BiomX Israel will pay royalties of 3% to 3.5% of future sales up to an amount equal to the accumulated grant received including annual interest of LIBOR linked to the dollar. BiomX Israel may be required to pay additional royalties upon the occurrence of certain events as determined by the IIA, that are within the control of BiomX Israel. No such events have occurred or were probable of occurrence as of the balance sheet date with respect to these royalties. Repayment of the grant is contingent upon the successful completion of the BiomX Israel’s R&D programs and generating sales. BiomX Israel has no obligation to repay these grants if the R&D program fails, is unsuccessful or aborted or if no sales are generated. The Company had not yet generated sales as of ~~September 30, 2022;~~March 31, 2023; therefore, no liability was recorded in these condensed consolidated financial statements. ~~Received~~ IIA grants are recorded as a reduction of R&D expenses, net.

		Through ~~September 30, 2022,~~March 31, 2023, total grants approved from the IIA aggregated to approximately ~~$8,403~~$9,353 (NIS ~~28,683)~~32,068). Through ~~September 30, 2022,~~March 31, 2023, the Company had received an aggregate amount of ~~$6,957~~$6,960 (NIS ~~23,634)~~23,645) in the form of grants from the IIA. ~~Receipt of the remaining grants from approved programs depends on the actual utilization of approved budgets.~~ Total grants subject to royalties’ payments aggregated to approximately ~~$6,380.~~$6,370. As of ~~September 30, 2022,~~March 31, 2023, the Company had a contingent obligation to the IIA in the amount of approximately ~~$6,557~~$6,640 including annual interest of LIBOR linked to the dollar.

		The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021. Even though the IIA has not declared the alternative benchmark rate to replace the LIBOR, the Company does not expect it will have a significant impact on its financial statements.

	B.	On June 23, 2022 (“Effective Date”), BiomX Israel entered into a new research collaboration agreement with Boehringer Ingelheim International GmbH (“BI”) for a collaboration to identify biomarkers for ~~inflammatory bowel disease (“IBD”).~~IBD. Under the agreement, BiomX Israel is eligible to receive fees totaling $1,411 to cover costs to be incurred by BiomX Israel in conducting the research plan under the collaboration. The fees will be paid in instalments of $500 within 30 days of the Effective Date and three additional installments of $500, $200 and $211 upon completion of certain activities under the research plan. Unless terminated earlier, this agreement will remain in effect until (a) a period of eighteen (18) months ~~thereafter~~after the Effective Date or (b) completion of the project plan and submission and approval of the final report, whichever occurs sooner, unless otherwise extended. The consideration is recorded as a reduction of R&D expenses, net in the condensed consolidated statements of operations according to the input model method on a cost-to-cost basis. The remainder of the consideration is recorded as other accounts payable in the condensed consolidated balance sheets. During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company ~~received consideration of $500 and~~ recorded ~~$230~~$125 in the condensed consolidated statements of ~~operations.~~

	C.	~~On May 24, 2022,~~operations as a reduction of R&D expenses. Through March 31, 2023, the Company ~~notified~~received total funds of $500 from BI with respect to this agreement. See note 10A regarding funds received after the ~~Massachusetts Institute of Technology of the termination of the Patent License Agreement between the parties which became effective on August 22, 2022.~~

	D.	In October 2019, BiomX Israel entered into a loan agreement in the amount of $19 with a stockholder of the Company. The loan is secured by shares of Common Stock of the Company. The granting of the loan and the restrictions imposed on the related shares of Common Stock until repayment of the loan and transfer of the shares of Common Stock back to the stockholder were accounted as an acquisition of treasury stock by the Company at an amount equal to the loan. During the nine months ended September 30, 2022, the loan was repaid by the stockholder to the Company and was accounted as proceeds on account of shares in the statements of changes in stockholders’ equity as the shares of Common Stock were not transferred to the stockholder as of September 30, 2022.balance sheet date.

F-11

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 47 – LONG-TERM DEBT

On August 16, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), with respect to a venture debt facility. Under the Loan Agreement, Hercules provided the Company with access to a term loan with an aggregate principal amount of up to $30,000 (the “Term Loan Facility”), available in three tranches, subject to certain terms and conditions. The first tranche of $15,000 was advanced to the Company on the date the Loan Agreement was executed. Upon the occurrence of specified milestones and continuing through December 31, 2022, a loan in the aggregate principal amount of up to $10,000 or (“the second ~~tranche,~~tranche”), would have become available, and upon the occurrence of specified milestones and continuing through September 30, 2023, a loan in the aggregate principal amount of up to $5,000 or (“the third ~~tranche,~~tranche”), may become available. The milestones for the second tranche and for the extension of the period of interest only payments to September 1, 2023, were not reached and have expired. The milestones for the third tranche have not yet been reached as of March 31, 2023 and the Company isdoes not expect to reach them. The Company was required to make interest only payments through March 1, 2023, ~~or extended to September 1, 2023 upon satisfaction of certain milestones,~~ and ~~is required~~started to then repay the principal balance and interest in equal monthly installments through September 1, 2025.

~~As of September 30, 2022, the milestones for the remaining tranches and for the extension of the period of interest only payments to September 1, 2023, have not yet been reached.~~

The Company may prepay advances under the Loan Agreement, in whole or in part, at any time subject to a prepayment charge equal to: (a) 3.0 % of amounts prepaid, if such prepayment occurs during the first 12 months following the Closing Date; (b) 2.0% after 12 months but prior to 24 months; (c) 1.0% after 24 months but prior to 36 months, and (d) no charge after 36 months. Upon prepayment or repayment of all or any of the term loans under the Term Loan Facility, the Company is required to pay an end of term charge (“End of Term Charge”) equal to 6.55% of the total aggregate amount of the term loans being prepaid or repaid.

Interest on the term loan accrues at a per annum rate equal to the greater of (i) the Prime Rate as reported in The Wall Street Journal plus 5.70% and (ii) 8.95%. On ~~September 30, 2022,~~March 31, 2023, the Prime Rate was ~~6.25%~~8.00%. Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization of capitalized loan issuance costs. Debt issuance costs are recorded on the consolidated balance sheet as a reduction of liabilities. Amounts allocated to the debt, net of issuance cost, are subsequently recognized at amortized cost using the effective interest method. On ~~September 30, 2022,~~March 31, 2023, the effective interest rate was ~~15.86%~~16.79%.

As of ~~September 30, 2022,~~March 31, 2023, the carrying value of the term loan consists of ~~$15,000~~$14,581 principal outstanding less the ~~unamortized~~ debt discount and issuance costs of approximately ~~$212.~~$59. The End of Term Charge of $983 is recognized over the life of the term loan as interest expense using the effective interest method. The debt issuance costs have been recorded as a debt discount which ~~are~~is being accreted to interest expense through the maturity date of the term loan.

Interest expense relating to the term loan, which is included in interest expense in the condensed ~~consolidated~~ statements of operations was ~~$555~~$565 and ~~$1,504~~$461 for the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023 and 2022, respectively.

Under the terms of the Loan Agreement, the Company granted first priority liens and security interests in substantially all of the Company’s intellectual property as collateral for the obligations thereunder. The Company also granted Hercules the right, at their discretion, to participate in any closing of any single subsequent broadly marketed financing as defined up to a maximum aggregate amount of $2,000 under the terms as afforded to other investors in such financing. The Loan Agreement also contains representations and warranties by the Company and Hercules, indemnification provisions in favor of Hercules and customary affirmative and negative covenants, including a liquidity covenant beginning October 1, 2022, requiring the Company to maintain a minimum aggregate compensating cash balance of $5,000, and events of default, including a material adverse change in the Company’s business, payment defaults, breaches of covenants following any applicable cure period, and a material impairment in the perfection or priority of Hercules’ security interest in the collateral. In the event of default by the Company under the Loan Agreement, the Company may be required to repay all amounts then outstanding under the Loan Agreement.

Future principal payments for the long-term debt are as follows:

	September 30, 2022			March 31, 2023
2023	$	4,333		$	3,842
2024		5,797			5,785
2025		4,870			4,954
Total principal payments		15,000			14,581
Unamortized discount and debt issuance costs		(212	)		(59	)
Total future principal payments	$	14,788		$	14,522
Current portion of long-term debt		(2,989	)		(5,216	)
Long-term debt, net	$	11,799		$	9,306

F-12

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 58 – ~~STOCKHOLDERS’~~STOCKHOLDERS EQUITY

Share Capital:

~~Authorized shares of common stock~~Private Investment in Public Equity:

On ~~August 24, 2022,~~February 22, 2023, the ~~Company’s stockholders approved increasing~~Company entered into a Securities Purchase Agreement to issue and sell an aggregate of 15,997,448 shares of its Common Stock and 14,610,714 pre-funded warrants (the “Pre-Funded Warrants”, and collectively, the ~~number~~“Securities”) at a price of ~~authorized~~$0.245 per share and $0.244 per Pre-Funded Warrant, through a private investment in public equity financing (“PIPE”). The gross proceeds from this offering are approximately $7,484, before deducting issuance costs. The financing closed in two parts. The first closing, which covers 3,199,491 shares of Common Stock ~~from 60,000,000 shares, par value $0.0001~~and 2,776,428 Pre-Funded Warrants for gross proceeds of $1,469, occurred on February 27, 2023. Such Pre-Funded Warrants became exercisable on February 27, 2023, at an exercise price of $0.001 per share of Common Stock and have no expiration date. At the first closing the Company raised net proceeds of $1,293, after deducting issuance costs of $176. The second closing for the remaining Securities, which was contingent upon approval of the issuance of the additional Securities under the Securities Purchase Agreement by the Company’s stockholders in accordance with NYSE American rules, occurred on May 4, 2023. See note 10D.

The exercise of the outstanding Pre-Funded Warrants is subject to ~~120,000,000~~a beneficial ownership limitation between 9.90%-9.99%, The exercise price and number of shares ~~par value $0.0001 per share.~~of Common Stock issuable upon the exercise of the Pre-Funded Warrants are subject to adjustment in the event of any stock dividends, stock splits, reverse stock split and reclassification, as described in the agreements. Pursuant to the sole discretion of the holder, the Pre-Funded Warrants may be exercisable on a “cashless” basis. The Pre-Funded Warrants were classified as a component of stockholders’ equity.

At-the-market Sales Agreement:

In December 2020, pursuant to a registration statement on Form S-3 declared effective by the Securities and Exchange Commission on December 11, 2020, the Company entered into an Open Market Sales Agreement (“ATM Agreement”) with Jefferies LLC. (“Jefferies”), which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares of Common Stock with an aggregate offering price of up to $50,000, with Jefferies acting as a sales agent. During the ~~nine~~three months ended ~~September 30,~~March 31, 2023, the Company did not sell any shares of Common Stock under the ATM Agreement. During the three months ended March 31, 2022, the Company sold ~~229,044~~27,171 shares of Common Stock under the ATM Agreement, at an average price of ~~$1.19~~$1.36 per share, raising aggregate net proceeds of approximately ~~$273,~~$37, after deducting an aggregate commission of ~~$8.~~$1.

Maruho Agreement:

In October 2021, the Company entered into a Stock Purchase Agreement with a subsidiary of Maruho Co. Ltd., (“Maruho”), a leading dermatology-focused pharmaceutical company in Japan, pursuant to which the Company issued to Maruho 375,000 shares of Common Stock at a price of $8.00 per share for gross proceeds of $3,000. The Company also granted Maruho a right of first offer to license its atopic dermatitis product candidate, BX005, in Japan. The right of first offer will commence following the availability of results from the Phase 1/2 ~~study.~~study initially expected in 2022. The Company applied ASC 606 by analogy to the agreements. The agreements were combined into a single unit of account for the purpose of applying ASC 606. Part of the consideration paid under the agreements, equal to the grant date fair value of the shares issued to Maruho of $1,024, was attributed to the issuance of shares and accounted for as an increase in equity. The remainder of $1,976 was attributed to a contract liability, to be recognized as other income, at a point in time, once the clinical trials related to the product candidate are completed. Following the ~~Company~~Company’s announcement on May 24, 2022, ~~as mentioned in Note 7 below~~ regarding the delaying of the Company’s atopic dermatitis program, the contract liability was classified as a non-current liability.

F-13

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 8 – STOCKHOLDERS EQUITY (Cont.)

Share Capital: (Cont.)

CFF Agreement:

In December 2021, the Company entered into a Securities Purchase Agreement with the Cystic Fibrosis Foundation (“CF Foundation”), an organization that historically played a role in supporting the development of innovative therapies for patients suffering from cystic fibrosis ~~(“CF”)~~(CF). Under the terms of the agreement, the Company will receive up to $5,000 in two tranches. In the first tranche, which closed and fully received on December 21, 2021, the CF Foundation invested $3,000 as an initial equity investment based on a share price of $2.57. Upon completion of ~~all~~ patient dosing in Part 1 of the Company’s Phase 1b/2a study of BX004, the Company ~~would have~~had the right to receive the second tranche of $2,000, also as an equity investment. In the event that the average closing price of the Common Stock for the ten trading days prior to the second tranche completion is less than $2.57, the Company ~~shall have~~had the right in its sole discretion to waive the second tranche payment and in such event the CF Foundation ~~shall~~would not have any right to receive additional shares. ~~The~~Ultimately, the CF Foundation decided to participate in the PIPE and invested an aggregate amount of $2,000 and the Company ~~concluded that~~waived the right to receive the second tranche ~~is a freestanding financial instrument. The Company also concluded that since the instrument will be predominantly settled in a variable number~~ of shares at a fixed monetary amount, the second tranche is in the scope of ASC 480 and should be accounted for at fair value with subsequent changes in fair value recognized in the statements of operations in each period. The Company further determined that due to the settlement mechanism, the fair value of the second tranche is negligible, both at inception and on September 30, 2022.$2,000 mentioned above.

~~BIOMX INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(USD and NIS in thousands, except share and per share data)~~

~~(unaudited)~~

~~NOTE 5 – STOCKHOLDERS’ EQUITY (Cont.)~~

~~Share Capital: (Cont.)~~

Preferred Stock:

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors (the “Board”).

Warrants:

As of ~~September 30, 2022,~~March 31, 2023, the Company had the following outstanding warrants to purchase Common Stock issued to stockholders:

Warrant

Issuance Date

Expiration
Date

Exercise
Price
Per Share

Number of
Shares of
Common
Stock
Underlying
Warrants

Issuance Date

Expiration Date

Exercise Price Per Share

Number of Shares of Common Stock Underlying Warrants

Private Placement Warrants

IPO (December 13, 2018)

December 13, 2023

11.50

2,900,000

IPO (December 13, 2018)

December 13, 2023

11.50

2,900,000

Public Warrants

IPO (December 13, 2018)

October 28, 2024

11.50

3,500,000

IPO (December 13, 2018)

October 28, 2024

11.50

3,500,000

2021 Registered Direct Offering Warrants

SPA (July 28, 2021)

January 28, 2027

5.00

2,812,501

SPA (July 28, 2021)

January 28, 2027

5.00

2,812,501

Pre-Funded Warrants

February 27, 2023

0.001

2,776,428

9,212,501

11,988,929

Stock-based Compensation:

On March ~~29, 2022,~~1, 2023, the Board of Directors approved the grant of ~~1,153,500~~1,543,000 options to 8949 employees, ~~three~~five senior officers ~~one consultant,~~ and ~~five~~three directors under the Company’s 2019 Equity Incentive Plan, without consideration. Options were granted at an exercise price of ~~$1.41~~$0.40 per share with a vesting period of four years. Directors and senior officers are entitled to full acceleration of their unvested options upon the occurrence of both a change in control of the Company and the end of their engagement with the Company.

On June 26, 2022, the Board of Directors approved the grant of 350,500 options to 53 employees, and one consultant under the Company’s 2019 Equity Incentive Plan, without consideration. Options were granted at an exercise price of $0.66 per share with a vesting period of four years.

On August 22, 2022, the Board of Directors approved the grant of 290,000 options to four senior officers under the Company’s 2019 Equity Incentive Plan, without consideration. Options were granted at an exercise price of $0.66 per share with a vesting period of four years. Senior officers are entitled to full acceleration of their unvested options upon the occurrence of both a change in control of the Company and the end of their engagement with the Company.

On September 30, 2022, the Board of Directors approved the grant of 20,000 options to a consultant under the Company’s 2019 Equity Incentive Plan, without consideration. Options were granted at an exercise price of $0.37 per share with a vesting period of one year.

F-14

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 58 – ~~STOCKHOLDERS’~~STOCKHOLDERS EQUITY (Cont.)

Stock-based Compensation: (Cont.)

The fair value of each option was estimated as of the date of grant or reporting period using the Black-Scholes option-pricing model, using the following assumptions:

	Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2023		2022
Underlying value of Common Stock ($)		0.37-1.41		7.02		0.40		1.41
Exercise price ($)		0.37-1.41		7.02		0.40		1.41
Expected volatility (%)		85.3-88.4		85.0		94.3		85.3
Expected terms of the option (years)		5.31-6.11		6.11		6.11		6.11
Risk-free interest rate (%)		2.50-4.05		1.17		4.21		2.50

The cost of the benefit embodied in the options granted during the ~~nine and~~ three months ended ~~September 30, 2022,~~March 31, 2023, based on their fair value as of at the grant date, is estimated to be approximately ~~$1,428 and $127, respectively.~~$487. These amounts will be recognized in statements of operations over the vesting period.

(1)

A summary of options granted to purchase the Company’s Common Stock under the Company’s share option plans is as follows:

	For the Nine Months Ended September 30, 2022							For the Three Months Ended March 31, 2023
	Number of Options			Weighted Average Exercise Price		Aggregate Intrinsic Value		Number of Options			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at the beginning of period		4,084,549			3.95		671		4,769,441		$	2.93	$	40
Granted		1,814,000			1.14				1,543,000		$	0.40
Forfeited		(868,141	)		4.08				(197,841	)	$	3.16
Exercised		-			-				-		$	-
Outstanding at the end of period		5,030,408			2.92		74		6,114,600		$	2.28	$	67
Exercisable at the end of period		2,691,163							2,971,229		$	3.08
Weighted average remaining contractual life of outstanding options – years as of September 30, 2022		7.18
Weighted average remaining contractual life of outstanding options – years as of March 31, 2023									4.95

F-15

BIOMX INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(USD and NIS in thousands, except share and per share data)

(unaudited)

NOTE 58 – ~~STOCKHOLDERS’~~STOCKHOLDERS EQUITY (Cont.)

Stock-based Compensation: (Cont.)

Warrants:

As of ~~September 30, 2022,~~March 31, 2023, the Company had the following outstanding compensation related warrants to purchase Common Stock:

Warrant

Issuance
Date

Expiration
Date

Exercise
Price
Per Share

Number of
Shares of
Common Stock
Underlying
Warrants

Private Warrants issued to scientific founders (see below)

November 27, 2017

2,974

In November 2017, BiomX Israel issued 2,974 warrants to its scientific founders. The warrants were fully vested at their grant date and will expire immediately prior to a consummation of an M&A transaction. The warrants did not expire as a result of the Recapitalization Transaction and have no exercise price.

(2)

The following table sets forth the total stock-based payment expenses resulting from options granted, included in the statements of operations:

	Nine Months Ended September 30,				Three Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
Research and development expenses, net		352		1,539		104		581		87		258
General and administrative		810		1,113		259		446		88		357
		1,162		2,652		363		1,027		175		615

NOTE 69 – BASIC AND DILUTED LOSS PER SHARE

Basic loss per share is computed on the basis of the net loss for the period divided by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share is based upon the weighted average number of shares of Common Stock and of potential shares of Common Stock outstanding when dilutive. Potential shares of Common Stock equivalents include outstanding stock options and warrants, which are included under the treasury stock method when dilutive. The calculation of diluted loss per share for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 does not include ~~5,030,408,~~6,114,600, 9,215,475 and 4,000,000 of shares underlying options, shares underlying warrants and contingent shares, respectively, because the effect would be anti-dilutive. The calculation of the loss per share includes fully vested Pre-Funded Warrants for the Company’s Common Stock at an exercise price of $0.001 per share, as the Company considers these shares to be exercised for little to no additional consideration.

NOTE 10 – SUBSEQUENT EVENTS

	A.	On April 11, 2023, the Company received funds in total of $700 from BI as part of the research collaboration agreement.

	B.	On April 18, 2023, the Company received the final payments of NIS 995 (approximately $275) from the IIA with respect to the IIA programs approved in March 2021.

	C.	On April 18, 2023, the Company received the first payments of NIS 1,185 (approximately $328) from the IIA with respect to the IIA program approved in March 2023.

	D.	On April 24, 2023 the Company’s stockholders approved the issuance of up to 24,632,245 shares of Common Stock, comprised of shares and shares underlying Pre-Funded Warrants, in accordance with the Securities Purchase Agreement dated February 22, 2023, in order to comply with the listing rules of the NYSE American, as part of the second closing of the PIPE. On May 4, 2023, subsequent to the approval of the Company’s stockholders, the Company completed the second closing of the PIPE and issued an aggregate of 24,632,243 Securities for gross proceeds of approximately $6,000.

F-16

~~BIOMX INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(USD and NIS in thousands, except share and per share data)~~

~~(unaudited)~~

~~NOTE 7 – CORPORATE RESTRUCTURING~~

On May 24, 2022, the Company announced a Corporate Restructuring, intended to extend the Company’s capital resources, while prioritizing the Company’s ongoing cystic fibrosis program and delaying the Company’s atopic dermatitis program. The Corporate Restructuring included a reduction of 36 full-time employees, two consultants and 9 part-time employees, or 42% of the Company’s employees as of such date. The Company incurred a one-time employee benefits and severance cost of approximately $214 in operating expenses in the second quarter of 2022. Non-cash stock-based compensation credits related to the forfeiture of stock options of approximately $125 and $376 are included in operating expenses in the condensed consolidated statements of operations for the three and nine months ended September 30, 2022, respectively.

~~NOTE 8 – LEASES~~

In August 2022, BiomX Israel entered into a sublease agreement for a portion of its office space in Ness Ziona, Israel. The agreement is for a period of two years beginning on August 15, 2022. The monthly lease payments under the agreement are approximately $29. The monthly lease proceeds are recorded as other income in the condensed consolidated statements of operations.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this Quarterly Report to “the Company”, “BiomX”, “we”, “us” or “our”, mean BiomX Inc. and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

General

We are a clinical stage product discovery company developing products using both natural and engineered phage technologies designed to target and ~~destroy~~kill specific harmful bacteria ~~in the treatment of~~associated with chronic ~~diseases.~~diseases, such as cystic fibrosis, or CF. Bacteriophage or phage are bacterial, species-specific, strain-limited viruses that infect, amplify and kill the target bacteria and are considered inert to mammalian cells. By ~~developing~~utilizing proprietary combinations of naturally occurring phage and by creating novel phage using synthetic biology, we develop phage-based therapies intended to address both large-market and orphan diseases.

~~Since inception in 2015,~~In our therapeutic programs, we ~~have devoted substantially all our resources~~focus on using phage therapy to organizing and staffing the company, raising capital, acquiring rights to or discovering product candidates, developing our technology platforms, securing related intellectual property rights, and conducting discovery, research and development activities for our product candidates. We do not have any products approved for sale, our productstarget specific strains of pathogenic bacteria that are ~~still in the preclinical and clinical development stages, and we have not generated any revenue from product sales. As we move our product candidates from preclinical to clinical stage and continue~~associated with ~~clinical trials, we expect our expenses to increase.~~

diseases. Our phage-based product candidates are developed utilizing our proprietary research and development platform named BOLT. The BOLT platform is unique, employing cutting edge methodologies and capabilities across disciplines including computational biology, microbiology, synthetic engineering of phage and their production bacterial hosts, bioanalytical assay development, manufacturing and formulation, to allow agile and efficient development of natural or engineered phage combinations, or cocktails.

~~BOLT is designed to allow rapid phage cocktails. The BOLT cocktail targets a broad patient population and may be comprised of naturally-occurring or synthetically engineered phage.~~ The cocktail contains phage with complementary features and is ~~further~~ optimized for multiple characteristics such as broad target host range, ability to prevent resistance, biofilm penetration, stability and ease of manufacturing. ~~Development of the optimized phage cocktail is anticipated to require 1-2 years.~~

~~On November 15, 2021, we announced that we plan~~Our goal is to ~~focus~~develop multiple products based on ~~Cystic Fibrosis, or CF,~~the ability of phage to precisely target harmful bacteria and ~~Atopic Dermatitis, or AD, programs in 2022~~on our ability to screen, identify and combine different phage, both naturally occurring and created using synthetic engineering, to temporarily pause the development efforts in Inflammatory Bowel Disease, or IBD, and Colorectal Cancer, or CRC, for approximately one year, as neither program was expected to yield proof-of-concept data in patients over the next twelve months. As of today, we cannot provide any guidance on resuming activities indevelop these ~~programs.~~treatments.

On May 24, 2022, we announced a corporate restructuring, or the Corporate Restructuring, whereby we plan to prioritize the CF program and delay the Company’s atopic dermatitis, or AD program. The Corporate Restructuring iswas intended to extend the Company’s capital resources ~~until at least the middle of 2024~~ and included the laying off of approximately 42% of our employees.

Clinical and Pre-Clinical Developments

Ongoing Programs

Cystic Fibrosis

~~On March 31, 2021, we announced the selection of the phage cocktail for~~ BX004 is our therapeutic phage product candidate under development for chronic ~~respiratory~~pulmonary infections caused by Pseudomonas aeruginosa, or P. aeruginosa, a main contributor to morbidity and mortality in patients with CF. ~~In September 2021, BX004 was cleared by the FDA~~Enhanced resistance to ~~initiate the Phase 1b/2a trial~~antibiotics develops, particularly in CF patients, ~~with chronic respiratory infections caused by~~ due to extensive drug use consisting of prolonged and repeated broad-spectrum antibiotic courses often beginning in childhood, and leading to the appearance of multidrug-resistant strains. In preclinical in vitro studies, BX004 was shown to be active against antibiotic resistant strains of P. aeruginosa~~. Based on recommendations from~~ and demonstrated the ~~Cystic Fibrosis Therapeutic Development Network, we updated our Phase 2 proof-of-concept study design~~ability to penetrate biofilm, an assemblage of surface associated microbial cells enclosed in an extracellular polymeric substance and ~~timelines to a~~one of the leading causes for antibiotic resistance.

The Phase 1b/2a trial in CF patients with chronic respiratory infections caused by P. aeruginosa. ~~On June 27, 2022,~~is comprised of two parts. The study design is based on recommendations from the Cystic Fibrosis Therapeutic Development Network.

In February 2023, we announced ~~the dosing~~positive results from Part 1 of the ~~first two patients in the Phase 1b/2a. The~~ Phase 1b/2a trial ~~will be comprised of two parts.~~evaluating BX004. Part 1 ~~will evaluate~~evaluated the safety, tolerability, pharmacokinetics and ~~microbiologic/clinical~~microbiologic activity of BX004 over a 7-day treatment period in ~~eight~~nine CF patients (7 on BX004, 2 on placebo) with chronic P. aeruginosa pulmonary infection in a single ascending dose and multiple ~~ascending~~ dose design. ~~Due to further delays resulting from the impact of the COVID-19 pandemic, results~~Results from Part 1 ~~are now expected~~of the Phase 1b/2a trial included the following findings: No safety events related to treatment with BX004 occurred; Mean P. aeruginosa colony forming units (CFU) at Day 15 (compared to baseline): -1.42 log (BX004) vs. -0.28 log (placebo). This reduction was seen on top of standard of care inhaled antibiotics; Phage were detected in all patients treated with BX004 during the ~~first quarter~~dosing period, including in several patients up to Day 15 (one week after end of ~~2023.~~ therapy); no phage were detected in patients receiving placebo; there was no emerging resistance to BX004 during or after treatment with BX004; and there was no detectable effect on % predicted FEV1 (Forced Expiratory Volume in 1 second).

Part 2 of the Phase 1b/2a trial ~~will~~is designed to evaluate the safety and efficacy of BX004 in 24 CF patients randomized to a treatment or placebo cohort in a 2:1 ratio. Results from Part 2 are ~~now~~ expected byin the third quarter of 2023.

Atopic Dermatitis

BX005 is our topical phage product candidate targeting Staphylococcus aureus, or S. aureus, a bacterium associated with the development and exacerbation of inflammation in AD. S. aureus is more abundant on the skin of AD patients than on the skin of healthy individuals and on lesional skin than nonlesional skin. It also increases in abundance, becoming the dominant bacteria, when patients experience flares. By reducing the load of S. aureus, BX005 is designed to shift the skin microbiome composition to its ‘pre-flare’ state and potentially provide a clinical benefit. In preclinical in vitro studies, BX005 was shown to eradicate over 90% of strains, including antibiotic resistant strains, from a panel of S. aureus strains (120 strains isolated from skin of subjects from the U.S. and Europe). On March 31, 2021, we announced the selection of the phage cocktail for ~~BX005, our topical phage product candidate targeting~~ ~~Staphylococcus aureus~~~~, or~~ ~~S. aureus~~,BX005.

We are currently supporting a ~~bacterium associated with the development~~range of pre-clinical activities to move this program forward and ~~exacerbation of inflammation in atopic dermatitis. By reducing~~ ~~S. aureus~~ ~~burden, BX005 is designed to shift the skin microbiome composition to its “pre-flare” state to potentially result in~~working on evaluating timelines for a clinical ~~improvement.~~ trial.

On April 8, 2022, the FDA approved ~~the Company’s IND~~our investigational new drug application for BX005. ~~We are working~~

Programs on ~~evaluating timelines for a clinical trial, in coordination with Maruho.~~hold

Inflammatory Bowel Disease and Primary Sclerosing Cholangitis

~~On November 12, 2020, we announced consolidation of our IBD and PSC programs into a single broad host range product candidate, named BX003, under development for both indications. Prior to~~In November 2020, we ~~had two separate phage product candidates for IBD~~combined our inflammatory bowel disease and ~~for PSC, with our IBD~~primary sclerosing cholangitis programs to create a single product candidate called BX003, which targets K. pneumoniae to treat both diseases. Previously, we had separate candidates named BX002 and ~~PSC product candidate named~~ BX003. ~~After the consolidation, the current BX003 product candidate is now under development to treat both IBD and PSC, targeting bacterial strains of~~ ~~Klebsiella pneumoniae~~~~, or~~ ~~K. pneumoniae~~,In February 2021, a potential pathogen implicated in both diseases. Prior to the consolidation, our Phase 1a clinical study was conducted only on BX002, and any future clinical studies, to the extent conducted will be on BX003 for both IBD and PSC.

~~On February 2, 2021, we announced positive results of a randomized, single-blind, multiple-dose, placebo-controlled~~ Phase 1a pharmacokinetic study of BX002 our product candidate for IBD and PSC, conducted under an investigational new drug, or IND, application submitted to the FDA. The study evaluated the safety and tolerability of orally administered BX002 in 18 healthy volunteers. Subjects were randomized to receive orally either BX002 or placebo, twice daily for three days. Subjects were monitored for safety for seven days in a clinical unit, with follow-up monitoring for safety assessments conducted at 14 and 28 days after completion of dosing. BX002demonstrated that it was ~~demonstrated to be~~ safe and well-tolerated with no serious adverse events, and ~~no adverse events leading to discontinuation. In addition, the study met its objective of delivering~~with high concentrations of viable phage delivered to the gastrointestinal ~~tract of approximately 1010 PFU, or plaque forming units. This equals approximately 1,000 times more viable phage compared to the bacterial burden of~~ ~~K. pneumoniae~~ ~~in IBD and PSC patients as measured in stool.~~tract.

On November 15, 2021, we announced that we ~~are pausing the~~paused development efforts ~~of BX003. We are currently~~for BX003 due to prioritizing resources ~~toward~~towards our CF and AD programs, and we cannot currently provide ~~any~~ guidance on resuming ~~the development of BX003.~~its development.

Colorectal Cancer

For our CRC program, we are exploring phage mediated delivery of therapeutic payloads to Fusobacterium nucleatum bacteria residing in the tumors of patients with colorectal cancer.

On November 15, 2021, we announced that we ~~are pausing our CRC program. We are currently~~have paused development efforts for this program due to prioritizing resources ~~toward~~towards our CF and AD programs, and we cannot provide ~~any~~ guidance on resuming ~~the CRC program.~~

~~For more information regarding our product candidates, see Part I, Item 1 “Business” of our 2021 Annual Report.~~its development

COVID-19

In response to the pandemic, we have implemented the mandatory as well as recommended measures to safeguard the health and safety of our employees and clinical trial participants, and the continuity of our business operations. These measures currently include a work from home policy for all employees who are able to perform their duties remotely, and we expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of our employees, clinical trial participants and others in light of COVID-19. As of ~~November 4, 2022,~~May 11, 2023, COVID-19 has not had a material impact on our results of operations. However, uncertainty remains as to the potential impact of COVID-19 on our future research and development activities and the potential for a material impact on the Company increases the longer the virus impacts certain aspects of economic activity around the world. The full extent to which COVID-19 will directly or indirectly impact our business, results of operations and financial condition, including our ability to fulfill our clinical trial enrollment needs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international markets, the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, the ultimate impact on financial markets and the global economy, the effectiveness of vaccines and vaccine distribution efforts and the effectiveness of other actions taken in the United States and other countries to contain and treat the disease. In November 2022, we updated our guidance on the timing of certain clinical milestones resulting from challenges we continue to face in clinical trial enrollment resulting from the impact of the COVID-19 pandemic. It is not currently possible to predict how long the pandemic will last, what the long-term global effects will be, or the time that it will take for economic activity to return to pre-pandemic levels, and we do not yet know the full impact on our business and operations. We will continue to monitor COVID-19 closely and follow health and safety guidelines as they evolve.

Consolidated Results of Operations

Comparison of the Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

The following table summarizes our consolidated results of operations for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:

	Three Months ended September 30,					Three Months ended March 31,
	2022			2021		2023			2022
	USD in thousands					USD in thousands
Research and development (“R&D”) expenses, net		3,536			6,608		4,564			4,929
Amortization of intangible assets		380			380		-			380
General and administrative expenses		2,633			2,845		1,644			2,477
Operating loss		6,549			2,833		6,208			7,786
Other income		(52	)				(91	)
Interest expenses		555			172		565			461
Financial expense (income), net		(280	)		16
Finance income, net							(327	)		(87	)
Loss before tax		6,772			10,021		6,355			8,160
Tax expenses		8			10		6			9
Net loss		6,780			10,031		6,361			8,169
Basic and diluted loss per share of Common Stock		0.23			0.37		0.20			0.27
Weighted average number of shares of Common Stock outstanding, basic and diluted		29,907,812			27,077,903		32,125,227			29,754,240

R&D expenses, net (net of grants received from the ~~Israel Innovation Authority, or the~~ IIA, and ~~considerations~~consideration from research collaborations) were ~~$3.5~~$4.6 million for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$6.6~~$4.9 million for the three months ended ~~September 30, 2021.~~March 31, 2022. The decrease of ~~$3.1~~$0.3 million, or ~~47%~~6%, is primarily due to reduced salaries and related expenses and stock-based compensation expenses that resulted from a reduction in workforce, as part of the ~~following:~~

●

~~a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce, as a result of the Corporate Restructuring;~~

●

~~pausing the development of BX003, the product candidate for the treatment of IBD and PSC;~~

●

~~pausing the development of our CRC product candidate; and~~

●

~~the discontinuation of the development of the product candidate for the treatment of acne, BX001.~~

~~These were~~Corporate Restructuring and due to the delay in pre-clinical and clinical activities related to our AD product candidate, BX005, partially offset by ~~a decrease in IIA grants. We~~expenses related to conducting the clinical trial of our CF product candidate, BX004. The Company recorded ~~$0.2 million~~$0.3 and ~~$0.6~~$0.4 million of IIA grants during the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and September 30, 2021,~~ respectively.

Amortization of intangible assets ended on December 31, 2022 as the intangible asset was fully amortized.

General and administrative expenses were ~~$2.6~~$1.6 million for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$2.8~~$2.5 million for the three months ended ~~September 30, 2021.~~March 31, 2022. The decrease of ~~$0.2~~$0.9 million, or 7%36%, is primarily due to ~~a decrease in~~reduced salaries and related expenses and stock-based compensation expenses due to a reduction in the workforce, as part of the Corporate ~~Restructuring.~~

~~Other income was $52,000 for~~Restructuring, as well as a decrease in the three months ended September 30, 2022. The Company had no other income for the three months ended September 30, 2021. The increase of $52,000, or 100%, is due to a sublease agreement for a portion of our office space in Ness Ziona, Israel entered into in August 2022.Company’s directors and officers insurance premium.

Interest expenses were $0.6 million for the three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$0.2~~$0.5 million for the three months ended ~~September 30, 2021.~~March 31, 2022. The increase of ~~$0.4~~$0.1 million, or 20%, is due to an increasing interest ~~payments incurred~~rate under our loan from Hercules Capital, Inc., or the Hercules Loan, entered into in August 2021.

~~Financial~~Finance income, net was ~~$0.3 million~~$327,000 for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~financial expense, net of $0.02 million~~$87,000 for the three months ended ~~September 30, 2021.~~March 31, 2022. The increase in ~~financial~~finance income, net of ~~$0.3 million~~$240,000, or 276%, is primarily due to the rising interest rates, which resulted in higher interest income and due to appreciation of the U.S. dollar against the NIS.

Basic and diluted loss per share of Common Stock was ~~$0.23~~$0.20 for the three months ended ~~September 30, 2022,~~March 31, 2023, compared to ~~$0.37~~$0.27 for the three months ended ~~September 30, 2021.~~March 31, 2022. The decrease in diluted loss per share of ~~$0.14,~~$0.07, or ~~38%~~26%, is ~~primarily~~ due to a decrease in our operating loss and due to the increase in outstanding shares ~~as part~~resulting from the first closing of ~~a registered direct offering completed~~the PIPE in ~~July 2021 and other issuances of our Common Stock.~~February 2023.

~~Comparison of the Nine Months Ended September 30, 2022 and 2022~~

~~The following table summarizes our consolidated results of operations for the nine months ended September 30, 2022 and 2021:~~

Nine Months ended
September 30,
2022 2021
USD in thousands
R&D expenses, net 13,049 16,102
Amortization of intangible assets 1,139 1,139
General and administrative expenses 7,471 8,436
Operating loss 21,659 25,677
Other income (52 )
Interest expenses 1,504 172
Financial income, net (706 ) (96 )
Loss before tax 22,405 25,753
Tax expenses 26 16
Net loss 22,431 25,769
Basic and diluted loss per share of Common Stock 0.75 1.03
Weighted average number of shares of Common Stock outstanding, basic and diluted 29,812,542 25,120,037

R&D expenses, net (net of grants received from the IIA, and considerations from research collaborations) were $13.0 million for the nine months ended September 30, 2022 compared to $16.1 million for the nine months ended September 30, 2021. The decrease of $3.1 million, or 19%, is primarily due to the following:

●

~~a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce, as a result of the Corporate Restructuring;~~

●

~~pausing the development of BX003, the product candidate for the treatment of IBD and PSC;~~

●

~~pausing the development of our CRC product candidate; and~~

●

~~the discontinuation of the development of the product candidate for the treatment of acne, BX001.~~

~~These were partially offset by a decrease in IIA grants. We recorded $0.9 million and $3.3 million of IIA grants during the nine months ended September 30, 2022 and September 30, 2021, respectively.~~

General and administrative expenses were $7.5 million for the nine months ended September 30, 2022, compared to $8.4 million for the nine months ended September 30, 2021. The decrease of $0.9 million, or 11%, is primarily due to a decrease in salaries and related expenses and stock-based compensation expenses due to a reduction in the workforce, as part of the Corporate Restructuring. In addition, the decrease is due to 2021 expenses from moving into new premises.

Other income was $52,000 for the nine months ended September 30, 2022. The Company had no other income for the nine months ended September 30, 2021. The increase of $52,000, or 100%, is due to a sublease agreement for a portion of our office space in Ness Ziona, Israel entered into in August 2022.

Interest expenses were $1.5 million for the nine months ended September 30, 2022. compared to $0.2 million for the nine months ended September 30, 2021. The increase of $1.3 million, is due to interest payments incurred under the Hercules Loan entered into in August 2021.

Financial income, net was $0.7 million for the nine months ended September 30, 2022, compared to $0.1 million for the nine months ended September 30, 2021. The increase in financial income, net of $0.6 million, or 600%, is primarily due to appreciation of the U.S. dollar against the NIS and due to the rising interest rates, which resulted in higher interest income.

Basic and diluted loss per share of Common Stock was $0.75 for the nine months ended September 30, 2022, compared to $1.03 for the nine months ended September 30, 2021. The decrease in diluted loss per share of $0.28, or 27%, is primarily due to a decrease in our operating loss and due to the increase in outstanding shares as part of a registered direct offering completed in July 2021 and other issuances of our Common Stock.

Liquidity and Capital Resources

We believe our cash and cash equivalents and short-term deposits on hand will be sufficient to meet our working capital and capital expenditure requirements until ~~at least~~into the ~~middle~~third quarter of 2024. We have revised our operating plans in order to reduce expenses including the Corporate Restructuring, which significantly reduced our expenses related to employees, and, subleasing a portion of our office space in Ness Ziona, Israel. We currently plan to continue to focus primarily on BX004, our product candidate for CF and continue our efforts to advance the development plan of BX005, our product candidate for AD. InAlthough we recently completed the PIPE, in the future we will likely require or desire additional funds to support our operating expenses, capital requirements, resumption of our development plans for BX003 or our development plan in CRC or for other purposes. Accordingly, we are exploring and expect to further explore, raising such additional funds through public or private equity, ~~such as the potential second tranche in the Securities Purchase Agreement with the Cystic Fibrosis Foundation, or the CFF Agreement, or~~ debt financings, loans, ~~such as the Hercules Loan,~~ governmental or other grants or collaborative agreements or from other sources, as well as under the ATM Agreement discussed below. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. If there are increases in operating costs for facilities expansion, research and development and clinical activity, we will need to use mitigating actions such as to seek additional financing or postpone expenses that are not based on firm commitments. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.

Cash Flows

The following table summarizes our sources and uses of cash for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021:~~2022:

	Nine Months Ended September 30,						Three Months Ended March 31,
	2022			2021			2023			2022
	USD in thousands						USD in thousands
Net cash used in operating activities		(21,924	)		(18,483	)		(5,045	)		(7,363	)
Net cash provided by (used in) investing activities		(3,575	)		16,276			1,990			(10,020	)
Net cash provided by financing activities		292			33,300			1,050			37
Effect of exchange rate changes on cash and cash equivalents and restricted cash		139			(2	)		13			(4	)
Net increase (decrease) in cash and cash equivalents		(25,207	)		31,091			(1,992	)		(17,350	)

Operating Activities

Net cash used in operating activities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$21.9~~$5.0 million primarily due to a net loss of ~~$22.4~~$6.4 million, mostly due to our R&D and general and administrative expenses, and due to changes in our operating assets and liabilities of ~~$2.8~~$1.0 million, offset by non-cash charges of ~~$3.3~~$0.3 million. Non-cash charges for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 consisted primarily of depreciation and amortization expenses of $0.2 million and stock-based compensation expenses in the amount of $0.2 million. Net changes in our operating assets and liabilities consisted primarily of an increase in trade accounts payable of $0.4 million and in other accounts payable in the amount of $0.8 million, partially offset by an increase in other current assets in the amount of $0.2 million.

Net cash used in operating activities for the three months ended March 31, 2022 was $7.4 million primarily due to a net loss of $8.2 million, mostly due to our R&D and general and administrative expenses, and due to changes in our operating assets and liabilities of $0.6 million, offset by non-cash charges of $1.4 million. Non-cash charges for the three months ended March 31, 2022 consisted primarily of depreciation and amortization expenses of ~~$1.9~~$0.6 million and stock-based compensation expenses in the amount of ~~$1.2~~$0.6 million. Net changes in our operating assets and liabilities consisted primarily of a decrease in trade accounts payable of ~~$1.0~~$1.4 million and in other accounts payable in the amount of ~~$3.4 million and a net change in operating leases in the amount of $0.9~~$0.2 million, partially offset by an increase in other current assets in the amount of ~~$2.5~~$1.2 million.

Net cash used in operating activities for the nine months ended September 30, 2021 was $18.5 million primarily due to a net loss of $25.8 million, mostly due to our R&D and general and administrative expenses, offset by non-cash charges of $4.1 million and changes in our operating assets and liabilities of $3.1 million. Non-cash charges for the nine months ended September 30, 2021 consisted primarily of depreciation and amortization expenses of $1.7 million and stock-based compensation expenses in the amount of $2.7 million, offset by changes in contingent consideration of $0.3 million. Net changes in our operating assets and liabilities consisted primarily due to change in other current assets in the amount of $2.1 million and in other account payables in the amount of $1.8 million, partially offset by a decrease in accounts payable of $0.5 million and a decrease in net change in operating leases of $0.2 million.

Investing Activities

During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash provided by investing activities was ~~$3.6~~$2.0 million, ~~as a result~~mainly consisting of ~~the net change in investment in~~proceeds from short-term deposits of ~~$3.5~~$2.0 million.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, net cash ~~provided by~~used in investing activities was ~~$16.3~~$10.0 million, ~~primarily~~ as a result of ~~liquidation of~~investment in short-term deposits of $19.9 million, partially offset by purchases of property and equipment of $3.6 million which consisted primarily of leasehold improvements and lab equipment as part of construction work on our then new in-house manufacturing facility, laboratories and offices.$10.0 million.

We have invested, and plan to continue to invest, our existing cash in short-term investments in accordance with our investment policy. These investments may include money market funds and investment securities consisting of U.S. Treasury notes, and high quality, marketable debt instruments of corporations and government sponsored enterprises. We use foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, we record gains or losses that offset the revaluation of the balance sheet items under financial income, net in our condensed consolidated statements of operations. As of ~~September 30,~~March 31, 2023, we had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $4.6 million with a fair value of $0.09 million. As of March 31, 2022, we had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately ~~$2.5~~$6.8 million with a fair value of ~~$0.07 million. As of September 30, 2021, we had outstanding foreign exchange contracts in the amount of approximately $2.8 million with a fair value of $0.02~~$0.04 million.

Financing Activities

During the ~~nine~~three months ended ~~September 30,~~March 31, 2023, net cash provided by financing activities was $1.1 million, mainly consisting of the issuance of Common Stock in the first closing of the PIPE of $1.5 million, partially offset by the repayment of long-term debt of $0.4 million.

During the three months ended March 31, 2022, net cash provided by financing activities was ~~$0.3 million, mainly due to issuances of Common Stock pursuant to the Open Market Sales Agreement referred to below.~~

During the nine months ended September 30, 2021, net cash provided by financing activities was $33.3 million, from borrowing under a loan and security agreement, from the issuance of Common Stock in a registered direct offering and$37,000, from the issuance of Common Stock pursuant to the ~~Open Market Sales~~ATM Agreement referred to below.

In December 2020, pursuant to a registration statement on Form S-3 declared effective by the Securities and Exchange Commission on December 11, 2020, we entered into an Open Market Sales Agreement, or the ATM Agreement, with Jefferies LLC, or Jefferies, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell shares of Common Stock having an aggregate offering price of up to $50,000,000 (subsequently reduced to $19,950,000) through Jefferies acting as sales agent. We are not obligated to make any sales of Common Stock under the ATM Agreement. From January 1, ~~2022~~2023 through ~~September 30, 2022,~~May 9, 2023, we ~~issued an aggregate of 229,044 shares of Common Stock under the ATM Agreement for aggregate gross proceeds of $0.28 million. We~~ did not issue any shares of Common Stock ~~pursuant to~~under the ATM ~~Agreement from October 1, 2022 through November 4, 2022.~~Agreement. We may continue to sell shares under the ATM Agreement and otherwise to use our effective shelf registration statement to raise additional funds from time to time.

Under the Loan Agreement, we have a Term Loan Facility, available in three tranches, subject to certain terms and conditions. The first tranche of $15.0 million was advanced to us on the date the Loan Agreement was executed. Upon the occurrence of specified milestones and continuing through December 31, 2022, a loan in the aggregate principal amount of up to $10.0 million or (“the second ~~tranche,~~tranche”), would have become available, and upon the occurrence of specified milestones and continuing through September 30, 2023, a loan in the aggregate principal amount of up to $5.0 million or(“the third tranche”), may have become available. The milestones for the second tranche and for the extension of the period of interest only payments to September 1, 2023, were not reached and have expired. The milestones for the third tranche ~~may become available.~~have not yet been reached as of March 31, 2023 and we do not expect to reach them. We ~~are~~were required to make interest only payments through March 1, 2023, ~~or extended to September 1, 2023 upon satisfaction of certain milestones,~~ and ~~is required~~started to then repay the principal balance and interest in equal monthly installments through September 1, 2025. ~~As of September 30, 2022, the milestones for the remaining tranches and for the extension of the period of interest payment to September 1, 2023, have not yet been reached.~~ Interest on the Hercules Loan accrues at a per annum rate equal to the greater of (i) the Prime Rate as reported in The Wall Street Journal plus 5.70% and (ii) 8.95%. On ~~September 30,~~March 31, 2022, the Prime Rate was ~~6.25%~~8.00%. On ~~September 30, 2022,~~March 31, 2023, the effective interest rate was ~~15.86%~~16.79%.

Under the terms of the Loan Agreement, we granted first priority liens and security interests in substantially all of our intellectual property as collateral for the obligations thereunder. We also granted Hercules the right, at their discretion, to participate in any closing of any single subsequent broadly marketed financing as defined up to a maximum aggregate amount of $2.0 million under the terms as afforded to other investors in such financing. The Loan Agreement also contains representations and warranties by ~~the Company~~us and Hercules, indemnification provisions in favor of Hercules and customary affirmative and negative covenants, including a liquidity covenant beginning October 1, 2022, requiring us to maintain a minimum aggregate compensating cash balance of $5.0 million, and events of default. In the event of default by ~~the Company~~us under the Loan Agreement, ~~the Company~~we may be required to repay all amounts then outstanding under the Loan Agreement. As of ~~September 30, 2022,~~March 31, 2023, we believe we were in compliance with all covenants under the Loan Agreement.

On February 22, 2023, we entered into a Securities Purchase Agreement to issue and sell an aggregate of 15,997,448 shares of our Common Stock and 14,610,714 Pre-Funded Warrants at a price of $0.245 per share and $0.244 per Pre-Funded Warrant, through the PIPE. The gross proceeds from this offering are approximately $7.5 million, before deducting issuance costs. The financing closed in two parts. The first closing, which covers 3,199,491 shares of Common Stock and 2,776,428 Pre-Funded Warrants for gross proceeds of approximately $1.5 million, occurred on February 27, 2023. Such Pre-Funded Warrants became exercisable on February 27, 2023, at an exercise price of $0.001 per share of Common Stock and have no expiration date. In the first closing, we raised net proceeds of approximately $1.3 million, after deducting issuance costs of $0.2 million. The second closing for the remaining Securities was contingent upon approval of the issuance of the additional Securities under the Securities Purchase Agreement by our stockholders in accordance with NYSE American rules, which approval occurred on April 24, 2023. The second closing, which covered 12,797,957 shares of Common Stock and 11,834,286 Pre-Funded Warrants for gross proceeds of approximately $6.0 million, occurred on May 4, 2023. In the second closing, we raised gross proceeds of approximately $6.0 million, before deducting issuance costs.

Outlook

We have accumulated a deficit of ~~$131~~$143.2 million since our inception. To date, we have not generated revenue from our operations and we do not expect to generate any significant revenues from sales of products in the next twelve months. Our cash needs may increase in the foreseeable future. We expect to generate revenues, from the sale of licenses to use our technology or products, but in the short and medium terms any amounts generated are unlikely to exceed our costs of operations. According to our estimates and based on our current operating plans, our liquidity resources as of ~~September 30, 2022,~~March 31, 2023, which consisted primarily of cash, cash equivalents, short-term deposits and restricted cash of approximately ~~$41.5~~$30.3 million and the additional proceeds following closing of the second part of the PIPE in the amount of approximately $6 million will be sufficient to fund our operations until ~~at least~~into the ~~middle~~third quarter of 2024.

Consistent with our ~~continuous~~ongoing R&D activities, we expect to continue to incur additional losses in the foreseeable future. To the extent we require funds above our existing liquidity resources in the medium and long term, we plan to fund our operations, as well as other development activities relating to additional product candidates, through future issuances of public or private equity, including under ~~the CFF Agreement, or under~~ our ATM Agreement, orissuance of debt securities, loans, ~~including the Hercules Loan~~ and possibly additional grants from the IIA or other government or non-profit institutions. Our ability to raise additional capital in the equity and debt markets is dependent on a number of factors including, but not limited to, the market demand for our securities, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that we would be able to raise such additional capital at a price or on terms that are favorable to us.

We entered into forward and option contracts to hedge against the risk of overall changes in future cash flow ~~for~~from payments of salaries and related expenses, as well as other expenses denominated in NIS, for a period of less than one year.

As of ~~September 30, 2022 and September 30, 2021,~~March 31, 2023, we had outstanding foreign exchange contracts for the exchange of USD to NIS in the ~~amounts~~amount of approximately ~~$2.5 million and $2.8 million, respectively.~~$4.6 million. As of March 31, 2022, we had outstanding foreign exchange contracts in the amount of approximately $6.8 million.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to make disclosures under this Item.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation, as of the end of the period covered by this Quarterly Report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September 30, 2022.~~March 31, 2023.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting, as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the quarter ended ~~September 30, 2022~~March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

~~Item 1A. Risk Factors~~

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or future results.

There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 30, 2022, as amended, except as noted below.

~~Risks related to the Hercules Loan Agreement~~

~~Rising interest rates may adversely increase interest rates on our outstanding indebtedness to Hercules~~

On August 16, 2021, we entered into the Loan Agreement, with Hercules, providing for a term loan in an aggregate principal amount of up to $30.0 million, subject to funding in three tranches and subject to certain terms and conditions, or the Term Loan. We received the first tranche of $15.0 million promptly after signing the Loan Agreement. Two additional tranches in the amounts of $10 million and $5 million may become available to us to borrow upon the occurrence of certain milestone events.

Interest on the Term Loan accrues at a per annum rate equal to the greater of (i) the Prime Rate as reported in The Wall Street Journal plus 5.70% and (ii) 8.95%. On September 30, 2022, the Prime Rate was 6.25%, which reflects an increase of 3% from the Prime Rate on September 30, 2021, which was 3.25%. Accordingly, the interest rate on the Term Loan increased from 8.95% to 11.95%, which results in an additional payment of interest.

The rising interest rates caused due to global inflation, and the dependency of the interest paid on the Term Loan on the Prime Rate, result in an increase in the repayment of the Term Loan, and may adversely decrease our cash reserve, affect our ability to finance research and development activities and affect our ability to repay the loan or qualify for the additional tranches of the Term Loan.

If we default under the Loan Agreement, Hercules may accelerate all of our repayment obligations and take control of our pledged assets, potentially requiring us to renegotiate our agreement on terms less favorable to us or to immediately cease operations. Further, if we are liquidated, the lenders’ right to repayment would be senior to the rights of the holders of our Common Stock to receive any proceeds from the liquidation. Any declaration by Hercules of an event of default could significantly harm our business and prospects and could cause the price of our Common Stock to decline. If we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.

Item 6. Exhibits

No.		Description of Exhibit
3.1*3.1		~~Composite Copy of Amended and Restated Certificate of Incorporation of the Company, effective on December 11, 2018, as amended to date (clean version).~~

3.2*		Composite Copy of Amended and Restated Certificate of Incorporation of the Company, effective on December 11, 2018, as amended to date. ~~(marked version)~~(Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company on November 9, 2022)

~~3.3~~3.2		Amended and Restated Bylaws of the Company, effective as of October 28, 2019 (Incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

10.1*		Form of Indemnification Agreement

31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a)

31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a)

32**		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS*		Inline XBRL Instance Document.

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.

**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BIOMX INC.

Date: ~~November 9, 2022~~May 15, 2023	By:	/s/ Jonathan Solomon
	Name:	Jonathan Solomon
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: ~~November 9, 2022~~May 15, 2023	By:	/s/ Marina Wolfson
	Name:	Marina Wolfson
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

109

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		Page
Part I. Financial Information		1
Item 1. Financial Statements		1
Condensed Consolidated Balance Sheets (unaudited)		F-1
Condensed Consolidated Statements of Operations (unaudited)		F-3
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)		F-4
Condensed Consolidated Statements of Cash Flows (unaudited)		F-6
Notes to Condensed Consolidated Financial Statements (unaudited)		F-7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2
Item 3. Quantitative and Qualitative Disclosures About Market Risk		7
Item 4. Controls and Procedures		7
Part II. Other Information		8
Item ~~4. Controls and Procedures~~6. Exhibits.		8

Part ~~II. Other Information~~III. Signatures		9
~~Item 1A. Risk Factors~~		9
~~Item 6. Exhibits~~		9

~~Part III. Signatures~~		10