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

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

Former name, former address and former fiscal year, if changed since last report:n/a

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.

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 ~~May 14,~~November 9, 2020, ~~22,925,860~~23,177,922 shares common stock, par value $0.0001 per share, were issued and outstanding.

This quarterly report on Form 10-Q (the “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange ~~Act.~~Act of 1934, as amended (the “Exchange Act”), and other securities laws. For example, we are making forward-looking statements when we discuss our clinical and pre-clinical development program, including 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 BOLT platform, as described below, the potential of our product candidates, the potential effect of the coronavirus disease 2019 (“COVID-19”) on our business and levels of expenses, sufficiency of financial resources and financial needs. These statements include words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. 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: our limited operating history; 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; the U.S. Food and Drug Administration’s (“FDA”) classification of our BX001 product candidate as a drug or cosmetic and the impact of changing regulatory requirements on our ability to develop and commercialize BX001; obtaining FDA acceptance of any non-U.S. clinical trials of product candidates; 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; the ability of our product candidates to demonstrate requisite safety and tolerability for cosmetics, 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; 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 health care 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 manage the growth of the business; 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; potential security breaches, including cybersecurity incidents; 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, 2019 (the “2019 Annual Report”).

For a detailed discussion of these and other risks, uncertainties and factors, see Part I, Item 1A— “Risk Factors” of our 2019 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. ~~We undertake~~Except as required by law, we are under no duty to (and expressly disclaim any such obligation ~~to publicly~~to) update or revise any of the forward-looking ~~statements.~~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.

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

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

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (unaudited)

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

~~The accompanying notes are an integral part of these interim consolidated financial statements.~~

~~INTERIM~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY(unaudited)

~~The accompanying notes are an integral part of these interim consolidated financial statements.~~

~~INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY~~~~(unaudited)~~

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

BiomX Inc. ~~(together~~(formerly known as Chardan Healthcare Acquisition Corp., individually prior to the Recapitalization Transaction (as defined below), and together with its subsidiaries, BiomX Ltd. and RondinX Ltd., after the Recapitalization Transaction, the “Company” or “BiomX” ~~and formerly known as Chardan Healthcare Acquisition Corp.~~) 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, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

On July 16, 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 (“SRS”), as amended on October 11, 2019, pursuant to which, among other things, BiomX Israel merged with Merger Sub, with BiomX Israel being the surviving entity in accordance with the Israeli Companies Law, 5759-1999, as a wholly owned direct subsidiary of BiomX Inc.

On October 28, 2019, the Company ~~acquired~~consummated the acquisition of 100% of the outstanding shares of BiomX Israel (the “Recapitalization Transaction”). Pursuant to the aforementioned merger agreement, in exchange for all of the outstanding shares of BiomX Israel, the Company issued to the shareholders of BiomX Israel a total of 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 Recapitalization Transaction. As a result of the Recapitalization Transaction, BiomX Israel became a wholly owned subsidiary of the Company. As the shareholders of BiomX Israel received the largest ownership interest in the Company, BiomX Israel was determined to be the “accounting acquirer” in the ~~reverse recapitalization.~~Recapitalization Transaction. As a result, the historical financial statements of the Company were replaced with the financial ~~statement~~statements of BiomX Israel for all periods presented.

Following the Recapitalization Transaction, the Company retained $60.1 ~~million~~thousand held in a trust account, after redemptions of ~~IPO~~a portion of shares of Common Stock issued in the initial public offering of the Company and held by certain shareholders.

The ~~number~~numbers of shares and instruments convertible into shares included within these financial statements have been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.

~~The Commons Stock of the Company began trading on the NYSE American stock exchange on~~On October 28, 2019, ~~and~~ the Company was renamed BiomX Inc.

~~On October 29, 2019,~~ and the Company’s shares of Common Stock, units, and warrants began trading in 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~~Tel Aviv Stock Exchange.

To date, the Company has not generated revenue from its operations. As of ~~March 31,~~September 30, 2020, the Company had ~~unrestricted~~a cash and cash ~~equivalent~~equivalents and restricted cash balance of approximately ~~$ 65 million~~$54 thousand and short-term deposits of approximately $10 ~~million,~~thousand, which management believes is sufficient to fund its operations for more than 12 months from the date of issuance of these ~~interim~~condensed consolidated financial statements and sufficient to fund its operations necessary to continue development activities of its current proposed products.

Consistent with its continuing R&D 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 and possibly additional grants from the ~~IIA and~~Israel Innovation Authority (“IIA”) or other government or non-for-profit 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 ~~the Company.~~it.

The accompanying unaudited ~~interim~~condensed consolidated financial statements have been prepared in accordance with U.S. ~~GAAP~~generally accepted accounting principles (“GAAP”) for ~~interim~~condensed financial information and with the instructions to Form 10-Q and Article 10 of ~~U.S. Securities and Exchange Commission (“SEC”) regulations.~~Regulation S-X. Accordingly, 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 presentation 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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, that wethe Company filed with the U.S. Securities and Exchange Committee (the “SEC”) on March 26, 2020.

The preparation of financial statements in conformity with ~~generally accepted accounting principles~~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.

Certain prior year amounts have been reclassified to conform to the current year presentation.

The significant accounting policies followed in the preparation of these unaudited ~~interim~~condensed consolidated financial statements are identical to those applied in the preparation of the latest annual audited financial statements with the exception of the following:

In June 2016, the FASB issued ASU 2016-13 “Financial Instruments – Credit Losses” 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. The ASU replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. The Company adopted this ASU on January 1, 2020. There was not a material impact on the interim consolidated financial statements.

In August 2018, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) No. 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements,” which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements and is effective for the Company beginning on January 1, 2020. This standard did not have a material ~~effect~~impact on the Company’s ~~interim~~condensed consolidated financial ~~statements.~~statements and related disclosures.

In November 2018, the FASB issued ASU No. 2018-18, – “Collaborative Arrangements (Topic 808),” which clarifies the interaction between Topic 808 and Topic 606, ~~Revenue~~“Revenue from Contracts with ~~Customers.~~Customers”. The Company adopted this standard in the first quarter of fiscal year 2020. This standard did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses”, 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. The ASU replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This guidance is effective for the Company beginning on January 1, 2023, with early adoption permitted. The Company does not expect that the adoption of this standard will have a significant impact on its condensed consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income ~~Taxes~~Taxes” (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for the Company beginning on January 1, 2021, with early adoption permitted. The Company does not expect that the adoption of this standard will have a significant impact on ~~the~~its condensed consolidated financial statements and related disclosures.

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, 2020, the Company had outstanding foreign exchange contracts in the amount of approximately $3.5 thousand. As of September 30, 2019, the Company had no outstanding foreign exchange contracts.

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 period ended September 30, 2020 and year ended December 31, 2019.

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

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 current liabilities, due to their short-term nature.

Short-term deposits represent time deposits placed with banks with original maturities of greater than three months but less than one year. Interest earned is recorded as ~~finance~~financial income in the condensed consolidated statements of ~~comprehensive loss~~operations during the ~~years~~periods for which the Company held short-term deposits.

As of ~~March 31,~~September 30, 2020, the Company had deposits dominated in ~~USD~~New Israeli Shekels (“NIS”) and in ~~ILS~~USD at Leumi Bank (Israel) and BHI USA ~~that bear~~with various fixed annual interest rates in the range of ~~1.0%~~0.5% - ~~1.75%.~~1.58% per year. As of ~~March 31,~~September 30, 2019, the Company had deposits at Leumi Bank (Israel) and BHI USA ~~that bore~~with various fixed annual interest rates in the range of ~~0.21%~~2.4% - ~~3.63%.~~3.6% per year.

On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Topic 842)” using the modified retrospective approach for all lease arrangements at the beginning period of adoption. The Company leases office space under operating leases. ~~At March 31,~~As of September 30, 2020, the Company’s ~~ROU~~right-of-use assets and lease liabilities for operating leases totaled ~~$1,066 thousand~~$4,370 and ~~$1,101 thousand~~$4,499, respectively.

In May 2017, BiomX Israel entered into a lease agreement for office space in Ness Ziona, ~~Israel. The agreement is~~Israel for five years, beginning on June 1, 2017, with an option to extend for an additional five years. Monthly lease payments under the agreement are approximately ~~$19 thousand.~~$18. As part of the agreement, the Company has obtained a bank guarantee in favor of the property owner in the amount of approximately ~~$94 thousand~~$95, representing four monthly lease and related payments. Lease expenses recorded in the ~~interim~~condensed consolidated statements of operations were ~~$52 thousand~~$55 and ~~$48 thousand~~$163 for the three and nine months ended ~~March 31,~~September 30, 2020, respectively. Lease expenses recorded in the condensed consolidated statements of operations were $48 and $96 for the three and nine months ended September 30, 2019, respectively.

In September 2019, BiomX Israel entered into a lease agreement for office space in Ness Ziona, ~~Israel. The agreement is~~Israel for five years beginning on September 8, 2019, with an option to extend for an additional period until July 14, 2027. Monthly lease payments under the agreement are approximately ~~$12 thousand.~~$12. As part of the agreement, BiomX Israel ~~will~~obtained a bank guarantee in favor of the property owner in the amount of approximately $59, representing four monthly lease and related payments. Lease expenses recorded in the condensed consolidated statements of operations were $35 and $105 for the three and nine months ended September 30, 2020, respectively. Lease expenses recorded in the condensed consolidated statements of operations were $8 for the three and nine months ended September 30, 2019, respectively.

In September 2020, BiomX Israel entered into a lease agreement for office space in Ness Ziona, Israel for five years beginning on September 1, 2020, with an option to extend for an additional period until November 30, 2030. This agreement supersedes the above-mentioned May 2017 and September 2019 lease agreements and sets the prior lease agreements’ end date to March 31, 2021. Monthly lease payments under the new lease agreement are approximately $50. As part of the agreement, BiomX Israel is exempt from monthly payments under the new agreement until January 15, 2021. BiomX Israel undertook to obtain a bank guarantee in favor of the property owner in the amount of approximately ~~$58 thousand~~$208, representing four monthly lease and related payments. ~~Lease expenses recorded in the interim consolidated statements of operations were $36 thousand for the three months ended on March 31, 2020.~~

Supplemental cash flow information related to operating leases was as ~~follows (USD in thousands):~~follows:

As of ~~March 31,~~September 30, 2020, the Company’s operating leases had a weighted average remaining lease term of 410. 2 years and a weighted average discount rate of 3%6%. Future lease payments under operating leases as of ~~March 31,~~September 30, 2020 were as ~~follows (USD in thousands):~~follows:

OnIn November ~~19,~~ 2017, BiomX Israel signed a share purchase agreement with the shareholders of RondinX Ltd. In accordance with the share purchase agreement, BiomX Israel acquired 100% control and ownership of RondinX Ltd. for consideration valued at $4.5 ~~million.~~thousand. The consideration included the issuance of 250,023 Preferred A Shares, the issuance of warrants to purchase an aggregate of 4,380 Series A-1 preferred shares and additional contingent consideration. The contingent consideration is based on the attainment of future clinical, developmental, regulatory, commercial and strategic milestones relating to product candidates for the treatment of primary sclerosing cholangitis or entry into qualifying collaboration agreements with certain third ~~parties and~~parties. The contingent consideration may require the Company to issue 567,729 ~~ordinary~~ shares of Common Stock upon the attainment of certain milestones, as well as make future cash payments and/or issue additional shares of the most senior class of the Company’s shares authorized or outstanding as of the time the payment is due, or a combination of both of up to $32 ~~million of the Company~~thousand within ten years from the closing of the ~~agreement and/or~~share purchase agreement. The contingent consideration may also require the Company to pay a qualifying up-front fee upon entering of agreements with certain third parties or their affiliates ~~that include a qualifying up-front fee and is entered into~~ within three years from the closing of the share purchase agreement. The Company has the discretion of determining whether milestone payments will be made in cash or by issuance of shares.

~~The contingent consideration is accounted for at fair value (level 3).~~ There were no changes in the fair value hierarchy leveling during the ~~three~~nine months ended ~~March 31,~~September 30, 2020 ~~and~~or 2019.

The change in the fair value of the contingent consideration as of ~~March 31,~~September 30, 2020 and 2019 was as ~~follows (USD in thousands):~~follows:

Intangible assets acquired in the RondinX Ltd. acquisition (see Note 5) were determined to be in-process R&D. In accordance with ASC 350-30-35-17A (“Intangible assets with indefinite lives”), R&D assets acquired in a business combination are considered an indefinite-lived intangible asset until completion or abandonment of the associated R&D efforts. ~~Once~~On January 1, 2020, the in-process R&D efforts ~~are complete, the~~were completed. The Company ~~will determine~~had determined the useful life of the R&D assets for three years and ~~will amortize~~began amortizing these assets accordingly in the financial statements. ~~As of March 31, 2020, the in-process R&D efforts have been completed. The Company has determined the definite useful life of three years for the intangible asset.~~ Amortization expenses recorded in the ~~interim~~condensed consolidated statements of operations were $379 ~~thousand~~and $1,137 for the three and nine months ended ~~on March 31, 2020.~~September 30, 2020, respectively. Based on management’s analysis, there was no impairment for the three and nine months ended ~~March 31,~~September 30, 2020 and 2019.

In December 2019, the IIA approved a new application for a total budget of NIS 10.8 ~~million~~thousand (approximately $3.1 ~~million)~~thousand). IIA ~~will fund~~committed to funding 30% of the approved budget. The program is for the period beginning ~~from~~ July 2019 through December 2019. BiomX Israel has not yet submitted the final report to the IIA for this program.

During ~~December 2019 BiomX Israel submitted three additional applications to~~April 2020, the IIA ~~for~~approved a ~~total budget of NIS 41.1 million (approximately $11.9 million). IIA approved one,~~new application for a total budget of NIS 15.6 ~~million~~thousand (approximately ~~$ 4.4 million)~~$4.4 thousand). The IIA ~~will fund~~committed to funding 30% of ~~this~~the approved budget. The program is for the period beginning ~~from~~ January 2020 through December 2020. As of ~~March 31,~~September 30, 2020, the ~~company had not yet~~Company received ~~grants~~NIS 1.6 thousand (approximately $0.5 thousand) from the IIA with respect to ~~the~~this program.

According to the agreement with the IIA, 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.~~USD. 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 the Company. 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 Company’s R&D programs and generating sales. The Company 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 ~~March 31, 2020;~~September 30, 2020, therefore, no liability was recorded in these condensed consolidated financial statements.

As of ~~March 31,~~September 30, 2020, the Company had a contingent ~~obligation~~liability to the IIA in the amount of approximately ~~2.2 million~~$2.3 thousand including annual interest of LIBOR linked to the USD.

In July 2019, the Company ~~Yeda~~ and ~~BiomX Israel~~Yeda amended the 2015 License Agreement and the 2017 License Agreement with ~~Yeda (the “Amendment”).~~Yeda. See ~~note 7I~~Note 7H regarding the ~~amendment.~~Yeda Amendment.

In April 2019, BiomX Israel signed additional patent license agreement with Keio University and JSR Corporation in Japan. According to the agreement, BiomX Israel received an exclusive sublicense by JSR to certain patent license to certain patent rights related to the Company’s Primary Sclerosing Cholangitis program. In return, the Company is required (i) to pay a license issue fee of $20,000 and annual license fees ranging from $15,000 to $25,000 and (ii) make additional payments based upon the achievement of clinical and regulatory milestones up to an aggregate of $3.2 million (“milestone payments”) and (iii) make tiered royalty payments, in the low single digits based on future revenue. The consolidated financial statements include liabilities with respect to this agreement in the amount of $234 thousand and $217 as of March 31, 2020 and December 31, 2019 respectively.

The Company is authorized to issue 60,000,000 shares of Common Stock. Holders of the Company’s Common Stock are entitled to one vote for each share. As of ~~March 31,~~September 30, 2020, the Company had ~~22,925,860~~23,173,378 issued shares and ~~22,920,160~~23,167,678 outstanding shares of Common Stock.

As detailed in Note 1, as part of the Recapitalization Transaction on October 28, 2019, the Company issued 15,069,058 shares of Common ~~Shares~~Stock in exchange for approximately 65% of the issued and outstanding ordinary shares and all the preferred shares of BiomX Israel. The number of shares prior to the Recapitalization Transaction ~~have~~has been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization Transaction.

In addition, the Company also agreed to issue the following number of additional shares of Common Stock, in the aggregate, to Chardan Healthcare Acquisition Corp. shareholders on a pro rata basis, subject to the Company’s achievement of the conditions specified below following the ~~recapitalization transaction~~Recapitalization Transaction (all with respect to the Company’s ~~common~~ shares of Common Stock traded on ~~the NYSE)~~NYSE American):

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.

BIOMX INC.

(formerly known as Chardan Healthcare Acquisition ~~Corp)~~Corp.)

NOTES TO ~~INTERIM~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8

–

SHAREHOLDERS EQUITY (Cont.)

C.B.

Share-based compensation:

In 2015, the ~~board~~Board of ~~directors~~Directors of BiomX Israel approved a plan ~~(original option plan)~~ for the allocation of options to employees, service providers and officers (the “2015 Plan”). The options represented a right to purchase ~~1 Ordinary Share~~one ordinary share of ~~the~~ BiomX Israel in consideration of the payment of an exercise price. ~~Also, the~~The options were granted in accordance with the “capital gains route” under section 102 and section 3(i) of the Israeli Income Tax Ordinance and section 409A of the Israeli Internal Revenue Code.

The original ~~option plan~~2015 Plan was adjusted ~~in 2019~~ following the Recapitalization Transaction on October 28, ~~2019. Following the Recapitalization Transaction,~~2019 such that each outstanding option entitles its holder to purchase 1one share of Common Stock ~~share~~ of the Company. As a result, the number of options and exercise price per share were adjusted in a technical manner such that there was no change in the fair value of the awards under the adjusted ~~option plan.~~2015 Plan. The number of outstanding options and exercise prices in this Note have been restated to reflect the adjusted ~~option plan.~~2015 Plan. As of ~~March 31,~~September 30, 2020, there are no shares remaining for issuance under the ~~original option plan.~~2015 Plan.

During 2019, the Board approved the grant of 704,669 options ~~without consideration~~ to 22 employees and 79,630 options to two consultants, without ~~consideration to 2 consultants.~~consideration. 527,716 of the options granted are to the executive officers of the Company. ~~Option~~These options were granted under the 2015 ~~plan.~~Plan.

During 2019, 74,581 options were exercised to purchase ~~ordinary~~ shares of Common Stock at an average exercise price of $1.34 per share.

Certain senior employees and directors are entitled to full acceleration of their unvested options upon the occurrence of ~~cumulative two certain events.~~both a change in control of the Company and the end of their engagement with the Company.

~~The~~In 2019, the Company adopted a new incentive plan ~~in 2019~~ (the “2019 Plan”) to grant 1,000 options, exercisable tofor Common ~~Stock, par value $0.0001 per share. On January 1, 2020 number of options available to grant was increased by 914,741 options.~~Stock.

The aggregate number of shares of Common Stock that may be delivered pursuant to the 2019 Plan will automatically increase on January 1 of each year, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to four percent (4%) of the total number of shares of Common Stock outstanding on December 31 of the preceding calendar year. Notwithstanding the foregoing, the Board of Directors may act prior to January 1 of a given year to provide that there will be no January 1 increase for such year or that the increase for such year will be a lesser number of Common Stock than provided herein. On January 1, 2020, ~~there were 915,741~~the number of shares of Common Stock available ~~for issuance~~to grant under the 2019 ~~Plan.~~Plan was increased by 914,741.

On March 25, 2020, the Board of Directors approved the grant of 814,700 options without consideration to 65 employees, one consultant, four senior officers (one of whom is a consultant), and six directors under the 2019 ~~Incentive~~ Plan. ~~Options~~These options were granted at an exercise price of ~~$ 6.21~~$6.21 per share with vesting periods ranging from three to four years. Directors and ~~Senior~~senior officers are entitled to full acceleration of their unvested options upon the occurrence of ~~cumulative two certain events.~~ both a change in control of the Company and the end of their engagement with the Company.

On May 5, 2020, the Board of Directors approved the grant of 79,000 options without consideration to four employees, under the 2019 Plan. These options were granted at an exercise price of $5.59 per share with a vesting period of four years.

As of ~~March 31,~~September 30, 2020, there ~~are 101,041~~were 48,041 shares available for issuance under the 2019 ~~plan.~~Plan. Refer to Note 11A for options granted on October 2, 2020.

BIOMX INC.

(formerly known as Chardan Healthcare Acquisition ~~Corp)~~Corp.)

NOTES TO ~~INTERIM~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8

–

SHAREHOLDERS EQUITY (Cont.)

C.B.

Share-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:

	Three months ended March 31,				Nine months ended September 30,
	2020		2019		2020		2019
Underlying value of ordinary share ($)		6.21		2.03

Underlying value of share of Common Stock ($)						5.59-6.21		2.03
Exercise price ($)		6.21		2.03		5.59-6.21		2.03
Expected volatility (%)		85.0		93.1		85.0		93.1
Term of the option (years)		6.25		6.25		6.25		6.25
Risk-free interest rate (%)		0.52		2.23		0.37-0.52		2.23

The cost of the benefit embodied in the options granted during the ~~three~~nine months ended ~~March 31,~~September 30, 2020, based on their fair value as at the grant date, is estimated to be ~~approximately $3.6 million.~~$3.8 thousand. These amounts will be recognized in the condensed consolidated statements of operations over the vesting period.

(1)

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

	For the three months ended March 31, 2020							For the nine months ended September 30, 2020
	Number of Options			Weighted average exercise price		Aggregate intrinsic value		Number of Options			Weighted average exercise price		Aggregate intrinsic value
											USD		USD in thousands
Outstanding at the beginning of period		3,143,802			1.09		25,733		3,143,802			1.09		25,733
Granted		814,700			6.21				893,700			6.16
Forfeited		(16,747	)		1.69				(61,110	)		3.47
Exercised		(57,325	)		1.85				(304,843	)		0.70
Outstanding at the end of period		3,884,430			2.87		16,035		3,671,549			3.08		12,665
Vested at end of period		1,654,090							1,738,957
Weighted average remaining contractual life – years as of March 31, 2020		6.96
Weighted average remaining contractual life – years as of September 30, 2020									7.82

BIOMX INC.

(formerly known as Chardan Healthcare Acquisition ~~Corp)~~Corp.)

NOTES TO ~~INTERIM~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8

–

SHAREHOLDERS EQUITY (Cont.)

C.B.

Share-based compensation: (Cont.)

Warrants:

As of ~~March 31,~~September 30, 2020 and December 31, 2019, the Company had the following outstanding warrants to purchase Common Stock as follows:

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 (USD)			Number of Shares of Common Stock Underlying Warrants
Private Warrants issued to Yeda (see 1 below)	May 11, 2017	May 11, 2025		(*	)		591,382	May 11, 2017	May 11, 2025		(*	)		591,382
Private Warrants issued to Founders (see 2 below)	November 27, 2017			-			10,589
Private Warrants issued to founders (see 2 below)								November 27, 2017			-			10,589
Private Placement Warrants (see 3 below)	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 (see 4 below)	IPO (December 13, 2018)	October 28, 2024	$	11.50			3,500,000	IPO (December 13, 2018)	October 28, 2024		11.50			3,500,000
							7,001,971							7,001,971

(*)

less than $0.001.

In May 2017, in accordance with the 2017 License Agreement (see also Note ~~10C)~~7C), ~~the Company~~BiomX Israel issued 591,382 warrants to Yeda ~~for nominal consideration, 591,382 warrants~~ to purchase Common Stock at $0.0001 nominal ~~value.~~value, for nominal consideration. No expenses or income were recorded in R&D expenses, net in the condensed consolidated statements of comprehensive loss for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 and 2019.

236,552 warrants were fully vested and exercisable on the date of their issuance. The remainder of the warrants will vest and become exercisable subject to achievement of certain milestones specified in the agreement as follows:

177,414 upon the filing of a patent application covering any Discovered Target or a Product (both as defined in the 2017 License Agreement).

118,277 upon achievement of the earlier of the following ~~milestone~~milestones by the Company:

(i)

execution of an agreement with a pharmaceutical company with respect to the commercialization of any of the Company’s licensed technology or the Consulting IP or a Product (both defined in the 2017 License Agreement); or

(ii)

the filing of a patent application covering any Discovered Target (as defined in the 2017 License Agreement) or a Product.

59,139 upon completion of a Phase 1 clinical trial in respect of a ~~Product.~~Product (as defined in the 2017 License Agreement).

BIOMX INC.

(formerly known as Chardan Healthcare Acquisition ~~Corp)~~Corp.)

NOTES TO ~~INTERIM~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8

–

SHAREHOLDERS EQUITY (Cont.)

C.B.

Share-based compensation: (Cont.)

In November 2017, ~~the Company~~BiomX Israel issued 7,615 warrants to Yeda and 2,974 warrants to its founders. All 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.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the ~~Initial Public Offering~~Company initial public offering, except that the Private Placement Warrants are exercisable for cash (even if a registration statement covering the shares of Common Stock issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by the Company, in each case, so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Public Warrants became exercisable upon Closing of the Reverse Recapitalization. No fractional shares will be issued upon exercise of the Public Warrants. Therefore, Public Warrants must be exercised in multiples of two warrants. The Company filed a Registration Statement on Form S-1 for the resale of shares underlying the warrants on December 13, 2019, which was declared effective on January 3, 2020.

The Public Warrants became exercisable upon the closing of the Recapitalization Transaction. No fractional shares will be issued upon exercise of the Public Warrants. Therefore, Public Warrants must be exercised in multiples of two warrants. The Public Warrants will expire five years after the completion of the ~~Reverse~~ Recapitalization Transaction or earlier upon redemption or liquidation. The Company filed a Registration Statement on Form S-1 for the resale of shares underlying the warrants on December 13, 2019, which was declared effective on January 3, 2020.

The Company may redeem the Public Warrants:

	●	in whole and not in part;

	●	at a price of $0.01 per warrant;

	●	at any time during the exercise period;

	●	upon a minimum of 30 days’ prior written notice of redemption;

	●	if, and only if, the last sale price of the Company’s ~~common stock~~Common Stock equals or exceeds $16.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders; and

	●	if, and only if, there is a current registration statement in effect with respect to the shares of ~~common stock~~Common Stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants.

BIOMX INC.

(formerly known as Chardan Healthcare Acquisition ~~Corp)~~Corp.)

NOTES TO ~~INTERIM~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 8

–

~~SHAREHOLDERS EQUITY (Cont.)~~

~~Share-based compensation:~~–

SHAREHOLDERS EQUITY (Cont.)

(2)

The following table sets forth the total share-based payment expenses resulting from options granted, included in the condensed consolidated statements of ~~operation:~~operations:

					Nine months ended September 30,
	Three months ended March 31,				2020		2019
	2020		2019
R&D		192		194
Research and development expenses, net						1,345		520
General and administrative		145		110		783		360
		337		304		2,128		880

	Three months ended September 30,
	2020		2019

Research and development expenses, net		843		153
General and administrative		271		96
		1,114		249

NOTE 9

–

RELATED PARTIES

On October 31, 2018, BiomX Israel entered into a research collaboration agreement with Janssen Research & Development, LLC (“Janssen”), an affiliate of shareholder Johnson & Johnson Development Corporation, for a collaboration on biomarker discovery for ~~inflammatory bowel disease (“IBD”).~~IBD. Under the agreement, BiomX isIsrael was eligible to receive fees totaling $167 ~~thousand~~ in installments of $50 ~~thousand~~ within 60 days of signing of the agreement, $17 ~~thousand~~ upon completion of data processing and two installments of $50 ~~thousand~~ each upon delivery of Signature Phase I of the Final Study Report (both terms defined within the agreement). ~~Unless terminated earlier, this~~This agreement ~~will continue~~was in effect until 30 days after the parties ~~complete~~completed the research program and BiomX ~~provide~~Israel provided Janssen with a final study report. The research period started during March 2019 and ended onin September 2019. The final report was provided to Janssen in December 2019.

BIOMX INC.

(formerly known as Chardan Healthcare Acquisition Corp.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

NOTE 10

–

BASIC LOSS PER SHARE

The basic and diluted net loss per share and weighted average number of shares of ~~Ordinary Shares~~Common Stock used in the calculation of basic and diluted net loss per share are as ~~follows (USD in thousands, except share and per share data):~~follows:

	Three months ended March 31,				Nine months ended September 30,
	2020		2019		2020		2019

Net loss		5,901		3,225		20,942		11,263
Interest accrued on preferred shares (pre-merger – BiomX Ltd.)		-		1,183
Interest accrued on preferred shares (pre-merger – BiomX Israel)						-		3,594
Net loss used in the calculation of basic net loss per share		5,901		4,408		20,942		14,857
Net loss per share		0.26		2.20		0.91		7.37
Weighted average number of Common Stock		22,897,723		2,005,043
Weighted average number of shares of Common Stock						23,013,790		2,015,349

~~BIOMX INC.~~

~~(formerly known as Chardan Healthcare Acquisition Corp)~~

~~NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS~~

	Three months ended September 30,
	2020		2019

Net loss		8,835		4,260
Interest accrued on preferred shares (pre-merger – BiomX Israel)		-		1,212
Net loss used in the calculation of basic net loss per share		8,835		5,472
Net loss per share		0.38		2.69
Weighted average number of shares of Common Stock		23,150,253		2,035,625

NOTE 11

–

SUBSEQUENT EVENTS

~~On May 5, 2020, the Board of Directors approved the grant of 79,000 options to four employees under the 2019 Incentive Plan. Options were granted at an exercise price of $5.59~~
A. On October 2, 2020, the Company’s Board of Directors approved the grant of 32,000 options without consideration to two directors under the 2019 Plan. These options were granted at an exercise price of $6.44 per share with a vesting period of four years. Directors 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.

In October 2020, the Company and MIT amended the 2017 Patent License Agreement. Pursuant to the MIT Amendment, BiomX Israel will continue to receive an exclusive, royalty-bearing license to certain patents held by MIT. In return, BiomX Israel is required to pay certain license maintenance fees of up to $250 in each subsequent year and following the commercial sale of licensed products. BiomX Israel is also required to make payments to MIT upon the satisfaction of development and commercialization milestones totaling up to $4.7 thousand in aggregate, as well as royalty payments on future revenues.

On October 1, 2020, the Company entered into a lease agreement for office space in Branford, Connecticut for 25 months beginning on October 5, 2020. Monthly lease payments under the agreement are approximately $4. As part of the agreement, the Company is required to deposit $8 as a security, representing two monthly lease and related payments.

2122

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

References in this Quarterly Report to “we,” “us,” the “Company” or similar words refer to the combined company, BiomX Inc. When this Quarterly Report references “BiomX” and describes the business of BiomX, it refers to the business of BiomX Ltd., an Israeli company and wholly-owned subsidiary of the ~~Company.~~Company, and RondinX Ltd., an Israeli company and wholly-owned subsidiary of BiomX Ltd. The financial statements included in this Quarterly Report show the condensed consolidated balances and transactions of the Company and BiomX and ~~may also~~ show comparative financial information of BiomX (the acquirer in a reverse merger for accounting purposes). 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.

Pursuant to a merger agreement dated as of July 16, 2019 and amended as of October 11, 2019, among other things, CHAC Merger Sub Ltd., an Israeli company and wholly owned subsidiary of the Company, merged with and into BiomX, with BiomX continuing as the surviving entity and a wholly-owned subsidiary of the Company (the ~~“Business Combination”~~“Recapitalization Transaction”). The ~~Business Combination~~Recapitalization Transaction was treated as a “reverse merger” in accordance with GAAP. For accounting purposes, BiomX was considered to have acquired the Company. Therefore, for accounting purposes, the ~~Business Combination~~Recapitalization Transaction was treated as the equivalent of a capital transaction in which BiomX issued stock for the net assets of the Company. The net assets of the Company were stated at historical cost with no goodwill or other intangible assets recorded. The post-acquisition financial statements of the Company ~~had shown~~show the consolidated balances and transactions of the Company and BiomX as well as comparative financial information of BiomX (the acquirer for accounting purposes).

General

~~BiomX is~~We are a clinical ~~stage microbiome product discovery~~ company developing products using both natural and engineered phage technologies designed to target and destroy bacteria that affect the appearance of skin, as well as harmful bacteria in chronic diseases, such as ~~IBD, liver~~inflammatory bowel disease (“IBD”), Cystic Fibrosis (“CF”), Atopic Dermatitis (“AD”), primary sclerosing cholangitis (“PSC”) and ~~cancer.~~colorectal cancer (“CRC”). Bacteriophage or phage are viruses that target bacteria and are considered inert to mammalian cells. By developing proprietary combinations of naturally occurring phage and by creating novel phage using synthetic biology, ~~BiomX develops~~we develop phage-based therapies intended to address large-market and orphan diseases.

Since inception in 2015, ~~BiomX has~~we have devoted substantially all ~~its~~our resources to organizing and staffing ~~its~~the company, raising capital, acquiring rights to or discovering product candidates, developing ~~its~~our technology platforms, securing related intellectual property rights, and conducting discovery, research and development activities for ~~its~~our product candidates. ~~It does~~We do not have any products approved for sale, ~~its~~our products are still in the preclinical and clinical development ~~stage,~~stages, and ~~it has~~we have not generated any revenue from product sales. As ~~BiomX moves its~~we move our product candidates from preclinical to clinical stage ~~it expects its~~and continue with clinical trials, we expect our expenses to increase.

~~Recent Developments~~

In December 2019, a strain of novel coronavirus (now commonly known as COVID-19) was reported to have surfaced in Wuhan, China. COVID-19 has since spread rapidly throughout many countries, and, on MarchOn November 12, 2020, ~~the World Health Organization declared COVID-19~~we announced our new BOLT (“BacteriOphage Lead to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. The Company has implemented recommended measures to safeguard the health and safety of its employees and clinical trial participants, and the continuity of its business operations. As of May 14, 2020, the COVID-19 pandemic has not had a material impact on our results of operation. However, uncertainty remains as to the potential impact of the COVID-19 pandemic on our futureTreatment”) research and development ~~activities. It~~platform. The BOLT platform will enable us to rapidly develop, manufacture and formulate phage therapy candidates targeting particular pathogenic bacteria and incorporates our experience over the past five years with process refinement and implementation of technological advancements. The BOLT platform is ~~not currently possible~~unique, employing cutting edge capabilities across disciplines including computational biology, microbiology, phage synthetic engineering, unique assay development, manufacturing and formulation, to ~~predict how long~~allow agile and efficient development of phage therapies. For a given indication, the ~~pandemic~~platform will ~~last or~~allow for the ~~time that it will take~~completion of a clinical proof of concept study in patients, meaning Phase 2 results, within approximately 12-18 months from project initiation (in certain indications the length of clinical proof of concept may be longer depending on the indication, identity of target bacteria, recruitment rate, cohort size and other factors). The ability to move quickly into clinical development is also driven by the strong safety profile of naturally-occurring phage, as corroborated by regulatory guidance we received from the FDA relating to our IBD program, allowing us to bypass preclinical safety studies and studies in healthy volunteers and to proceed directly to patient studies. The platform allows generation of personalized phage treatments, tailored to target specific bacterial strains in a given patient, allowing us to conduct an initial clinical proof of concept study in patients (Phase 2 results) within approximately 12-18 months of project initiation for ~~economic activity~~many indications, and, in parallel, also the development of an optimized phage therapy candidate with a fixed composition optimized for the treatment of a specific indication for the overall patient population. We are initially implementing the ability to ~~return to prior levels,~~complete a clinical proof of concept study in patients within approximately 12-18 months from project initiation in our cystic fibrosis and we do not yet know the full extent of any impact on our business or our operations. We will continue to monitor the COVID-19 pandemic closely and intend to follow health and safety guidelines as they evolve.

~~Consolidated Results of Operations~~atopic dermatitis programs.

~~Comparison of the Three Months Ended March 31, 2020 and 2019~~

~~The following table summarizes our consolidated results of operations for the three months ended March 31, 2020 and 2019:~~

Three Months ended
March 31,
2020 2019
In thousands
Research and development (“R&D”) expenses, net $ 3,908 $ 2,743
General and administrative expenses 2,058 981
Operating loss 5,966 3,724
Finance expenses income, net (65 ) (499 )
Net Loss $ 5,901 $ 3,225

Research and development expenses were $3,908 for the three months ended March 31, 2020, compared to $2,743 thousand for the three months ended March 31, 2019. The increase of $1,165, or 42%, is primarily due to the manufacturing of BX001 and BX002, the Company’s product candidates for acne-prone skin and IBD, respectively, and due to the BX001 Phase 1 cosmetic clinical study.

General and administrative expenses were $2,058 for the three months ended March 31, 2020, compared to $981 thousand for the three months ended March 31, 2019. The increase of $1,077, or 110%, is primarily due to expenses associated with public company infrastructure.

Clinical ~~Updates~~Developments

On March ~~31st,~~31, 2020 we announced positive ~~topline~~top line results from a ~~the~~ randomized, double-blind, dose-finding, placebo-controlled single center Phase 1 cosmetic clinical study of BX001, a topical gel comprised of a cocktail of naturally-occurring phage targeting Cutibacterium acnes (“C. ~~acnes~~acnes”) to improve the appearance of acne-prone skin in subjects with acne-prone skin. C. acnes are bacteria implicated in the pathophysiology of acne vulgaris. The 75 enrolled individuals with mild-to-moderate acne were randomized into one of three cohorts: a high dose cohort, a low dose cohort, and a placebo cohort (vehicle). The study met its primary endpoint of safety and tolerability for both doses of BX001, as well as a statistically significant (p=0.036) reduction of ~~Cutibacterium~~C. acnes ~~(C. acnes)~~ levels for the high dose of BX001 compared to placebo. ~~C. acnes are bacteria implicated in the pathophysiology of acne vulgaris.~~

BX001 is a topical gel comprised of a cocktail of naturally-occurring phage targeting C. acnes to improve the appearance of acne-prone skin. The Phase 1 cosmetic clinical study was a four-week randomized, double-blind, dose-finding, placebo-controlled single center trial which enrolled 75 individuals with mild-to-moderate acne. Enrolled individuals were randomized into one of three cohorts: a high dose cohort, a low dose cohort, and a placebo cohort (vehicle).

The Phase 2 cosmetic clinical study of BX001 is planned to be a 12-week randomized, double-blind, placebo-controlled trial in 100 individuals with mild-to-moderate acne. Enrolled individuals will be randomized into one of two cohorts: BX001 or placebo (vehicle). ~~Findings from post-hoc analyses of data from~~We plan to initiate the ~~BX001~~ Phase 12 cosmetic clinical study ~~resulted in plans to enrich the subject population for certain characteristics~~of BX001 in the first quarter of 2021 and results are expected in the second quarter of 2021.

On November 3, 2020, the first subject has been dosed in a Phase ~~2 BX001 cosmetic clinical study.~~1a study of BX002, a phage therapy candidate for the treatment of IBD. The therapy targets strains of Klebsiella pneumoniae that cause strong TH1 immune stimulation and colitis in mouse models of disease and are known to be present at a higher prevalence and abundance in IBD patients relative to healthy individuals. The randomized, single-blind, multiple-dose, placebo-controlled study in 18 healthy volunteer subjects is designed to evaluate the safety and tolerability of orally administered BX002 as the primary endpoint, with detection of viable phage in stool as a key exploratory endpoint. The study is being conducted in the U.S. under a novel investigational new drug application approved by the FDA. Results from the study are expected in the first quarter of 2021.

~~BiomX’s~~On November 12, 2020, we announced the consolidation of two phage-therapy programs in IBD and PSC. We now have one improved, broad host range product candidate, BX003, targeting Klebsiella pneumoniae, a potential pathogen implicated in both diseases to be developed for both indications. The consolidation of these programs results in an updated timeline for Phase 1b/2a results with BX003, expected in mid-2022.

On November 12, 2020, we announced initiation of a new phage therapy program in CF addressing chronic respiratory infections caused by Pseudomonas aeruginosa, a main contributor to morbidity and mortality in these patients. Phase 2 results of a proof of concept clinical study evaluating safety and efficacy in patients are expected in the fourth quarter of 2021.

On November 12, 2020, we also announced the initiation of a new program for development of a topically administered phage-based product targeting Staphylococcus aureus, a bacterium linked to the development and exacerbation of inflammation in atopic dermatitis. Phase 2 results of a proof of concept clinical study evaluating safety and efficacy in patients are expected in the first half of 2022.

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. Preclinical results from animal studies evaluating use of phage therapy in combination with checkpoint inhibitors are expected in the second quarter of 2021.

For more information regarding our product candidates, see Part I, Item 1 “Business—Overview of BiomX” of our 2019 Annual Report.

COVID-19

In December 2019, COVID-19 was reported to have surfaced in Wuhan, China and has since spread rapidly throughout many countries, and, on March 12, 2020, the World Health Organization declared COVID-19 a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activities in countries that have had significant outbreaks of COVID-19.

We have implemented recommended measures to safeguard the health and safety of our employees and clinical trial participants, and the continuity of our business operations. As of November 9, 2020, the COVID-19 pandemic has not had a material impact on our results of operation. However, uncertainty remains as to the potential impact of the COVID-19 pandemic on our future research and development activities and during the second quarter of 2020 we updated our guidance on the timing of certain clinical milestones ~~has evolved,~~ partly due to the health and safety precautions ~~we’ve~~we have taken and challenges in clinical trial enrollment due to the COVID-19 pandemic. ~~Results from~~It is not currently possible to predict how long the ~~phase 2 cosmetic clinical study of BX001 are expected in~~pandemic will last or the ~~second quarter of 2021. Results from~~time that it will take for economic activity to return to prior levels, and we do not yet know the ~~first-in-human Phase 1a study of BX002 in IBD are expected in~~full impact on our business and operations. We will continue to monitor the ~~fourth quarter of 2020~~COVID-19 pandemic closely and ~~results from the phase 1b/phase 2a are expected in the second half of 2021. As the PSC program shares the same bacterial target (Klebsiella pneumoniae)~~follow health and safety guidelines as the IBD program, BiomX plans to apply the Phase 1 study results in IBD to inform the PSC program, with the intention of progressing into Phase 2 development in PSC in 2022. Proof of concept in animal models in the colorectal cancer program is expected by the second quarter of 2021.they evolve.

~~Liquidity and Capital Resources~~Consolidated Results of Operations

~~Cash Flows~~Comparison of the Three Months Ended September 30, 2020 and 2019

The following table summarizes our ~~cash flows~~consolidated results of operations for ~~each~~the three months ended September 30, 2020 and 2019:

	Three Months ended September 30,
	2020		2019

	USD in thousands
Research and development (“R&D”) expenses, net		6,436		2,858
General and administrative expenses		2,394		1,797
Operating loss		8,830		4,655
Financial expenses (income), net		5		(395	)
Net Loss		8,835		4,260
Basic and diluted loss per share of Common Stock		0.38		2.69
Weighted average number of shares of Common Stock outstanding, basic and diluted		23,150,253		2,035,625

R&D expenses, net (net of grants received from the Israel Innovation Authority (“IIA”) and consideration from research collaborations) were $6.4 million for the three months ended September 30, 2020, compared to $2.9 million for the three months ended September 30, 2019. The increase of $3.5 million, or 121%, is primarily due to growth in the number of employees which resulted in an increase of salaries and related expenses and due to an increase in depreciation and amortization expenses. The Company did not receive grants from the IIA during the three months ended September 30, 2020 or September 30, 2019.

General and administrative expenses were $2.4 million for the three months ended September 30, 2020, compared to $1.8 million for the three months ended September 30, 2019. The increase of $0.6 million, or 33%, is primarily due to expenses associated with operating as a public company, such as directors’ and officers’ insurance, filing and legal and accounting expenses.

Financial expenses, net were $0.1 million for the three months ended September 30, 2020, compared to financial income, net of $0.4 million for the three months ended September 30, 2019. The increase in financial expenses, net of $0.5 million is primarily due to NIS/USD exchange rate differences and contingent consideration revaluation.

Basic and diluted loss per share of Common Stock was $0.38 for the three months ended September 30, 2020, compared to $2.69 for the three months ended September 30, 2019. The decrease of $2.31, or 86%, is primarily due to the significant increase in the number of our shares of Common Stock as compared to the number of ordinary shares of BiomX Ltd. before the Recapitalization Transaction, which does not take into account BiomX Ltd. preferred shares, partially offset by the substantial increase in net loss.

Comparison of the ~~periods presented:~~Nine Months Ended September 30, 2020 and 2019

The following table summarizes our consolidated results of operations for the nine months ended September 30, 2020 and 2019:

Three Months Ended
March 31,
2020 2019
In thousands
Net cash used in operating activities $ (6,671 ) $ (3,040 )
Net cash used in investing activities (329 ) (192 )
Net cash provided by financing activities 31 1,800
Net increase (decrease) in cash and cash equivalents $ (6,969 ) $ (1,432 )

	Nine Months ended September 30,
	2020			2019

	USD in thousands
Research and development expenses, net		14,441			8,458
General and administrative expenses		6,749			3,987
Operating loss		21,190			12,445
Financial income, net		(248	)		(1,182	)
Net Loss		20,942			11,263
Basic and diluted loss per share of Common Stock		0.91			7.37
Weighted average number of shares of Common Stock outstanding, basic and diluted		23,013,790			2,015,349

R&D expenses, net (net of grants received from IIA and consideration from research collaborations) were $14.4 million for the nine months ended September 30, 2020, compared to $8.4 million for the nine months ended September 30, 2019. The increase of $6.0 million, or 71%, is primarily due to growth in the number of employees which resulted in an increase of salaries and related expenses. In addition, the increase is also due to the manufacturing of BX001 and BX002, the Company’s product candidates for acne-prone skin and IBD, respectively, for clinical trial and testing purposes as well as expenses relating to the BX001 Phase 1 cosmetic clinical study. We received $0.5 million and $0.3 million in grants from the IIA during the nine months ended September 30, 2020 and 2019, respectively.

General and administrative expenses were $6.7 million for the nine months ended September 30, 2020, compared to $4.0 million for the nine months ended September 30, 2019. The increase of $2.7 million, or 68%, is primarily due to salaries and related expenses and due to expenses associated with operating as a public company, such as directors’ and officers’ insurance, filing and legal and accounting expenses.

Financial income, net was $0.3 million for the nine months ended September 30, 2020, compared to $1.2 million for the nine months ended September 30, 2019. The decrease of $0.9 million, or 75%, is primarily due to NIS/USD exchange rate differences.

Basic and diluted loss per share of Common Stock was $0.91 for the nine months ended September 30, 2020, compared to $7.37 for the nine months ended September 30, 2019. The decrease of $6.46, or 88%, is primarily due to the significant increase in the number of our shares of Common Stock as compared to the number of ordinary shares of BiomX Ltd. before the Recapitalization Transaction, which does not take into account BiomX Ltd. preferred shares, partially offset by the substantial increase in net loss.

Liquidity and Capital Resources

Cash Flows

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2020 and 2019:

	Nine Months Ended September 30,
	2020			2019

	USD in thousands
Net cash used in operating activities		(17,325	)		(10,503	)
Net cash provided by (used in) investing activities		(1,049	)		11,631
Net cash provided by financing activities		121			1,843
Net increase (decrease) in cash and cash equivalents		(18,253	)		2,971

Operating Activities

Net cash used in operating activities for the ~~three~~nine months ended ~~March 31,~~September 30, 2020 was $17.3 million and included our net loss of ~~$5.9~~$20.9 million, mostly due to our R&D and general and administrative expenses. Net changes in our operating activities for the nine months ended September 30, 2020 consisted primarily of depreciation and amortization in the amount of $1.6 million and share-based compensation in the amount of $2.1 million, partially offset by a decrease in accounts payable in the amount of $1.9 million.

Net cash used in operating activities for the nine months ended September 30, 2019 was $10.5 million. Net changes in our operating assets and liabilities for the ~~three~~nine months ended ~~March 31, 2020 consisted primarily of decrease in trade account payables of $1.8 million.~~

~~Net cash used in operating activities for the three months ended March 31, 2019 was $3.0 million. Net changes in our operating assets and liabilities for the three months ended March 31,~~September 30, 2019 consisted primarily of ~~$ 3.2~~$11.3 million net ~~loss.~~loss, mostly due to our R&D and general and administrative expenses, partially offset by $0.9 million in share-based compensation.

Investing Activities

During the ~~three~~nine months ended ~~March 31,~~September 30, 2020, net cash used in investing activities was $1.0 million, mainly as a result of an increase in bank deposits and purchases of property and equipment.

During the nine months ended September 30, 2019, net cash provided by investing activities was ~~$0.3~~$11.7 million, mainly as a result of ~~purchasing property~~a decrease in short-term bank deposits.

We have invested, and ~~equipment.~~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 recognize gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses, net. As of September 30, 2020, we had outstanding foreign exchange contracts in the amount of approximately $3.5 million. As of September 30, 2019, we had no outstanding foreign exchange contracts.

Financing Activities

During the ~~three~~nine months ended ~~March 31, 2019, net cash used in investing activities was $0.2 million, mainly as a result of purchase of property and equipment.~~

~~Financing Activities~~

~~During the three months ended March 31,~~September 30, 2020 net cash provided by financing activities was ~~$0.03~~$0.1 million, ~~consisting~~mainly as a result of exercise of stock options ~~and~~of $0.2 million, partially offset by outflows in connection with ~~current assets and liabilities acquired in reverse recapitalization.~~the Recapitalization Transaction of $0.1 million.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2019, net cash provided by financing activities was $1.8 million, as a result of the issuance of preferred shares, net of ~~issuance costs.~~expenses.

Outlook

We have accumulated a deficit of $63.1 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, our liquidity resources as of September 30, 2020, which consisted primarily of cash, cash equivalents and restricted cash of approximately $54 million and short-term deposits of approximately $10 million, will be sufficient to fund our operations into at least the second quarter of fiscal year 2022.

Consistent with our continuing 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 equity securities, debt and possibly additional grants from the Israel Innovation Authority 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 the Company.

Off-Balance Sheet Arrangements

As of ~~March 31,~~September 30, 2020, we did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and ~~judgments that affect~~net income, as well as on the ~~reported amounts~~value of ~~assets, liabilities, revenue, costs and expenses, and the disclosure of contingent~~certain assets and liabilities inon our ~~financial statements.~~condensed consolidated balance sheets. We base our assumptions, judgments and estimates on historical experience ~~known trends and events~~ and various other factors that we believe ~~are~~to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.

Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of November 9, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.

Our actual results may differ from these estimates under different assumptions or conditions. Part II, Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2019 Annual Report includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenue, costs and expenses, or the disclosure of contingent assets and liabilities in our condensed consolidated financial statements during the ~~three~~nine months ended ~~March 31,~~September 30, 2020.

~~Recently Issued Accounting Pronouncements~~

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements.

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

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures 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.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial ~~and accounting~~ officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures during the period covered by this Quarterly Report, 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 ~~that~~ our disclosure controls and procedures were effective as of ~~March 31,~~September 30, 2020.

Changes in Internal Control over Financial Reporting

~~Management did not~~Except as described below, there have ~~sufficient time following the Business Combination to complete a comprehensive assessment of~~been no changes in our internal control over financial reporting ~~for~~that occurred during the ~~year ended December 31, 2019. In making~~fiscal quarter to which this ~~determination, we considered~~report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Following the ~~effects of the Business Combination, which is treated as a “reverse merger” in accordance with GAAP and after which, substantially all of the business of the Company was that of BiomX. Management~~Recapitalization Transaction, management has begun to take steps to strengthen the Company’s internal control over financial reporting, including during the quarter ended September 30, 2020, including the hiring of experienced accounting and finance staff and adopting new policies and procedures, and intends to take additional steps during the ~~2020 fiscal year. Management intends to complete its assessment for inclusion in our 2020 Annual Report.~~remainder of 2020.

PART II - OTHER INFORMATION

~~Item 1. Legal Proceedings.~~

We may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding, investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business, financial condition or results of operations.

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, 2019, 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, 2019, filed with the SEC on March 26, 2020, except as noted below.

The COVID-19 pandemic may adversely affect our business, including our clinical trials.

In December 2019, a novel strain of coronavirus, COVID-19, was identified in Wuhan, China. This virus was declared a pandemic by the World Health Organization in March 2020 and continues to spread globally, including the United States and Israel. The outbreak and government measures taken in response have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. In response to the spread of COVID-19, we temporarily closed our executive offices with our administrative employees continuing their work outside of our offices. In addition, we have modified our business practices, including restricting employee travel, developing social distancing plans for our employees and cancelling physical participation in meetings, events and conferences. As a result of the COVID-19 pandemic, we have experienced and may continue to experience additional disruptions that could severely impact our business, preclinical studies and clinical trials, including:

●

delays or difficulties in enrolling patients in our clinical trials;

●

delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff;

●

diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;

●

interruption of key clinical trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state governments, in the U.S. and the government in Israel, employers and others or interruption of clinical trial subject visits and study procedures (such as endoscopies that are deemed non-essential), which may impact the integrity of subject data and clinical study endpoints;

●

interruption or delays in the operations of the FDA or other regulatory authorities, which may impact review and approval timelines;

●

interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems;

●

limitations on employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; and

●

interruptions or delays to our sourced discovery and clinical activities.

The outbreak and the resulting government actions may adversely impact our planned and ongoing clinical trials. Clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff, and patient enrollment may be delayed due to prioritization of hospital resources toward the COVID-19 pandemic. Some patients may not be willing and/or able to comply with clinical trial protocols due to the COVID-19 pandemic, particularly if quarantines impede patient movement or interrupt healthcare services. Similarly, our ability to recruit and retain patients and principal ~~risks~~investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 may be impeded, which would adversely impact our clinical trial operations. The diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns, including the attention of physicians serving as our clinical trial investigators and hospitals serving as our clinical trial sites, may significantly disrupt our research activities. As a result, the expected timeline for data readouts of our clinical trials and certain regulatory filings will likely be negatively impacted, which would adversely affect and delay our ability to obtain regulatory approvals for our product candidates, increase our operating expenses and have a material adverse effect on our financial condition.

Furthermore, the response to the COVID-19 pandemic may redirect resources with respect to regulatory matters and intellectual property matters in a way that would adversely impact our ability to progress regulatory approvals and protect our intellectual property. In addition, we ~~believe~~may face impediments to regulatory meetings and approvals due to measures intended to limit in-person interactions. For example, the FDA postponed most inspections of foreign manufacturing facilities and products and postponed routine surveillance inspections of domestic manufacturing facilities. Comparable regulatory authorities in other jurisdictions may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and provide guidance regarding the conduct of clinical trials. If global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

The COVID-19 pandemic continues to rapidly evolve. The extent to which the outbreak impacts our business, preclinical studies and clinical trials will depend on future developments, which are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States Canada, Europe, Israel and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States, Canada, Europe, Israel and other countries to contain and treat the disease. As a result, the COVID-19 pandemic could have a material toadverse effect on our business, results of operations, ~~and~~ financial condition ~~from those disclosed~~and prospects and heighten many of our known risks described or referenced in ~~Part I, Item 1A—“Risk~~this “Risk Factors” ~~of the 2019 Annual Report.~~section.

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.~~

~~None.~~

~~Item 3. Defaults Upon Senior Securities.~~

~~None.~~

~~Item 4. Mine Safety Disclosures.~~

~~Not Applicable.~~

~~Item 5. Other Information.~~

~~None.~~

Item 6. Exhibits

~~The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.~~

No.		Description of Exhibit
3.1		~~Certificate~~Composite Copy of ~~Amendment of~~Amended and Restated Certificate of Incorporation of the Company, effective on ~~October 28, 2019~~
~~10.1~~		~~Form of Non-Qualified Stock Option Agreement (U.S. Awards~~December 11, 2018, as amended to ~~Non-Executives)~~date. (Incorporated by reference to Exhibit ~~10.19~~3.1 to the registrant’s ~~Annual~~Quarterly Report on Form ~~10-K~~10-Q filed by the registrant on ~~March 26,~~August 13, 2020)
~~10.2~~
3.2		~~Form~~Amended and Restated Bylaws of ~~Non-Qualified Stock Option Agreement (U.S. Awards to Executive Officers)~~the Company, effective as of October 28, 2019 (Incorporated by reference to Exhibit ~~10.20~~3.3 to the registrant’s ~~Annual~~Current Report on Form ~~10-K~~8-K filed by the registrant on ~~March 26, 2020)~~November 1, 2019)
~~10.3~~		~~Form of Option Agreement (Israeli Awards) (Incorporated by reference to Exhibit 10.21 to the registrant’s Annual Report on Form 10-K filed by the registrant on March 26, 2020)~~
~~31.1~~10.1*		Form of Indemnification Agreement

31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a)~~, promulgated under the Securities and Exchange Act of 1934, as amended~~
~~31.2~~
31.2*		Certification of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a)~~, promulgated under the Securities and Exchange Act of 1934, as amended~~
32
32**		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350

101*		The following materials from our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements, tagged as ~~adopted pursuant to Section 906~~blocks of ~~the Sarbanes-Oxley Act of 2002~~text and in detail.

*	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: ~~May 14,~~November 12, 2020	By:	/s/ Jonathan Solomon
	Name:	Jonathan Solomon
	Title:	Chief Executive Officer
		(Principal Executive Officer)


Date: ~~May 14,~~November 12, 2020	By:	/s/ Marina Wolfson
	Name:	Marina Wolfson
	Title:	Senior Vice President of Finance and Operations
		(Principal Financial Officer and Principal Accounting Officer)

2731

7 Pinhas Sapir St., Floor 2, Ness Ziona, Israel		7414002
(Address of principal executive offices)		(Zip Code)

	Page
Part I. Financial Information	1
Item 1. Financial Statements	1
Condensed Consolidated Balance Sheets (unaudited)	2
Condensed Consolidated Statements of Operations (unaudited)	4
Condensed Consolidated Statements of Changes in Shareholders’ Equity (unaudited)	5
Condensed Consolidated Statements of Cash Flows (unaudited)	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2223
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2527
Item 4. Controls and Procedures	2527

Part II. Other Information	26
~~Item 1. Legal Proceedings~~	2628
Item 1A. Risk Factors	26
~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~	26
~~Item 3. Defaults Upon Senior Securities~~	26
~~Item 4. Mine Safety Disclosures~~	26
~~Item 5. Other Information~~	2628
Item 6. Exhibits	2630

~~Part III.~~ Signatures	2731

	Page

~~Interim~~Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2020 and December 31, 2019 (unaudited)	~~F-2-F-3~~2

~~Interim~~Condensed Consolidated Statements of Operations for the Three and Nine Months Ended ~~March 31,~~September 30, 2020 and 2019 (unaudited)	~~F-4~~4

~~Interim~~Condensed Consolidated Statements of Change in Shareholders’ Equity for the ~~period ended March 31,~~Three and Nine Months Ended September 30, 2020 and ~~March 31,~~ 2019 (unaudited)	~~F-5-F-6~~5

~~Interim~~Condensed Consolidated Statements of Cash Flows for the ~~three~~Nine Months Ended ~~March 31,~~September 30, 2020 and 2019 (unaudited)	~~F-7~~7

Notes to ~~Interim~~Condensed Consolidated Financial Statements	~~F-8-F-21~~8

		As of					As of
	Note	March 31, 2020		December 31, 2019		Note	September 30, 2020		December 31, 2019
ASSETS

Current assets

Cash and cash equivalents			65,292		72,256			53,302		72,256
Restricted cash			149		154			855		154
Short-term deposits	3		10,052		10,003	3		10,390		10,003
Related parties	9		-		50
Related party						9		-		50
Other current assets			1,680		2,068			755		2,068
Total current assets			77,173		84,531			65,302		84,531

Non-current assets
Lease deposit			5		5			-		5
Property and equipment, net			2,039		1,881			2,062		1,881
In-process research and development (“R&D”)	6		4,177		4,556
Operating lease right-of-use asset	4		1,066		1,148
In-process research and development (“R&D”), net						6		3,419		4,556
Operating lease right-of-use assets						4		4,370		1,148
Total non-current assets			7,287		7,590			9,851		7,590

			84,460		92,121			75,153		92,121

		As of								As of
	Note	March 31, 2020			December 31, 2019			Note		September 30, 2020			December 31, 2019

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities
Trade account payables			1,340			3,253					1,301			3,253
Other account payables			2,380			2,596					2,814			2,596
Current portion of lease liabilities	4		361			375			4		594			375
Total current liabilities			4,081			6,224					4,709			6,224

Non-current liabilities
Lease liabilities – net of current portion	4		740			856
Lease liabilities, net of current portion									4		3,905			856
Contingent liabilities	5		641			585			5,7		701			585
Total non-current liabilities			1,381			1,441					4,606			1,441

Commitments and Contingent Liabilities	7								7

Shareholders’ equity
	8
Common stock, $0.0001 par value (“Ordinary Shares”); Authorized -60,000,000 shares as of March 31, 2020 and December 31, 2019. Issued - 22,925,860 as of March 31, 2020 and December 31, 2019. Outstanding - 22,920,160 shares as of March 31, 2020 and 22,862,835 as of December 31, 2019.			2			2

Common stock, $0.0001 par value (“Common Stock”); Authorized - 60,000,000 shares as of September 30, 2020 and December 31, 2019. Issued - 23,173,378 as of September 30, 2020 and 22,862,835 as of December 31, 2019. Outstanding - 23,167,678 shares as of September 30, 2020 and 22,862,835 as of December 31, 2019									8		2			2
Additional paid in capital			127,069			126,626					128,950			126,626
Accumulated deficit			(48,073	)		(42,172	)				(63,114	)		(42,172	)
Total shareholders’ equity			78,998			84,456					65,838			84,456

			84,460			92,121					75,153			92,121

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 share of common stock	PHGE.U	NYSE American
Common stock, $0.0001 par value, included as part of the units	PHGE	NYSE American
Warrants included as part of the units	PHGE.WS	NYSE American

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

	●	our limited operating history;

	●	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;

	●	the impact of the COVID-19 pandemic on general economic conditions, our operations, the continuity of our business, including our preclinical and clinical trials and our ability to raise additional capital;

	●	the U.S. Food and Drug Administration’s (“FDA”) classification of our BX001 product candidate for acne-prone skin as a drug or cosmetic and the impact of changing regulatory requirements on our ability to develop and commercialize BX001;

	●	obtaining FDA acceptance of any non-U.S. clinical trials of product candidates;

	●	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;

	●	the ability of our product candidates to demonstrate requisite safety and tolerability for cosmetics, 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;

	●	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 health care 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 manage the growth of the business;

	●	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;

	●	potential security breaches, including cybersecurity incidents;

	●	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, 2019 (the “2019 Annual Report”).

	Common Stock					Additional paid		Accumulated			Total shareholders’
	Shares		Amount			in capital		deficit			equity
Balance as of December 31, 2019		22,862,835		2			126,626		(42,172	)		84,456

Exercise of options		57,325		(*	)		106		-			106
Share-based payment		-		-			337		-			337
Net loss		-		-			-		(5,901	)		(5,901	)

Balance as of March 31, 2020		22,920,160		2			127,069		(48,073	)		78,998
Exercise of options		220,104		(*	)		52		-			52
Share-based payment		-		-			677		-			677
Net loss		-		-			-		(6,206	)		(6,206	)

Balance as of June 30, 2020		23,140,264		2			127,798		(54,279	)		73,521
Exercise of options		27,414		-			38		-			38
Share-based payment		-		-			1,114		-			1,114
Net loss		-		-			-		(8,835	)		(8,835	)

Balance as of September 30, 2020		23,167,678		2			128,950		(63,114	)		65,838

	Common Stock					Additional paid in		Accumulated			Total shareholders’
	Shares		Amount			Capital		deficit			equity

Balance as of December 31, 2019	22,862,835		2			126,626		(42,172)			84,456

Exercise of options		57,325			*		106					106
Share-based payment							337					337
Net loss									(5,901	)		(5,901	)

Balance as of March 31, 2020		22,920,160		2			127,069		(48,073	)		78,998

	Common Stock					Preferred A Shares (pre-merger- BiomX Ltd.)				Preferred B Shares (pre-merger- BiomX Ltd.)					Additional paid in		Accumulated			Total shareholders’
	Shares (**)		Amount			Shares (**)		Amount		Shares (**)		Amount			capital		deficit			equity

Balance as of December 31, 2018		2,307,871		(*	)		7,543,831		1		5,170,357		1			64,410		(21,609	)		42,803

Issuance of shares		-		-			-		-		308,628		(*	)		1,800		-			1,800
Share-based payment		-		-			-		-		-		-			304		-			304
Net loss		-		-			-		-		-		-			-		(3,225	)		(3,225	)

Balance as of March 31, 2019		2,307,871		(*	)		7,543,831		1		5,478,985		1			66,514		(24,834	)		41,682

Share-based payment		-		-			-		-		-		-			327		-			327
Net loss		-		-			-		-		-		-			-		(3,778	)		(3,778	)

Balance as of June 30, 2019		2,307,871		(*	)		7,543,831		1		5,478,985		1			66,841		(28,612	)		38,231

Share-based payment		-		-			-		-		-		-			249		-			249
Exercise of options		41,200		(*	)		-		-		-		-			43		-			43
Net loss		-		-			-		-		-		-			-		(4,260	)		(4,260	)
Balance as of September 30, 2019		2,349,071		(*	)		7,543,831		1		5,478,985		1			67,133		(32,872	)		34,263

	Common Stock					Preferred A Shares (pre-merger- BiomX Ltd.)				Preferred B Shares (pre-merger- BiomX Ltd.)					Additional paid in		Accumulated			Total shareholders’
	Shares (**)		Amount			Shares (**)		Amount		Shares (**)		Amount			Capital		deficit			equity

Balance as of December 31, 2018		2,307,871		(*	)		7,543,831		1		5,170,357		1			64,410		(21,609	)		42,803

Issuance of shares		-		-			-		-		308,628		(*	)		1,800		-			1,800
Share-based payment		-		-			-		-		-		-			304		-			304
Net loss		-		-			-		-		-		-			-		(3,225	)		(3,225	)

Balance as of March 31, 2019		2,307,871		(*	)		7,543,831		1		5,478,985		1			66,514		(24,834	)		41,682

	For the three months ended March 31,
	2020			2019

CASH FLOWS – OPERATING ACTIVITIES
Net loss		(5,901	)		(3,225	)

Adjustments required to reconcile cash flows used in operating activities:
Depreciation and amortization		501			53
Share-based compensation		337			304
Revaluation of contingent liabilities		56			6

Changes in operating assets and liabilities:
Other receivables		388			(107	)
Trade account payables		(1,838	)		167
Other account payables		(216	)		(214	)
Operating lease liabilities		(48	)
Related parties		50			(24	)
Net cash used in operating activities		(6,671	)		(3,040	)

CASH FLOWS – INVESTING ACTIVITIES
Decrease in short-term deposit		(49	)		(55	)
Purchase of property and equipment		(280	)		(137	)
Net cash used in investing activities		(329	)		(192	)

CASH FLOWS – FINANCING ACTIVITIES
Issuance of preferred shares, net of issuance costs		-			1,800
Outflows in connection with current assets and liabilities acquired in reverse recapitalization		(75	)		-
Exercise of stock options		106			-
Net cash provided by financing activities		31			1,800

Decrease in cash and cash equivalents and restricted cash		(6,969	)		(1,432	)

Cash and cash equivalents and restricted cash at the beginning of the period		72,410			8,693

Cash and cash equivalents and restricted cash at the end of the Period		65,441			7,261

Supplemental non-cash transactions:
Recognition of right-of-use asset and lease liability upon adoption of ASU 2016-02		-			662

	For the nine months ended September 30,
	2020			2019

CASH FLOWS – OPERATING ACTIVITIES
Net loss		(20,942	)		(11,263	)

Adjustments required to reconcile cash flows used in operating activities
Depreciation and amortization		1,618			259
Share-based compensation		2,128			880
Revaluation of contingent liabilities		116			20

Changes in operating assets and liabilities:
Other receivables		1,318			21
Trade account payables		(1,877	)		(119	)
Other account payables		218			(151	)
Operating lease liabilities		46			-
Related party		50			(150	)
Net cash used in operating activities		(17,325	)		(10,503	)

CASH FLOWS – INVESTING ACTIVITIES
Decrease (Increase) in short-term deposits		(387	)		12,618
Purchase of property and equipment		(662	)		(987	)
Net cash provided by (used in) investing activities		(1,049	)		11,631

CASH FLOWS – FINANCING ACTIVITIES
Issuance of preferred shares, net		-			1,800
Outflows in connection with current assets and liabilities acquired in Recapitalization Transaction		(75	)		-
Exercise of stock options		196			43
Net cash provided by financing activities		121			1,843

Increase (decrease) in cash and cash equivalents and restricted cash		(18,253	)		2,971

Cash and cash equivalents and restricted cash at the beginning of the period		72,410			8,693

Cash and cash equivalents and restricted cash at the end of the period		54,157			11,664

Supplemental non-cash transactions:
Recognition of right-of-use asset and lease liability upon adoption of ASU 2016-02		-			645
Assets acquired under operating leases		3,551			599

	September 30, 2020
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds		30,000		-		-		30,000
		30,000		-		-		30,000
Liabilities:
Contingent liabilities		-		-		701		701
		-		-		701		701

	December 31, 2019
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market funds		-		-		-		-
		-		-		-		-
Liabilities:
Contingent liabilities		-		-		585		585
		-		-		585		585

		~~Three months~~ ~~ended March 31, 2020~~
~~Cash payments for operating leases~~			88

		Three months ended September 30, 2020		Nine months ended September 30, 2020
Cash payments for operating leases		90		268

	Operating Leases			Operating Leases
Remainder of 2020	$	275		$	95
2021	$	367		$	651
2022	$	262		$	580
2023	$	138		$	580
2024	$	95		$	580
2025				$	580
2026				$	580
2027				$	580
2028				$	580
2029				$	580
2030				$	532
Total future lease payments	$	1,137		$	5,918
Less imputed interest	$	(36	)		(1,419	)
Total lease liability balance	$	1,101		$	4,499

	Contingent consideration

As of December 31, 2019		585
~~Change in fair value~~Revaluation of contingent consideration		56116
As of ~~March 31,~~September 30, 2020		~~641~~701

	Contingent consideration

As of December 31, 2018		889
~~Change in fair value~~Revaluation of contingent consideration		620
As of ~~March 31,~~September 30, 2019		~~895~~909