Tessera Defense & Homeland Security Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024. Based on the aforementioned evaluation, our management has concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting has been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting on December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework, in Internal Control—Integrated Framework . Based on that assessment under those criteria, management has determined that, as of December 31, 2024, our internal control over financial reporting was effective. We are exempt from this requirement to provide an attestation report of our independent registered public accounting firm regarding internal control over financial reporting due to our status under the Exchange Act as a non-accelerated filer as of the current time. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of fiscal year 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION Grant of Bonuses On March 24, 2025, the Board approved the payment of bonuses, payable in cash in amounts that equals to three-month salary for each of our Chief Executive Officer, Chief Financial Officer and Chief Development Officer, in the amounts of $102,000, $55,000 and $64,000, respectively. Upon payment of the bonuses, the non-statutory severance period for each of such officers, as agreed with the Company, will be shortened by three months. Trading Arrangements During the three months ended December 31, 2024, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(a) of Regulation S-K . ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICITIONS THAT PREVENT INSPECTIONS Not applicable. 86 part III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Set forth below are the names, ages and positions of each of the individuals who serve as our executive officers and member of the Board, as of March 25, 2025. Name Age Position Executive Officers Jonathan Solomon 48 Chief Executive Officer and Director Marina Wolfson 41 Chief Financial Officer Dr. Merav Bassan 59 Chief Development Officer Non-Employee Directors Dr. Russell Greig(1)(2)(3) 72 Director and Chairman of the Board of Directors Susan Blum(1) 53 Director Dr. Jesse Goodman(3) 73 Director Jonathan Leff(2) 56 Director Gregory Merril (3) 59 Director Dr. Alan Moses(2) 75 Director Edward Williams(1) 68 Director (1) Member of the audit committee (2) Member of the compensation committee (3) Member of the nominating and corporate governance committee Executive Officers Jonathan Solomon has served as the Chief Executive Officer and as a director of the Company since October 2019. Mr. Solomon served as Board member of BiomX Ltd., or BiomX Israel, from February 2016 and also as Chief Executive Officer from February 2017 to October 2019. From July 2007 to December 2015, Mr. Solomon was a co-founder, President, and Chief Executive Officer of ProClara Biosciences Inc. (formerly NeuroPhage Pharmaceuticals Inc.), a biotechnology company pioneering an approach to treating neurodegenerative diseases. Prior to joining ProClara, he served for ten years in a classified military unit of the Israeli Defense Forces. Mr. Solomon holds B.Sc. magna cum laude in Physics and Mathematics from the Hebrew University, an M.Sc. summa cum laude in Electrical Engineering from Tel Aviv University, and an MBA with honors from the Harvard Business School. We believe that Mr. Solomon’s qualifications to sit on our Board include his extensive board and management experience in the biotech industry. Marina Wolfson has served as the Chief Financial Officer of the Company since April 2022. Ms. Wolfson served in several finance and operations roles in the Company from December 2019 to March 2022. Ms. Wolfson’s experience includes working with large pharmaceutical and hi-tech companies, as well as venture capital funds. Prior to joining the Company, Ms. Wolfson worked as Vice President of Finance at BioView Ltd. (TASE:BIOV) from 2010 to 2019 and a senior auditor at Ernst & Young, from 2007 to 2010. Ms. Wolfson is a certified public accountant in Israel and holds a B.A in Economics and Accounting (with honors) and an MBA (with honors, specializing in finance) from Ben-Gurion University. 87 Dr. Merav Bassan has served as the Chief Development Officer of the Company since October 2019. Prior to this position, she served in various development roles at Teva Pharmaceutical Industries Limited between 2005 and 2019, including Vice President, Head of Translational Sciences, Specialty Clinical Development R&D from 2017 to 2019, Vice President, Pain and Global Internal Medicine, Project Leadership, Innovative Product Development, Global IR&D from 2015 to 2017, and Project Champion, Senior Director, Innovative Product Development, Global IR&D from 2009 to 2015. Dr. Bassan holds a B.Sc. in Biology, a M.Sc. in Human Genetics and a Ph.D. in Neurobiology from Tel Aviv University, and she completed a Post-Doctoral Fellowship in Neuroscience at Harvard Medical School at Harvard University. Directors The biography of Mr. Solomon is set forth above under the header “Executive Officers.” The biographies of our non-employee directors are set forth below: Dr. Russell Greig has served as a director and chairman of the Board of the Company since October 2019. Dr. Greig has more than 44 years of experience in the pharmaceutical industry, with knowledge and expertise in research and development, business development and commercial operations. He spent the majority of his career at GlaxoSmithKline, or GSK, where he held a number of positions including GSK’s President of Pharmaceuticals International from 2003 to 2008 and Senior Vice President Worldwide Business Development. From 2008 to 2010, Dr. Greig was also President of SR One, GSK’s corporate venture group. He is currently Chairman of, Nucleome Therapeutics (UK) and BiomX (NYSE). In addition, Dr. Greig previously served on the boards of Sanifit (Spain) (acquired by Vifor Pharma AG (SWX: VIFN), Tigenix N.V. (acquired by Takeda Pharmaceutical Company Limited), Ablynx N.V. (acquired by Sanofi, France) and Merus N.V. (Nasdaq: MRUS). He was previously Chairman of Syntaxin Ltd (UK) (acquired by Ipsen), Novagali Pharma S.A. (France) (acquired by Santen Pharmaceutical Co., Ltd.), and Isconova AB (Sweden) (acquired by Novavax, Inc. (Nasdaq: NVAX). He served as acting Chief Executive Officer at Genocea Biosciences (Nasdaq: GNCA) and Isconova AB for an interim period. He was also a member of the Scottish Scientific Advisory Committee, reporting to the First Minister of Scotland. We believe that Dr. Greig’s qualifications to sit on our Board include his extensive board and leadership experience in business development and in drug research and development in the pharmaceutical industry. Susan Blum has served as a director of the Company since April 2024. Ms. Blum is the Chief Financial Officer of Melinta Therapeutics, LLC, or Melinta, a company focused on the development and commercialization of innovative therapies for acute and life-threatening illnesses. Ms. Blum joined Melinta in 2016 as the company’s Controller, and then served as Vice President of Finance & Chief Accounting Officer prior to being appointed to the Chief Financial Officer position in 2021. Prior to joining Melinta, Ms. Blum served as Corporate Controller at Textura Corporation from 2013 to 2016, supporting the company’s IPO and transformation into a publicly-traded organization. Ms. Blum also served in leadership roles at Orbitz Worldwide, Inc. (NYSE: OWW) from 2011 to 2013 and at Facet Biotech Corporation and PDL BioPharma, Inc. (Nasdaq: PDLI) from 2004 to 2010, where she was responsible for such functions as external reporting and related compliance, technical accounting and internal controls over financial reporting. Ms. Blum began her career in public accounting at Ernst & Young, where she spent nearly seven years working with a diverse client base ranging from large, public international engagements to development-stage enterprises. Ms. Blum is a Certified Public Accountant, currently serves as a member of the BioNJ Cybersecurity Committee and holds a B.S. in Business Commerce from Santa Clara University. We believe that Ms. Blum’s qualifications to sit on our Board include her executive leadership in both finance and accounting within the life sciences sector, and will provide our company with significant expertise. 88 Dr. Jesse Goodman has served as a director of the Company since March 2024. Dr. Goodman has been the director of the Center on Medical Product Access, Safety and Stewardship, and professor of medicine and attending physician in infectious diseases, at Georgetown University since March 2014. Dr. Goodman also is an infectious disease physician at the Washington DC Veterans Affairs and Walter Reed Medical Centers. He serves on the board of directors of GlaxoSmithKline plc, a multinational pharmaceutical company, which he joined in 2016, and chaired that board’s science committee until early 2023, and he has served on the board of directors of Intellia Therapeutics, Inc., a publicly traded biotechnology company, since October 2018. Prior to the Merger Agreement, Dr. Goodman served on the board of directors of APT. He also has served as a president (2015 to 2020) and member (2015 to present) of the board of trustees of the United States Pharmacopeia Convention, Inc. From 2009 until February 2014, Dr. Goodman served as the chief scientist of the FDA. Dr. Goodman also served as deputy commissioner for science and public health at the FDA from 2009 through 2012. Prior to that, Dr. Goodman was the director of the FDA’s Center for Biologics Evaluation and Research from 2003 to 2009 and a senior advisor to the FDA commissioner from 1998 through 2000. Prior to his government service, Dr. Goodman was professor of medicine and chief of infectious diseases at the University of Minnesota. Dr. Goodman has served on numerous advisory boards and committees for national and international health care organizations, including the CDC, the National Institute of Health, the World Health Organization and the Coalition on Epidemic Preparedness Innovations. Dr. Goodman received a B.S. in biology from Harvard College, a master’s in public health from the University of Minnesota and an M.D. from the Albert Einstein College of Medicine, and did his residency and fellowship training in medicine, infectious diseases and oncology at the Hospital of the University of Pennsylvania and at the University of California in Los Angeles, where he was also chief medical resident. He has been elected to the Institute of Medicine of the National Academy of Sciences. We believe that Dr. Goodman’s qualifications to sit on our Board include his extensive board and leadership experience in clinical development in the pharmaceutical industry and regulation. Jonathan Leff has served as a director of the Company since March 2024. Mr. Leff is a Partner at Deerfield Management Company, L.P., or Deerfield and Chairman of the Deerfield Institute. He joined Deerfield in 2013 and focuses on venture capital and structured investments in biotechnology and pharmaceuticals. Prior thereto, Mr. Leff served as Managing Director at Warburg Pincus LLC from 2000 to 2012, where he led the firm’s investment efforts in biotechnology and pharmaceuticals. Mr. Leff also previously served as a member of the Executive Committee of the Board of the National Venture Capital Association, or NVCA, and led NVCA’s life sciences industry efforts as Chair of NVCA’s Medical Innovation and Competitiveness Coalition. He also served on the Emerging Companies Section Board of the Biotechnology Industry Organization. Mr. Leff is involved in the governance of several not-for-profit organizations, including serving as a member of the board of directors of the Spinal Muscular Atrophy Foundation and sitting on the Columbia University Medical Center Board of Advisors. He currently serves on the board of directors of Larimar Therapeutics, Inc., a publicly traded biotechnology company. Mr. Leff also previously served on the boards of several other publicly traded biotechnology and pharmaceutical companies, including ARS Pharmaceuticals, Inc., from 2022 to 2023, Proteon Therapeutics, Inc. from 2017 to 2019, AveXis, Inc. from 2014 to 2017 and Nivalis Therapeutics, Inc. from 2014 to 2016. He currently serves on the boards of several private biopharmaceutical companies and has previously served on the boards of other privately held biopharmaceutical companies. Mr. Leff received his A.B. from Harvard University, MBA from the Stanford University Graduate School of Business and M.S. in Biotechnology from Johns Hopkins University. We believe that Mr. Leff’s qualifications to sit on our Board include his extensive board and leadership experience in capital markets and the pharmaceutical and biotech industries. 89 Gregory Merril has served as a director of the Company since March 2024. Mr. Merril founded APT in October 2016, and served as its Chief Executive Officer until October 2023 and served on its board of directors until March 2024. Currently, he lends his expertise to various startups, serving in capacities ranging from advisor to executive director. Mr. Merril served as Chief Executive Officer of Yost Labs, a developer of inertial motion sensors used in fields such as physical rehabilitation and drone navigation, from August 2015 to December 2017. Between 2011 and August 2015, he founded and led Brain Sentry, a company dedicated to developing wearable sensors to detect head impacts risking traumatic brain injury in sports including football, hockey, and lacrosse. From October 2009 to February 2011, he served as chief operating officer of Decision Technologies, which supported the U.S. Navy and the Missile Defense Agency with technology acquisitions and deployments. Earlier, as the founding chief executive officer and chair of Interaction Laboratories from March 2002 to October 2009, Merril worked on patents and products that enhanced physical activity in video games and military simulations. Before this, he was the founding Chief Executive Officer of HT Medical Systems, a company focusing on surgical training simulators, which merged with Immersion Corp (NASDAQ: IMMR) in July 2000. Mr. Merril is credited as inventor with 22 issued patents and holds a B.A. in psychobiology from McDaniel College. We believe that Mr. Merril’s qualifications to sit on our Board include his experience in drug research and development in the pharmaceutical industry. Dr. Alan Moses has served as a director of the Company since October 2020. Dr. Moses has been a Board member of Chemomab Therapeutics, Ltd. (Nasdaq: CMMB) since March 2021. Dr. Moses served as the Global Chief Medical Officer of Novo Nordisk A/S from 2013 until his retirement in 2018. Prior to that he served in various roles at Novo Nordisk A/S since 2004, beginning as Associate Vice President of Medical Affairs in the United States. Throughout his career, Dr. Moses has specialized in developing novel therapeutics and diagnostics for diabetes mellitus. He co-founded and directed the Clinical Investigator Training Program at Beth Israel Deaconess-Harvard Medical School-MIT. From 1998 to 2004, Dr. Moses served as Senior Vice President and Chief Medical Officer of the Joslin Diabetes Center with specific responsibility for the Joslin Clinic. He now serves as a member of the Board of Joslin Diabetes Center since December 2021. He also serves as Chairman of the Board of the nonprofit diaTribe Foundation and is a member of the Board of the Greater New England Chapter of the Juvenile Diabetes Research Foundation. Dr. Moses earned his MD from the Washington University School of Medicine in St. Louis, worked for three years at the National Institutes of Health, completed his clinical endocrine/diabetes training at Tufts New England Medical Center, and studied Health Care Strategy at Harvard Business School. We believe that Dr. Moses’s qualifications to sit on our Board include his extensive leadership experience in clinical development in the pharmaceutical industry. Edward “Eddie” Williams has served as a director of the Company since October 2023. Mr. Williams has served as a member of the board of directors of BioAtla, Inc. (Nasdaq: BCAB), a publicly traded biotechnology company focusing on oncology, since December 2021. From January 2018 to December 2022, he served as a member of the board of directors of Catalyst Biosciences Inc. (Nasdaq: CBIO, now GYRE), a publicly traded biopharmaceutical company. He also currently serves as director on the non-profit healthcare boards of Boone Memorial Health, and Innovative Hematology, Inc. From March 2020 to September 2022, Mr. Williams held the positions of Special Advisor to the Chief Executive Officer and Interim Chief Commercial Officer of Ascendis Pharma, Inc. (Nasdaq: ASND). Prior to Ascendis, from 2006 to January 2017, Mr. Williams served as Senior Vice President and General Manager of US BioPharmaceuticals at Novo Nordisk, Inc. (NYSE: NVO), a multinational pharmaceutical and biotech company. Prior to Novo, from 2003 to 2006, Mr. Williams served as Vice President of Sales at the Respiratory and Dermatology Business Unit at Novartis Pharmaceuticals Corporation. Mr. Williams started his career in 1981 at The Upjohn Company (Pharmacia & Upjohn), where he later served as Vice President of Sales until July 2001 and then as Regional Vice President of Sales of Northeast Region post-merger with Searle, from July 2001 until May 2003. Mr. Williams holds a B.S. in Biology and Chemistry from the Marshall University, Huntington, WV, and the Grambling State University, Grambling, LA. We believe that Mr. Williams’s qualifications to sit on our Board include his extensive board and leadership experience, coupled with his successful experiences pre-launch and commercialization of novel compounds in the pharmaceutical industry. Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees. The Code of Business Conduct and Ethics is available on our website at www.biomx.com. If we make any substantive amendments to the Code of Business Conduct and Ethics or grants any waiver from a provision of the Code to any director or executive officer, we will promptly disclose the nature of the amendment or waiver on our website. 90 Board Committees and Corporate Governance Board Composition and Leadership Structure As of March 25, 2025, the Board is comprised of eight members. The Board has a flexible policy with respect to the combination or separation of the offices of Chairman of the Board and Chief Executive Officer. Currently, Dr. Russell Greig serves as our independent Chairman, and Mr. Jonathan Solomon serves as our Chief Executive Officer. The Board believes that by having separate roles, the Chief Executive Officer is able to focus on the day-to-day business and affairs of the Company and the Chairman is able to focus on key strategic issues, board leadership and communication. While the Board believes this leadership structure is currently in the best interests of the Company and its stockholders, the Board also recognizes that future circumstances could lead it to combine these roles. Board Committees The Board has established three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, each of which is composed solely of independent directors, and is described more fully below. Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee operates pursuant to a written charter and each committee reviews and assesses the adequacy of its charter and submits its charter to the Board for approval. The charters for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are all available on our website, www.biomx.com. Audit Committee Our Audit Committee engages the Company’s independent accountants: reviews their independence and performance; reviews the Company’s accounting and financial reporting processes and the integrity of its financial statements; reviews the audits of the Company’s financial statements and the appointment, compensation, qualifications, independence and performance of the Company’s independent auditors; reviews the Company’s compliance with legal and reviews regulatory requirements; and reviews the performance of the Company’s internal audit function and internal control over financial reporting. The members of the Audit Committee are Susan Blum, Dr. Russell Greig and Edward Williams, each of whom is an independent director under NYSE American’s listing standards and satisfies the additional independence requirements of Rule 10A-3 of the Exchange Act. Susan Blum is the Chairperson of the Audit Committee and is an “audit committee financial expert,” as defined under the rules and regulations of the SEC. Compensation Committee Our Compensation Committee reviews annually the Company’s corporate performance goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of such goals and objectives, determines and approves the Chief Executive Office’s compensation level based on this evaluation; makes recommendations to the Board regarding approval, disapproval, modification, or termination of existing or proposed employee benefit plans; makes recommendations to the Board with respect to the compensation of our executive officers, other than the Chief Executive Officer, and directors; and administers the Company’s incentive-compensation plans and equity-based plans, as well as the Company’s clawback policy. The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees as it may deem appropriate in its sole discretion. The Chief Executive Officer of the Company may not be present during voting or deliberations of the Compensation Committee with respect to his compensation. The Company’s executive officers do not play a role in suggesting their own salaries. The members of the Compensation Committee are Dr. Alan Moses, Mr. Jonathan Leff and Dr. Russell Greig, each of whom is an independent director under NYSE American’s listing standards. Dr. Alan Moses is the Chairperson of the Compensation Committee. 91 In 2024, the Compensation Committee retained Aon Solutions UK Limited or Aon, an independent compensation consultant, to provide advice with respect to providing, and periodically updating, competitive market data for our executive officers and developing preliminary approaches to 2024 long-term incentive award guidelines. equity grants between newly hired and long-standing employees. Provided the updated materials to the Company. Nominating and Governance Committee Our Nominating and Corporate Governance Committee is responsible for overseeing the selection of persons to be nominated to serve on the Board. Specifically, the Nominating and Corporate Governance Committee makes recommendations to the Board regarding the size and composition of the Board, establishes procedures for the director nomination process and screens and recommends candidates for election to the Board. On an annual basis, the Nominating and Corporate Governance Committee recommends for approval by the Board certain desired qualifications and characteristics for Board membership. Additionally, the Nominating and Corporate Governance Committee establishes and oversees the annual assessment of the performance of the Board as a whole and its individual members. The Nominating and Corporate Governance Committee will consider a number of qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board. Although the Nominating and Corporate Governance Committee does not have a formal policy with regard to the consideration of diversity identifying nominees, the Nominating and Corporate Governance Committee may require certain skills or attributes, such as financial or accounting experience, to meet specific needs of the Board that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of Board members. The Nominating and Corporate Governance Committee does not distinguish among nominees recommended by stockholders and other persons. The members of the Nominating and Corporate Governance Committee are Dr. Russell Greig, Dr. Jesse Goodman and Mr. Gregory Merril, each of whom is an independent director under NYSE American’s listing standards. Dr. Russell Greig is the Chairperson of the Nominating and Corporate Governance Committee. Insider Trading Policy We have adopted an insider trading policy, or the Policy, governing the purchase, sale and other transactions in our securities that applies to our directors, executive officers, employees, and other covered persons, including immediate family members and entities controlled by any of the foregoing persons, as well as by the Company itself. The Policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales, buying put and selling call options and other hedging or derivative transactions in our securities) and establishes a regular blackout period schedule during which directors, executive officers, employees, and other covered persons may not trade in the Company’s securities, as well as certain pre-clearance procedures that directors and executive officers must observe prior to effecting any transaction in our securities. The Company believes that the Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Policy is filed as Exhibit 19.1 to this Form 10-K. 92 ITEM 11. EXECUTIVE COMPENSATION Summary Compensation Table The following table sets forth the total compensation paid or accrued during the last two fiscal years with respect to (i) our Chief Executive Officer, (ii) our two other most highly compensated executive officers, who each earned more than $100,000 during the fiscal year ended December 31, 2024, and were serving as executive officers as of such date. Name and Principal Position Year Salary ($) (1) Bonus ($) (1) Stock Awards ($) (4) Option Awards ($) (2) All Other Compensation ($) (1)(3) Total ($) (1) Jonathan Solomon 2024 415,103 50,689 49,798 460,921 102,081 1,078,592 Chief Executive Officer 2023 412,135 201,234 - 404,174 100,998 1,118,541 Marina Wolfson 2024 179,905 - - 124,854 46,793 351,552 Chief Financial Officer 2023 214,727 76,209 - 90,742 46,578 428,256 Dr. Merav Bassan 2024 265,809 31,833 31,273 130,859 73,208 532,982 Chief Development Officer 2023 264,105 101,145 - 153,218 72,463 590,931 (1) All payments were originally made in NIS and were translated into USD using the annual average USD/NIS exchange rate for each fiscal year. (2) Amounts in this column represent the grant date fair value of the option awards as computed in accordance with ASC 718, not including any estimates of forfeitures related to service-based vesting conditions. See note 12B to our Consolidated Financial Statements for the year ended December 31, 2024 included elsewhere in this Annual Report for a discussion of assumptions made by the Company in determining the grant date fair value of our option awards for the fiscal years ended December 31, 2024 and 2023. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the employee upon the vesting of the stock options, the exercise of the stock options, or the sale of the Common Stock underlying such stock options. (3) Amounts in this column represent additional payments for welfare benefits, disability insurance and other customary or mandatory social benefits to employees in Israel. (4) Amounts in this column represent the fair value of restricted stock units, or RSUs as of the date of grant thereof. The RSUs were fully vested upon grant and the underlying shares of common stock were issued on the grant date and are not subject to continued service to the Company. The fair value of the stock awards’ grant is the Company’s stock closing price as of the grant date, which was $0.99 per share. 93 Narrative Disclosure to the Summary Compensation Table Option Awards Prior to the Business Combination, option awards were granted to our named executive officers under the 2015 Plan. Option awards granted to our named executive officers after the closing of the Business Combination are granted pursuant to the 2019 Plan. In each case, one fourth of the options vest and become exercisable on the first anniversary of the grant date, and the remainder of the options vest and become exercisable in 12 equal quarterly instalments, subject to the named executive officer’s continued employment; provided that the options will vest and become exercisable in the event the named executive officer is terminated within the twelve (12) month period following the occurrence of a Change in Control (as defined in the applicable grant agreement) as a result of an involuntary termination without Cause (as defined in the applicable grant agreement) or a voluntary termination with Good Reason (as defined in the applicable grant agreement). Subject to the terms of any employment agreement, the unexercised portion of these awards is generally forfeited by a participant on the date his or her employment is terminated other than due to death or disability. In the event of death or disability, the options become fully exercisable and remain exercisable for a period specified in the applicable award agreement. RSU Awards In September 2024, pursuant to our 2019 plan, we granted RSUs to four senior officers and one service provider. The RSUs were fully vested and issued on the grant date and are not subject to continued service to the Company. Bonus Awards We have an annual corporate and individual goal-setting and review process for our named executive officers that is the basis for the determination of potential annual bonuses. Each of our named executive officers is eligible for annual performance-based bonuses of up to a specific percentage of their salary, ranging from 40% to 50% subject to approval by the Board or the Compensation Committee. The performance-based bonus is tied to a set of specified corporate and/or individual goals and objectives reviewed and approved by the Board, such as clinical and development milestones, meeting budget and strategic goals, and we conduct an annual performance review to determine the attainment of such goals and objectives. Our management may propose bonus awards to the Board primarily based on such review process. The Compensation Committee makes the final determination of the achievement of both the specified corporate and strategic objectives and the eligibility requirements for and the amount of such bonus awards and recommends a bonus award payout to the Board for approval. For fiscal year 2024, bonuses were accrued following the completion of the March 2024 PIPE. Employment Agreements Below are descriptions of our employment agreements with our named executive officers. Jonathan Solomon Pursuant to an employment agreement dated February 1, 2016, by and between BiomX Israel and Mr. Solomon, as the Chief Executive Officer of BiomX Israel, as amended, Mr. Solomon is entitled to a base salary of NIS 100,000, or approximately $27,304, per month, and an additional gross payment of NIS 25,000, or approximately $6,759, per month for up to 40 hours per month worked outside of normal business hours and normal business days (together with the base salary, Mr. Solomon’s Salary). BiomX Israel also makes customary contributions on Mr. Solomon’s behalf to a pension fund or a managers insurance company, at Mr. Solomon’s election, in an amount equal to 8.33% of his Salary, allocated to a fund for severance pay, and an additional amount equal to 5.00% of the Salary in case Mr. Solomon is insured through a managers insurance policy, or 6.50% of Mr. Solomon’s Salary in case Mr. Solomon is insured through a pension fund, which shall be allocated to a provident fund or pension plan. In case Mr. Solomon chooses to allocate his pension payments to a managers insurance policy (and not a pension fund), the Company shall also insure him under a work disability insurance policy at the rate required to insure 100% of Mr. Solomon’s Salary and for this purpose will contribute an amount of up to 2.50% of Mr. Solomon’s Salary insured in such insurance policy for disability insurance in a policy and/or insurance company. These payments are intended to be in lieu of statutory severance pay that Mr. Solomon would otherwise be entitled to receive from BiomX Israel in accordance with Severance Pay Law 5723-1963, or the Severance Pay Law. BiomX Israel also contributes 7.50% of Mr. Solomon’s monthly salary to a recognized educational fund. BiomX Israel also reimburses Mr. Solomon for automobile maintenance and transportation expenses of NIS 2,000, or $541 per month. Mr. Solomon is also entitled to non-statutory 12 months severance, upon either (i) resignation with a good reason, or (ii) termination without cause (as the terms good reason and cause would be defined by the parties, consistent with our past practice), provided that Mr. Solomon waives all claims and continues to comply with the other terms of his employment agreement. On March 24, 2025, the Board approved a cash bonus equal to three-months’ salary for Mr. Solomon on the account of existing personal non-statutory severance agreement. The cash payment is expected to be paid during April 2025. Following the payment, Mr. Solomon’s non-statutory severance will be reduced to nine months. 94 Marina Wolfson Pursuant to an employment agreement dated December 1, 2019, by and between BiomX Israel and Ms. Wolfson, as amended, she serves as our Chief Financial Officer. Ms. Wolfson is entitled to a base salary of NIS 54,080, or approximately $14,620, per month, and an additional gross payment of NIS 13,520, or approximately $3,655, per month for up to 40 hours per month worked outside of normal business hours and normal business days (together with the base salary, Ms. Wolfson’s Salary). BiomX Israel also makes customary contributions on Ms. Wolfson’s behalf to a pension fund or a managers insurance company, at Ms. Wolfson’s election, in an amount equal to 8.33% of Ms. Wolfson’s Salary, allocated to a fund for severance pay, and an additional amount equal to 5.00% of Ms. Wolfson’s Salary in case Ms. Wolfson is insured through a managers insurance policy, or 6.50% of Ms. Wolfson’s Salary in case Ms. Wolfson is insured through a pension fund, which shall be allocated to a provident fund or pension plan. In case Ms. Wolfson chooses to allocate her pension payments to a managers insurance policy (and not a pension fund), the Company shall also insure her under a work disability insurance policy at the rate required to insure 75% of Ms. Wolfson’s Salary and for this purpose will contribute an amount of up to 2.50% of Ms. Wolfson’s Salary insured in such insurance policy for disability insurance in a policy and/or insurance company. These payments are in lieu of statutory severance pay that Ms. Wolfson would otherwise be entitled to receive from BiomX Israel in accordance with the Severance Law. BiomX Israel also contributes 7.50% of Ms. Wolfson’s monthly Salary (not to exceed NIS 15,712, or approximately $4,248) to a recognized educational fund. The Company reimburses Ms. Wolfson for automobile maintenance and transportation expenses of NIS 2,500, or approximately $676, per month. Ms. Wolfson is also entitled to non-statutory 9 months severance, upon either (i) resignation with a good reason, or (ii) termination without cause (as the terms good reason and cause would be defined by the parties, consistent with our past practice), provided that Ms. Wolfson waives all claims and continues to comply with the other terms of her employment agreement. On March 24, 2025, the Board approved a cash bonus equal to three-months’ salary for Ms. Wolfson on the account of existing personal non-statutory severance agreement. The cash payment is expected to be paid during April 2025. Following the payment, Ms. Wolfson’s non-statutory severance will be reduced to six months. Dr. Merav Bassan Pursuant to an employment agreement dated August 26, 2019, by and between BiomX Israel and Dr. Bassan, as the Chief Development Officer of BiomX Israel, as amended, Dr. Bassan is entitled to a base salary of NIS 62,800, or approximately $16,978, per month, and an additional gross payment of NIS 15,700, or approximately $4,244, per month for up to 40 hours per month worked outside of normal business hours and normal business days (together with the base salary, Dr. Bassan’s Salary). BiomX Israel also makes customary contributions on Dr. Bassan’s behalf to a pension fund or a managers insurance company, at Dr. Bassan’s election, in an amount equal to 8.33% of Dr. Bassan’s Salary, allocated to a fund for severance pay, and an additional amount equal to 7.30% of Dr. Bassan’s Salary in case Dr. Bassan is insured through a managers insurance policy, or 6.50% of Dr. Bassan’s Salary in case Dr. Bassan is insured through a pension fund, which shall be allocated to a provident fund or pension plan. In case Dr. Bassan chooses to allocate her pension payments to a managers insurance policy (and not a pension fund), the Company shall also insure her under a work disability insurance policy at the rate required to insure 75% of Dr. Bassan’s Salary and for this purpose will contribute an amount of up to 2.50% of the Salary insured in such insurance policy for disability insurance in a policy and/or insurance company. These payments are in lieu of statutory severance pay that Dr. Bassan would otherwise be entitled to receive from BiomX Israel in accordance with the Severance Law. BiomX Israel also contributes 7.50% of Dr. Bassan’s monthly Salary to a recognized educational fund. The Company reimburses Dr. Bassan for automobile maintenance and transportation expenses of NIS 2,500, or approximately $676, per month. Dr. Bassan is also entitled to non-statutory 9 months severance, upon either (i) resignation with a good reason, or (ii) termination without cause (as the terms good reason and cause would be defined by the parties, consistent with our past practice), provided that Dr. Bassan waives all claims and continues to comply with the other terms of her employment agreement. On March 24, 2025, the Board of Directors approved cash bonus equal to three-months’ salary for Dr. Bassan on the account of existing personal non-statutory severance agreement. The cash payment is expected to be paid during April 2025. Following the payment, Dr. Bassan’s non-statutory severance will be reduced to six months. 95 Outstanding Equity Awards at 2024 Fiscal Year-End The following table provides information regarding equity awards held by the named executive officers that were outstanding as of December 31, 2024: Option Awards Name Grant Date Number of Securities Underlying Unexercised Options Exercisable (1) (#) Number of Securities Underlying Unexercised Options Unexercisable (1) (#) Option Exercise Price ($) Option Expiration Date Jonathan Solomon 11/13/2016 16,744 - 5.38 01/07/2027 03/26/2017 18,214 - 2.75 03/26/2027 05/22/2018 20,172 - 2.75 05/21/2028 03/29/2019 28,471 - 2.75 03/29/2029 03/25/2020 3,790 - 2.75 03/25/2030 03/30/2021 3,750 250 2.75 03/30/2031 03/29/2022 10,067 4,576 2.75 03/29/2032 08/22/2022 5,625 4,375 0.66 08/22/2032 03/01/2023 17,937 23,063 4.00 03/01/2033 07/11/2024 - 380,500 3.63 07/11/2034 Dr. Merav Bassan 10/10/2019 19,000 - 2.75 10/10/2029 03/30/2021 1,171 79 2.75 03/30/2031 03/29/2022 4,910 2,233 2.75 03/29/2032 08/22/2022 4,219 3,281 6.60 08/22/2032 03/01/2023 4,375 5,625 4.00 03/01/2033 07/11/2024 - 95,000 3.63 07/11/2034 Marina Wolfson 03/25/2020 948 - 2.75 03/25/230 03/30/2021 820 55 2.75 03/30/2031 03/29/2022 2,455 1,117 2.75 03/29/2032 08/22/2022 4,219 3,281 6.60 08/22/2032 03/01/2023 4,375 5,625 4.00 03/01/2033 29/10/2023 1,495 4,485 2.75 10/29/2033 07/11/2024 - 95,000 3.63 07/11/2034 (1) Unless otherwise indicated, options vest and become exercisable as follows: 25% of the options on the first anniversary of the “vesting commencement date” (as defined in the applicable notice of option grant) and, thereafter, in 12 equal quarterly installments of 6.25% each. Compensation of Directors We maintain a non-employee director compensation policy, pursuant to which each non-employee director receives an annual retainer of $35,000. In addition, our non-employee directors receive the following cash compensation for board services, as applicable: ● the chairman of the Board receives an annual retainer of $100,000 (inclusive of annual committee chairmanship and membership); 96 ● each member of our Audit, Compensation and Nominating and Corporate Governance Committees, other than the chairperson, receives an additional annual retainer of $7,500, $5,000 and $4,000, respectively; and ● each chairperson of our Audit, Compensation and Nominating and Corporate Governance Committees receives an additional annual retainer of $15,000, $10,000 and $8,000, respectively. We pay all amounts in quarterly installments. We also reimburse each of our directors for their reasonable travel, lodging and other out-of-pocket expenses incurred relating to their attendance at Board and committee meetings. Each non-employee director also receives an annual award of options to purchase our Common Stock. One-fourth of each Annual Option Award vests on the first anniversary of the date of grant, and the remainder of the annual option award vests in 12 equal quarterly installments, subject to such director’s continued service on the Board. The Company’s policy is to grant options based, among other things, on the recommendations of a compensation consultant. In 2024, the Company granted options to directors according to the following structure: 17,600 options to continuing non-employee directors, 26,400 options (150% the mentioned grant) to newly appointed non-employee directors, and 35,200 options to the Chairman of the Board. The following table sets forth information concerning compensation accrued or paid to our independent, non-employee directors during the year ended December 31, 2024 for their service on our Board. Mr. Jonathan Solomon, a director who is also our employee, received no additional compensation for his service as a director and is not set forth in the table below: Name Fees earned or paid in cash ($) Option Awards (2)(3) All other compensation Total ($) Dr. Russell Greig 101,262 55,330 - 156,592 Susan Blum 35,164 22,442 - 57,606 Michael Dambach (1) 8,757 - - 8,757 Jesse Goodman 31,072 22,442 - 53,514 Jonathan Leff (5) 31,869 22,442 - 54,311 Jason Marks (1) 8,242 - - 8,242 Greg Merril 31,072 22,442 - 53,514 Dr. Alan Moses 45,824 29,214 - 75,038 Lynne Sullivan (1)(4) 13,627 12,702 - 26,329 Edward Williams 40,975 19,856 - 60,831 347,864 206,870 - 554,734 (1) Effective as of March 15, 2024, the director resigned and no longer serves on the Board. (2) Amounts in this column represent the grant date fair value of the option awards as computed in accordance with ASC 718, not including any estimates of forfeitures related to service-based vesting conditions. See note 12B. of the notes to Consolidated Financial Statements included elsewhere in this Annual Report for a discussion of assumptions made by the Company in determining the grant date fair value of our option awards for the fiscal years ended December 31, 2023 and 2024. Note that the amounts reported in this column reflect the accounting cost for these stock options and do not reflect the actual economic value that may be realized by the non-employee directors upon the vesting of the stock options, the exercise of the stock options, or the sale of the Common Stock underlying such stock options. (3) As of December 31, 2024, we had outstanding grants to our non-executive directors aggregating 207,910 options of which 19,708 were exercisable or vested, as the case may be, as follows: 97 Name Total of options granted Total of options exercisable and vested Russell Greig 53,740 12,456 Susan Blum 26,400 - Jesse Goodman 26,400 - Jonathan Leff 26,400 - Gregory Merril 26,400 - Dr. Alan Moses 26,870 6,227 Edward Williams 21,700 1,025 Total 207,910 19,708 (4) Includes $2,500 paid to Ms. Sullivan in consulting fees following her resignation as a director of the Company. (5) Cash amounts owed to Mr. Leff for his service as a director were paid to Deerfield Management Company LP. The Company’s Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We do not have any formal policy that requires the Company to grant, or avoid granting, equity-based compensation at certain times. We do not grant equity awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, and do not time the public release of such information based on award grant dates. The timing of any equity grants to executive officers or directors in connection with new hires, promotions, or other non-routine grants is tied to the event giving rise to the award (such as an executive officer’s commencement of employment or promotion effective date). During the year ended December 31, 2024, there were no equity grants made to our executive officers during any period beginning four business days before the filing of a periodic report or current report disclosing material non-public information and ending one business day after the filing or furnishing of such report with the Securities and Exchange Commission. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Securities Authorized for Issuance Under Equity Compensation Plans We have two equity incentive plans, the 2015 Plan, and the 2019 Plan. Although no shares of our Common Stock are available for future issuance under the 2015 Plan, the 2015 Plan will continue to govern outstanding awards granted thereunder. As of December 31, 2024, options to purchase 204,974 shares of our Common Stock remained outstanding under the 2015 Plan. The 2019 Plan was adopted by the Board of Directors and approved by our stockholders in connection with the Business Combination. As of December 31, 2024, there were 5,818,677 shares of our Common Stock available for issuance under the 2019 Plan. The aggregate number of shares of our Common Stock available for issuance pursuant to the 2019 Plan automatically increases on January 1 of each year, for a period of not more than ten years, commencing on January 1, 2020 and ending on (and including) January 1, 2029, in an amount equal to 4% of the total number of shares of Common Stock outstanding on December 31 of the preceding calendar year. Accordingly, on January 1, 2025, 727,066 additional shares of our Common Stock were made available for issuance pursuant to the 2019 Plan. 98 For additional information regarding the 2015 Plan and the 2019 Plan, as of December 31, 2024, please see Part II – Item 8 – Financial Statements and Supplemental Data – Notes to consolidated financial statements – note 12B – Stock-Based Compensation. Equity Compensation Plan Information December 31, 2024 Plan category Number of securities to be issued upon exercise of outstanding options and restricted stock (a) Weighted- average exercise price of outstanding options and restricted stock (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders 1,797,391 4.20 5,818,677 Equity compensation plans not approved by security holders 204,974 3.18 - Total 2,002,365 4.09 5,818,677 Security Ownership of Certain Beneficial Owners and Management The following table sets forth information regarding the beneficial ownership of our Common Stock as of March 20, 2025 (except as otherwise indicated) based on information obtained from the persons named below, with respect to the beneficial ownership of our Common Stock, by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock; (ii) each of our named executive officers and directors; and (iii) all our executive officers and directors as a group. Information with respect to beneficial ownership is based on information furnished to us by each director, executive officer or stockholder who holds more than 5% of our outstanding Common Stock, and Schedules 13G or 13D filed with the SEC, as the case may be, and includes shares of our Common Stock which each beneficial owner has the right to acquire within 60 days of March 17, 2025. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all Common Stock beneficially owned by them. We have based our calculation of beneficial ownership on 24,966,053 shares of our Common Stock outstanding as of March 20, 2025. Name and Address of Beneficial Owner (1) Amount and Nature of Beneficial Ownership Percent of Class Cystic Fibrosis Foundation (2) 2,494,109 9.99 % Nantahala Capital Management, LLC (3) 2,494,109 9.99 % Deerfield Healthcare Innovations Fund II, L.P. (4) 2,632,517 9.99 % OrbiMed Israel GP Ltd. (5) 1,847,565 7.38 % Alyeska Master Fund (6) 1,590,738 6.37 % AIGH Investment Partners, LP (7) 1,590,738 6.37 % Directors and Named Executive Officers Jonathan Solomon (8) 184,054 * Marina Wolfson (9) 17,087 * Dr. Merav Bassan (10) 67,043 * Susan Blum — — Dr. Jesse Goodman — — Dr. Russell Greig (11) 14,071 * Jonathan Leff — — Gregory Merril — — Dr. Alan Moses (12) 7,582 * Edward Williams (13) 1,537 * All directors and executive officers as a group (10 persons) 291,374 1.17 % * Less than 1%. (1) Unless otherwise indicated, the business address of each of the individuals is c/o BiomX Inc., 22 Einstein St., 4 th Floor, Ness Ziona 7414003, Israel. 99 (2) Based on certain information made available to the Company and on the Schedule 13G/A filed with the SEC on March 4, 2025. Represents 2,494,109 shares of Common Stock and excludes (i) 1,308,800 shares of Common Stock issuable upon conversion of 13,088 shares of Series X Preferred Stock (subject to a 9.99% beneficial ownership limitation), (ii) 1,081,750 shares of Common Stock issuable upon exercise of the Private Placement Common Warrants (subject to a 9.99% beneficial ownership limitation), (iii) 1,174,859 shares of Common Stock issuable upon exercise of New Warrants (subject to a 9.99% beneficial ownership blocker). (iv) 375,399 shares of Common Stock issuable upon exercise of Amended and Restated warrants (subject to a beneficial ownership blocker, (v) 583,237 shares of Common Stock issuable upon exercise of Private Placement Pre-Funded Warrants (subject to a 9.99% beneficial ownership limitation) and (vi) 591,622 shares of Common Stock issuable upon exercise of Registered Pre-Funded Warrants (subject to a 9.99% beneficial ownership limitation). Such Private Placement Common Warrants, New Warrants and Private Placement Pre-Funded Warrants will only be exercisable following stockholder approval. The address of Cystic Fibrosis Foundation is 4550 Montgomery Ave. Suite 1100N Bethesda, MD 20814. (3) Based on certain information made available to the Company and on the Schedule 13G filed jointly with the SEC on November 13, 2024, by Nantahala Capital Management, LLC, or Nantahala, Wilmot B. Harkey and Daniel Mack. Represents 2,494,109 shares of Common Stock. Excludes (i) 865,300 shares of Common Stock issuable upon exercise of New Warrants (subject to a beneficial ownership limitation of 9.99%), (ii) 424,191 shares of Common Stock issuable upon exercise of Private Placement Common Warrants (subject to a beneficial ownership limitation of 9.99%), (iii) 101,791 shares of Common Stock issuable upon exercise of Amended and Restated Warrants (subject to beneficial ownership limitations), (iv) 210,582 shares of Common Stock issuable upon exercise of Private Placement Pre-Funded Warrants (subject to a 9.99% beneficial ownership limitation), and (v) 213,609 shares of Common Stock issuable upon exercise of Registered Pre-Funded Warrants (subject to a 9.99% beneficial ownership limitation). Such Private Placement Common Warrants, New Warrants and Private Placement Pre-Funded Warrants will only be exercisable following stockholder approval. As the managing members of Nantahala, each of Messrs. Harkey and Mack may be deemed to be a beneficial owner of the securities reported herein held by Nantahala. Nantahala, Mr. Harkey and Mr. Mack have shared dispositive power and voting power over the securities reported herein. The address of Nantahala. Nantahala, Mr. Harkey and Mr. Mack is 130 Main St, New Canaan, Connecticut 06840. (4) Based on certain information made available to the Company and on the Schedule 13D/A filed jointly with the SEC on March 3, 2025, by (i) Deerfield Private Design Fund V, L.P., or Deerfield Private Design V, (ii) Deerfield Mgmt V, L.P., or Deerfield Mgmt V, (iii) Deerfield Healthcare Innovations Fund II, L.P., or Deerfield HIF II, (iv) Deerfield Mgmt HIF II, L.P., or Deerfield Mgmt HIF II, (v) Deerfield Management Company, L.P., or Deerfield Management, and (vi) James E. Flynn, or collectively, Deerfield. Represents (i) 1,247,054 shares of common stock held directly by Deerfield Private Design V and Deerfield HIF II, or collectively, the Funds, and (ii) an aggregate of 1,385,463 shares of Common Stock issuable upon conversion of shares of Series X Preferred Stock (subject to a 9.99% beneficial ownership limitation) held directly by the Funds, and shares of Common Stock issuable upon exercise of certain warrants (subject to a 9.99% beneficial ownership limitation) that were exercisable as of March 20, 2025, or will become exercisable within 60 days thereafter, held by the Funds. Excludes an aggregate of 5,146,706 shares of Common Stock issuable upon conversion of Series X Preferred Stock (subject to a 9.99% beneficial ownership limitation), and Common Stock issuable upon exercise of certain warrants. Some of such warrants will only be exercisable following stockholder approval or are subject to a 9.99% beneficial ownership limitation. Mr. Flynn is the managing member of the general partner of each of Deerfield Mgmt V and Deerfield Mgmt HIF II and Deerfield Management. Deerfield Mgmt V is the general partner of Deerfield Private Design Fund V, L.P. Deerfield Mgmt HIF II is the general partner of Deerfield Healthcare Innovations Fund II, L.P. and Deerfield Management is the investment manager of each Fund. As a result, Deerfield Management and Mr. Flynn have shared voting power and shared dispositive power over the securities held by the Funds, Deerfield Mgmt V has shared voting power and shared dispositive power over the securities held by Deerfield Private Design V and Deerfield Mgmt HIF II shared voting power and shared dispositive power over the securities held by Deerfield HIF II. The address for Deerfield is 345 Park Avenue South, 12th Floor, New York, New York 10010. (5) Based on certain information made available to the Company and on the Schedule 13G/A filed jointly with the SEC on July 17, 2024, by OrbiMed Israel BioFund GP Limited Partnership, or OrbiMed BioFund, OrbiMed Israel GP Ltd., or OrbiMed Israel, Carl L. Gordon and Erez Chimovits. Represents (i) 1,787,765 shares of Common Stock held by OrbiMed Israel Partners Limited Partnership, or OIP, and (ii) an aggregate of 59,800 shares of common stock issuable upon conversion of Series X Preferred Stock held by OIP (subject to a 9.99% beneficial ownership limitation) and shares of common stock issuable upon exercise of certain warrants held by OIP (subject to a 9.99% beneficial ownership limitation) that were exercisable as of March 20, 2025, or will become exercisable within 60 days thereafter. OrbiMed BioFund is the general partner of OIP and OrbiMed Israel is the general partner of OrbiMed BioFund. OrbiMed Israel exercises investment power over the securities held by OrbiMed BioFund through an investment committee comprised of Mr. Gordon and Mr. Chimovits. As a result, OrbiMed Israel, OrbiMed BioFund, Mr. Gordon, and Mr. Chimovits have shared voting power and shared dispositive power over the securities reported herein held by OIP. OrbiMed Israel, OrbiMed BioFund, Mr. Gordon, and Mr. Chimovits may be deemed directly or indirectly, including by reason of their mutual affiliation, to be the beneficial owners of the securities held by OIP. The address of OrbiMed BioFund, OrbiMed Israel and Mr. Chimovits is 89 Medinat Hayehudim St. Building E Herzliya 4614001 Israel. The address of Mr. Gordon is 601 Lexington Avenue, 54th Floor, New York, New York 10022. (6) Based on certain information made available to the Company. Represents 1,590,738 shares of Common Stock held by Alyeska Master Fund, or Alyeska, and excludes an aggregate of 725,338 shares of Common Stock issuable upon exercise of certain warrants (subject to a beneficial ownership limitation), as such warrants will only be exercisable following stockholder approval. The address of Alyeska is 77 W. Wacker, Suite 700, Chicago, IL 60601. 100 (7) Based on certain information made available to the Company. Represents 1,590,738 shares of Common Stock held by AIGH Investment Partners, LP, or AIGH, and excludes an aggregate of 725,338 shares of Common Stock issuable upon exercise of certain warrants (subject to a beneficial ownership limitation), as such warrants will only be exercisable following stockholder approval. The address of AIGH is 6006 Berkeley Avenue, Baltimore, MD 21209. (8) Represents (i) 53,056 shares of Common Stock, (ii) 1,875 shares of Common Stock issuable upon exercise of certain warrants and (iii) certain options to purchase 129,123 shares of Common Stock that were vested as of March 20, 2025, or will vest within 60 days thereafter. (9) Represents (i) 375 shares of Common Stock, (ii) 281 shares of Common Stock issuable upon exercise of certain warrants and (iii) certain options to purchase 16,431 shares of Common Stock that were vested as of March 20, 2025, Date or will vest within 60 days thereafter. (10) Represents (i) 31,749 shares of Common Stock and (ii) certain options to purchase 35,294 shares of Common Stock that were vested as of March 20, 2025, or will vest within 60 days thereafter. (11) Represents (i) 375 shares of Common Stock, (ii) 281 shares of Common Stock issuable upon exercise of certain warrants and (iii) certain options to purchase 13,415 shares of Common Stock that were vested as of March 20, 2025, or will vest within 60 days thereafter. (12) Represents (i) 500 shares of Common Stock, (ii) 375 shares of Common Stock issuable upon exercise of certain warrants and (iii) certain options to purchase 6,707 shares of Common Stock that were vested as of March 20, 2025, or will vest within 60 days thereafter. (13) Represents certain options to purchase 1,537 shares of Common Stock that were vested as of March 20, 2025, or will vest within 60 days thereafter. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Director Independence The NYSE American requires that a majority of the Board be composed of “independent directors,” which is defined generally as a person other than an officer or employee of the Company or its subsidiaries or any other individual having a relationship that, as determined by the Board, would interfere with the exercise of his or her objective judgment and will meet the required standards for independence, as established by the applicable rules and regulations of the NYSE American and the SEC. Dr. Russell Greig, Dr. Alan Moses, Mr. Edward Williams, Mr. Jonathan Leff, Dr. Jesse Goodman, Mr. Gregory Merril and Ms. Blum are our independent directors. At least annually, the Board evaluates all relationships between us and each director considering relevant facts and circumstances for the purposes of determining whether a material relationship exists that might signal a potential conflict of interest or otherwise interfere with such director’s ability to satisfy his or her responsibilities as an independent director. Based on this evaluation, our Board will make an annual determination of whether each director is independent within the meaning of NYSE American and the SEC independence standards. 101 Policies and Procedures Regarding Transactions with Related Parties Our Related-Person Transactions Policy requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board (or the Audit Committee). For as long as the Company qualifies as a “smaller reporting company” as defined under Rule 12b-2 under the Exchange Act, a related-person transaction is defined under our Related-Person Transactions Policy as a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any Related Person (as defined in the policy) are, were or will be participants in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any Related Person had or will have a direct or indirect material interest. If the Company ceases to be a smaller reporting company, a related-person transaction will be defined as a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company and any Related Person are, were or will be participants in which the amount involved exceeds $120,000, and in which any Related Person had or will have a direct or indirect material interest. Transactions involving compensation for services provided to us as an employee, consultant or director are not considered related-person transactions under this policy. In the event that the Company proposes to enter into, or materially amend, a related-person transaction, management of the Company shall present such related-person transaction to the Audit Committee for review, consideration and approval or ratification. The presentation must include, to the extent reasonably available, a description of (a) all of the parties thereto, (b) the interests, direct or indirect, of any Related Person(s) in the transaction in sufficient detail so as to enable the Audit Committee to fully assess such interests, (c) the purpose of the transaction, (d) all of the material facts of the proposed related-person transaction, including the proposed aggregate value of such transaction, or, in the case of indebtedness, the amount of principal that would be involved, (e) the benefits to the Company of the proposed related-person transaction, (f) if applicable, the availability of other sources of comparable products or services, (g) an assessment of whether the proposed related-person transaction is on terms that are comparable to the terms available to or from, as the case may be, unrelated third parties that would have been negotiated at arm’s length, and (h) management’s recommendation with respect to the proposed related-person transaction knowing that there is a potential or actual conflict that will arise of the matter proceeds to fruition. In the event the Audit Committee is asked to consider whether to ratify an ongoing related-person transaction, in addition to the information identified above, the presentation must include (i) a description of the extent of work performed and remaining to be performed in connection with the transaction, (ii) an assessment of the potential risks and costs of termination of the transaction, and (iii) where appropriate, the possibility of modification of the transaction. The Committee, in approving or rejecting the proposed related-person transaction, will consider all the relevant facts and circumstances deemed relevant by and available to the Committee, including but not limited to (a) the risks, costs and benefits to the Company, (b) the impact on a director’s independence in the event the Related Person is a director, immediate family member of a director or an entity with which a director is affiliated, (c) the terms and timing of the transaction, (d) the availability of other sources of comparable services or products, (e) the terms available to or from, as the case may be, unrelated third parties, and (f) how the related-person transaction was realized and communicated to the Audit Committee as required under the Related-Person Transactions Policy. The Audit Committee will approve only those related-person transactions that, in light of known circumstances, are in, or are not inconsistent with, the best interests of the Company and its stockholders, as the Audit Committee determines in the good faith exercise of its discretion. Other th an compensation, termination, change in control and other arrangements, which are described in Item 11 – Executive Compensation and Item 12 – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, our only related-person transactions since January 1, 2024 consisted of (i) a Securities Purchase Agreement we entered into on March 6, 2024 with certain investors, including CFF, Orbimed and Telmina Limited, or Telmina, each of which hold more than 5% of our outstanding Common Stock, pursuant to which we sold an aggregate of 216,417 shares of Convertible Preferred Stock and Private Placement Warrants to purchase up to an aggregate of 108,208,500 shares of Common Stock, at a combined purchase price of $231.10 per share of Series X Preferred Stock and accompanying Private Placement Warrant. The aggregate gross proceeds from this offering were approximately $50 million. The Private Placement Warrants have an exercise price of $0.2311 and expire on July 6, 2026. The exercise price of the Private Placement Warrants is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like. Of these proceeds, an aggregate of 21,635 shares of Convertible Preferred Stock and 10,817,500 Private Placement Warrants were sold to CFF for gross proceeds of $5 million, an aggregate of 4,327 shares of Convertible Preferred Stock and 2,163,500 Private Placement Warrants were sold to Orbimed for gross proceeds of $1 million and an aggregate of 2,596 shares of Convertible Preferred Stock and 1,298,000 Private Placement Warrants were sold to Telmina for gross proceeds of $0.6 million and (ii) ) the February 2025 SPA and the Inducement Letter Agreements and other agreements related to the February 2025 Financing (as described more fully in Item 5 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations – Liquidity and Capital Resources”) with certain investors, including Deerfield, CFF, Nantahala Capital Management, LLC, or Nantahala, and AIGH Investment Partners, LP, or AIGH, each of which holds more than 5% of our outstanding Common Stock. Of the proceeds from the February 2025 Financing, total gross proceeds from (a) the CFF were $2.1 million for an aggregate of 2,256,609 shares of Common Stock issuable upon exercise of the New Warrants, 375,399 shares of Common Stock issuable upon exercise of Amended and Restated Warrants, and 1,174,859 shares of Common Stock issuable upon exercise of Pre-Funded Warrants; (b) Deerfield were $3 million for an aggregate of 3,223,728 shares of Common Stock issuable upon exercise of the New Warrants; (c) Nantahala were $1.2 million for an aggregate of 763,509 shares of Common Stock, 1,289,491 shares of Common Stock issuable upon exercise of the New Warrants, 101,791 shares of Common Stock issuable upon exercise of Amended and Restated Warrants and 213,609 shares of Common Stock issuable upon exercise of Pre-Funded Warrants; and (d) AIGH were approximately $0.7 million for an aggregate of 432,700 shares of Common Stock and 725,338 shares of Common Stock issuable upon exercise of the New Warrants. 102 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following is a summary and description of fees billed by us to Kesselman & Kesselman, Certified Public Accountants (Isr.) for the fiscal years ended December 31, 2024 and December 31, 2023. Fiscal year ended December 31, 2024 Fiscal year ended December 31, 2023 Audit fees (1) $ 190,000 $ 126,000 Audit-related fees (2) $ 158,462 $ 97,000 Tax fees (3) $ 7,190 $ 3,393 All other fees - - Total fees $ 355,652 $ 226,393 (1) Audit Fees include fees for professional services rendered for the quarterly reviews of the interim consolidated financial statements and the annual audit of our consolidated financial statements included in our Annual Report on Form 10-K. (2) Audit-Related Fees include fees for services that were reasonably related to the performance of the audit of the annual consolidated financial statements for the fiscal year, other than Audit Fees, such as for services in connection with the Acquisition, Sale Agreement, and a registration statement filed for the re-sale of certain shares of Common Stock by selling stockholders following our March 2024 PIPE and February 2023 PIPE. (3) Tax Fees include fees for tax compliance and tax advice. Pre-Approval Policies and Procedures The Audit Committee approves all audit and pre-approves all non-audit services provided by our independent registered public accounting firm before it is engaged by us to render non-audit services. These services may include audit-related services, tax services and other services. The pre-approval requirement set forth above does not apply with respect to non-audit services if: ● all such services do not, in the aggregate, amount to more than 5% of the total fees paid by us to our independent registered public accounting firm during the fiscal year in which the services are provided; ● such services were not recognized as non-audit services at the time of the relevant engagement; and ● such services are promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit. Pre-Approval Policies and Procedures The Audit Committee approves all audit and pre-approves all non-audit services provided by our independent registered public accounting firm before it is engaged by us to render non-audit services. These services may include audit-related services, tax services and other services. The pre-approval requirement set forth above does not apply with respect to non-audit services if: ● all such services do not, in the aggregate, amount to more than 5% of the total fees paid by us to our independent registered public accounting firm during the fiscal year in which the services are provided; ● such services were not recognized as non-audit services at the time of the relevant engagement; and ● such services are promptly brought to the attention of and approved by the Audit Committee (or its delegate) prior to the completion of the annual audit. 103 part IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following are filed with this Annual Report: (1) The financial statements listed on the Financial Statements’ Table of Contents (2) Not applicable (b) Exhibits The following exhibits are filed as part of this Annual Report or are incorporated by reference. EXHIBIT INDEX Exhibit Description 2.1* Agreement and Plan of Merger, dated March 6, 2024, by and among BiomX Inc., BTX Merger Sub I, Inc., BTX Merger Sub II, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 3.1 Composite Copy of Amended and Restated Certificate of Incorporation of the Company, effective on December 11, 2018, as amended to date (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company on November 14, 2024) 3.2 Amended and Restated Bylaws of the Company, effective as of October 28, 2019, as amended to date (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed by the Company on April 15, 2024) 3.3 Form of Certificate of Designation of Series X Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 4.1*** Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended 4.2 Specimen Common Stock Certificate (Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 filed by the Company on December 4, 2018) 4.3 Form of Warrant (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed by the Company on July 26, 2021) 4.4 Form of Pre-Funded Warrant (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2023) 4.5 Form of Merger Warrant (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 4.6 Form of Private Placement Warrant (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 4.7 Form of Placement Agent Warrant (Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 4.8 Form of Amended and Restated Warrant (Incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 4.9 Form of Pre-Funded Warrant (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 4.10 Form of Private Pre-Funded Warrant (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 4.11 Form of Common Warrant (Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 4.12 Form of New Warrant (Incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 10.1** Amended and Restated Chardan Healthcare Acquisition Corp. Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on July 9, 2024) 104 10.2 Registration Rights Agreement dated October 28, 2019 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019) 10.3** Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed by the Company on May 20, 2024) 10.4* Research and License Agreement, dated June 22, 2015, between BiomX Ltd. and Yeda Research and Development Company Limited, as amended (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019) 10.5** 2015 Employee Stock Option Plan, as amended (Incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-8 filed by the Company on January 2, 2020) 10.6 Registration Rights Agreement, dated December 13, 2018, among the Company and the initial stockholders and Chardan Capital Markets, LLC. (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed by the Company on December 18, 2018) 10.7** Form of Non-Qualified Stock Option Agreement (U.S. Awards to Non-Executives) (Incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed by the Company on March 26, 2020) 10.8** Form of Non-Qualified Stock Option Agreement (U.S. Awards to Executive Officers) (Incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K filed by the Company on March 26, 2020) 10.9** Form of Option Agreement (Israeli Awards) (Incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K filed by the Company on March 26, 2020) 10.10** Form of Restricted Stock Unit Agreement under the Company’s 2019 Omnibus Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company on November 14, 2024) 10.11* An addendum to a lease agreement dated from May 25, 2017, dated September 7, 2020 by and among AFI Assets Ltd., AF – SHAR Ltd., WIS and BiomX Ltd. (translated from Hebrew) (Incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed by the Company on March 31, 2021) 10.12* Lease agreement dated September 7, 2020 by and among AFI Assets Ltd., AF – SHAR Ltd., WIS, Nova Measuring Systems Ltd. and BiomX Ltd. (translated from Hebrew) (Incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed by the Company on March 31, 2021) 10.13 At the Market Offering Agreement, dated December 7, 2023, between the Company and H.C. Wainwright & Co., LLC (incorporated by reference to Exhibit 1.2 of the Company’s Registration Statement on Form S-3 filed by the Company on December 7, 2023) 10.14** Employment Agreement, dated February 1, 2016, between BiomX Ltd. (formerly MBcure Ltd.) and Jonathan Solomon (Incorporated by reference to Exhibit 10.1 to the Company’s Amended Annual Report on Form 10-K/A filed by the Company on May 2, 2022) 10.15** Employment Agreement, dated August 26, 2019, between BiomX Ltd. and Merav Bassan (Incorporated by reference to Exhibit 10.2 to the Company’s Amended Annual Report on Form 10-K/A filed by the Company on May 2, 2022) 10.16 Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed by the Company on February 22, 2023) 10.17* Exclusive License between Adaptive Phage Therapeutics, Inc. and United States of America, as represented by the Secretary of the Navy, dated March 16, 2017 (Incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.18* First Amendment, dated January 10, 2019, to Exclusive License between Adaptive Phage Therapeutics, Inc. and United States of America, as represented by the Secretary of the Navy (Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.19* Non-Exclusive License Agreement by and between Adaptive Phage Therapeutics, Inc. and Walter Reed Army Institute of Research, dated August 24, 2021 (Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.20 License Modification 1, dated August 31, 2022, to Non-Exclusive License Agreement by and between Adaptive Phage Therapeutics, Inc. and Walter Reed Army Institute of Research (Incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.21 Securities Purchase Agreement, dated as of March 6, 2024, by and among BiomX Inc. and each purchaser identified on Annex A thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 10.22 Form of Registration Rights Agreement, dated as of March 6, 2024, by and among the Company and certain purchasers (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed by the Company on March 6, 2024) 10.23* Lease Agreement, dated as of August 9, 2019, by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 105 10.24* Amendment No. 1, dated as of October 28, 2020, to Lease Agreement by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.25* Amendment No. 2, dated as of July 8, 2021, to Lease Agreement by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.26* Amendment No. 3, dated as of July 15, 2021, to Lease Agreement by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.27* Amendment No. 4, dated as of September 27, 2022, to Lease Agreement by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.28* Amendment No. 5, dated as of February 2, 2023, to Lease Agreement by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.29* Amendment No. 6, dated as of March 5, 2024, to Lease Agreement by and between ARE-708 Quince Orchard, LLC and Adaptive Phage Therapeutics, Inc. (Incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 10.30 Form of Securities Purchase Agreement dated February 25, 2025, between BiomX Inc. and the purchasers party thereto (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 10.31 Form of Registration Rights Agreement dated February 25, 2025, between BiomX Inc. and the purchasers (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 10.32 Warrant Exercise and Reload Agreement dated February 25, 2025, between BiomX Inc. and the holders (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 10.33 Placement Agency Agreement dated February 25, 2025, between BiomX Inc. and Laidlaw and Company (UK) Ltd. (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed by the Company on February 27, 2025) 10.34*** MTEC Base Agreement No. 2019-532, dated as of August 22, 2019, by and between Advanced Technology International (MTEC Consortium Manager) and Adaptive Phage Therapeutics, Inc., and the following modifications thereof: (i) Modification No. 1, dated as of September 30, 2019; (ii) Modification No. 2, dated as of July 22, 2020; (iii) Modification No. 3, dated as of September 27, 2021; (iv) Modification No. 4, dated as of September 8, 2022; (v) Modification No. 5, dated as of December 16, 2022; (vi) Modification No. 6, dated as of December 19, 2023; (vii) Modification No. 7, dated as of January 16, 2024; and (viii) Modification No. 8, dated as of September 11, 2024 19.1*** BiomX Inc. Insider Trading Policy 21.1 Subsidiaries of Company (Incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 23.1*** Consent of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited 31.1*** Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a). 31.2*** Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a). 32.1**** Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. 97.1 Clawback Policy (Incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed by the Company on April 4, 2024) 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Portions of this exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is not material and would likely cause competitive harm to the Company if publicly disclosed. ** Indicates a management contract or a compensatory plan or agreement. *** Filed herewith. **** Furnished herewith. Item 16. Form 10-K Summary None. 106 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized. BIOMX INC. Dated: March 25, 2025 By: /s/ Jonathan Solomon Name: Jonathan Solomon Title: Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. Signature Title Date /s/ Jonathan Solomon Chief Executive Officer March 25, 2025 Jonathan Solomon (Principal Executive Officer) and Director /s/ Marina Wolfson Chief Financial Officer March 25, 2025 Marina Wolfson (Principal Financial Officer and Principal Accounting Officer) /s/ Russell Greig Chairman of the Board of Directors March 25, 2025 Dr. Russell Greig /s/ Susan Blum Director March 25, 2025 Susan Bloom /s/ Jesse Goodman Director March 25, 2025 Dr. Jesse Goodman /s/ Jonathan Leff Director March 25, 2025 Jonathan Leff /s/ Gregory Merril Director March 25, 2025 Gregory Merril /s/ Alan Moses Director March 25, 2025 Dr. Alan Moses /s/ Edward Williams Director March 25, 2025 Edward Williams 107 BIOMX INC. CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2024 CONTENTS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name: Kesselman & Kesselman C.P.A.s , PCAOB ID: 1309 ) F-2 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets F-4 - F-5 Consolidated Statements of Operations F-6 Consolidated Statements of Changes in Stockholders’ Equity F-7 Consolidated Statements of Cash Flows F-8 - F-9 Notes to the Consolidated Financial Statements F-10 - F-40 F- 1 Report of Independent Registered Public Accounting Firm To the Board of Directors and stockholders of BiomX Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of BiomX Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for the years then ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1C to the consolidated financial statements, the Company has incurred significant losses and negative cash flows from operations, incurred an accumulated deficit, and has stated that these events or conditions raise substantial doubt on the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1C. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F- 2 Intangible asset initial valuation and impairment assessment As described in Notes 1D and 2R to the consolidated financial statements, as part of a business combination, on March 15, 2024 the Company recognized an intangible asset consisting of in-process research and development ("IPR&D") valued at $15.3 million. As of December 31, 2024, the IPR&D balance was $12 million. Management conducts an impairment test at least annually, on the last day of the third quarter of the fiscal year or whenever there is an indication that the asset may be impaired. Potential impairment is identified by comparing the fair value of the IPR&D to its carrying value. As of December 31, 2024, management noted that an indicator of potential impairment existed due to a decline in the market capitalization. As a result, management performed a quantitative assessment and recorded an intangible asset impairment charge of $3.2 million. Fair value is estimated by management using a discounted cash flow model. Management's cash flow projections included significant judgments and assumptions relating to amount and timing of projected future cash flows and discount rates. The principal considerations for our determination that performing procedures relating to the Intangible asset's initial valuation and impairment assessment is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the intangible asset; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management's significant assumptions related to amount and timing of projected future cash flows and discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) testing management’s process for developing the fair value estimate; (ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness and accuracy of the underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the amount and timing of projected future cash flows and discount rates. Evaluating management’s assumptions related to the amount and timing of projected future cash flows and discount rates involved evaluating whether the assumptions used by management were reasonable considering the consistency with external market and industry data. Professionals with specialized skill and knowledge were used to assist in the evaluating (i) the appropriateness of the discounted cash flow model and (ii) the reasonableness of the discount rates assumption. /s/ Kesselman & Kesselman Certified Public Accountants (Isr.) A member of PricewaterhouseCoopers International Limited Tel-Aviv, Israel March 25, 2025 We have served as the Company’s auditor since 2021. F- 3 BIOMX INC. CONSOLIDATED BALANCE SHEETS (USD in thousands, except share and per share data) As of December 31, 2024 2023 ASSETS Current assets Cash and cash equivalents 16,856 14,907 Restricted cash 958 957 Other current assets 2,706 1,768 Total current assets 20,520 17,632 Non-current assets Non-current restricted cash 161 - Operating lease right-of-use assets 5,457 3,495 Property and equipment, net 5,045 3,902 In-process Research and development (“IPR&D”) asset 12,050 - Total non-current assets 22,713 7,397 43,233 25,029 The accompanying notes are an integral part of the consolidated financial statements. F- 4 BIOMX INC. CONSOLIDATED BALANCE SHEETS (USD in thousands, except share and per share data) As of December 31, 2024 2023 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Trade account payables 1,882 1,381 Current portion of lease liabilities 1,130 666 Other account payables 5,255 3,344 Current portion of long-term debt - 5,785 Total current liabilities 8,267 11,176 Non-current liabilities Contract liability - 1,976 Long-term debt, net of current portion - 5,402 Operating lease liabilities, net of current portion 8,454 3,239 Other liabilities 77 155 Private Placement Warrants 2,287 - Total non-current liabilities 10,818 10,772 Commitments and Contingencies (Note 8) Stockholders’ equity Preferred Stock, $ 0.0001 par value; Authorized - 1,000,000 shares as of December 31, 2024 and December 31, 2023. Issued and outstanding – 147,735 as of December 31, 2024. No shares issued and outstanding as of December 31, 2023. 18,645 - Common stock, $ 0.0001 par value (“Common Stock”); Authorized - 750,000,000 shares as of December 31, 2024 and 120,000,000 shares as of December 31, 2023. Issued and outstanding – 18,176,661 and 4,723,380 as of December 31, 2024 and December 31, 2023, respectively. (*) 6 3 Additional paid in capital 186,194 166,048 Accumulated deficit ( 180,697 ) ( 162,970 ) Total Stockholders’ equity 24,148 3,081 43,233 25,029 (*) All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split as discussed in Note 12A. The accompanying notes are an integral part of the consolidated financial statements. F- 5 BIOMX INC. CONSOLIDATED STATEMENTS OF OPERATIONS (USD in thousands, except share and per share data) Year ended December 31, 2024 2023 Research and development (“R&D”) expenses, net 24,663 16,698 General and administrative expenses 11,776 8,650 Goodwill impairment 801 - IPR&D impairment 3,237 - Long-lived assets impairment 4,046 - Operating loss 44,523 25,348 Other income ( 2,143 ) ( 357 ) Interest expenses 873 2,404 Finance expense (income), net 919 ( 1,249 ) Income from change in fair value of Private Placement Warrants ( 26,458 ) - Loss before tax 17,714 26,146 Tax expenses 13 23 Net Loss 17,727 26,169 Basic loss per share of Common Stock 1.47 5.1 Diluted loss per share of Common Stock 3.36 5.1 Weighted average number of shares used in computing basic loss per share of Common Stock (*) 12,019,401 5,133,093 Weighted average number of shares used in computing diluted loss per share of Common Stock (*) 13,138,106 5,133,093 (*) All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split as discussed in Note 12A. The accompanying notes are an integral part of the consolidated financial statements. F- 6 BIOMX INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (USD in thousands, except share and per share data) Redeemable Convertible Preferred Shares Common stock (****) Additional paid in Accumulated Total Stockholder’ Shares Amount Shares Amount capital deficit equity Balance as of January 1, 2023 3,123,044 2 157,838 ( 136,801 ) 21,039 Issuance of Common Stock and warrants under Private Investment in Public Equity, net of $ 333 issuance costs (**) 1,599,746 1 7,151 - 7,152 Reissuance of treasury stock (***) 570 - - - - Stock-based compensation expenses - - 1,059 - 1,059 Issuance of Common Stock under Open Market Sales Agreement (**) 20 * * - * Net loss - - - ( 26,169 ) ( 26,169 ) Balance as of December 31, 2023 - - 4,723,380 3 166,048 ( 162,970 ) 3,081 Issuance of Common Stock, Merger Warrants and Redeemable Convertible Preferred Shares upon the APT acquisition, net of issuance cost (**) 40,470 12,561 916,497 1 3,227 - 15,789 Exercise of Pre-Funded Warrants into shares of Common Stock 1,458,638 1 5 - 6 Issuance of Common Stock under an Open Market Offering Agreement, net of $ 1 issuance costs (**) 7,518 * 19 - 19 Issuance of Redeemable Convertible Preferred Shares upon March 2024 PIPE, net of issuance costs (**) 216,417 19,859 - - 541 - 20,400 Redeemable Convertible Preferred Shares conversion into shares of Common Stock ( 109,152 ) ( 13,775 ) 10,915,200 1 13,774 - Issuance of Common Stock upon restricted stock units (“RSUs”) vesting 155,429 * * Stock-based compensation expenses 2,580 2,580 Net loss ( 17,727 ) ( 17,727 ) Balance as of December 31, 2024 147,735 18,645 18,176,661 6 186,194 ( 180,697 ) 24,148 (*) Less than $1. (**) See note 12A. (***) See note 7A. (****) All share amounts have been retroactively adjusted to reflect a 1-for-10 reverse share split as discussed in Note 12A. The accompanying notes are an integral part of the consolidated financial statements. F- 7 BIOMX INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (USD in thousands, except share and per share data) Year ended December 31, 2024 2023 CASH FLOWS – OPERATING ACTIVITIES Net loss ( 17,727 ) ( 26,169 ) Adjustments required to reconcile net loss to cash flows used in operating activities Depreciation 1,803 871 Stock-based compensation 1,848 1,059 Amortization of debt issuance costs - 567 Finance income, net ( 435 ) ( 128 ) Revaluation of contingent consideration ( 78 ) ( 33 ) Income from change in fair value of Private Placement Warrants ( 26,458 ) - Private Placement Warrants issuance cost 732 - Changes in contract liability ( 1,976 ) - Loss from sale and disposal of fixed assets, net 221 71 Goodwill impairment 801 - IPR&D impairment 3,237 - Long-lived assets impairment 4,046 - Changes in operating assets and liabilities: Other current assets 842 819 Trade account payables ( 3,167 ) 556 Other account payables ( 984 ) 1,194 Net change in operating leases 316 ( 93 ) Net cash used in operating activities ( 36,979 ) ( 21,286 ) CASH FLOWS – INVESTING ACTIVITIES Cash and restricted cash acquired from the APT acquisition 663 - Proceeds from short-term deposits - 2,000 Purchase of property and equipment ( 30 ) ( 50 ) Proceeds from sale of property and equipment 82 1 Net cash provided by investing activities 715 1,951 CASH FLOWS – FINANCING ACTIVITIES Issuance of Common Stock and warrants under February 2023 PIPE - 7,485 Issuance costs from February 2023 PIPE - ( 333 ) Pre-Funded Warrants exercise 6 - Issuance of Common Stock under Open Market Sales Agreement, net of issuance costs 19 - Repayment of long-term debt ( 10,747 ) ( 4,253 ) Issuance of Private Placement Warrants under March 2024 PIPE 28,745 - Issuance of Redeemable Convertible Preferred Shares under March 2024 PIPE 21,269 - March 2024 PIPE issuance costs ( 918 ) - Net cash provided by financing activities 38,374 2,899 Increase (decrease) in cash and cash equivalents and restricted cash 2,110 ( 16,436 ) Effect of exchange rate changes on cash and cash equivalents and restricted cash 1 6 Cash and cash equivalents and restricted cash at the beginning of the year 15,864 32,294 Cash and cash equivalents and restricted cash at the end of the year 17,975 15,864 The accompanying notes are an integral part of the consolidated financial statements. F- 8 BIOMX INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (USD in thousands, except share and per share data) Year ended December 31, 2024 2023 RECONCILIATION OF AMOUNTS ON CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents 16,856 14,907 Restricted cash 1,119 957 Total cash and cash equivalents and restricted cash 17,975 15,864 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest 1,442 1,873 Taxes paid 13 54 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES: Property and equipment purchases included in accounts payable 1 5 Issuance cost from March 2024 PIPE 1,273 - Issuance of Common Stock under the APT acquisition 3,041 - Issuance of Redeemable Convertible Preferred Shares under the APT acquisition 12,610 - Issuance of Merger Warrants under the APT acquisition 200 - Redeemable Convertible Preferred Shares conversion into shares of Common Stock 13,774 - The accompanying notes are an integral part of the consolidated financial statements. F- 9 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 - GENERAL A. General information: BiomX Inc., (individually, and together with its subsidiaries, BiomX Ltd. (“BiomX Israel”), RondinX Ltd. and Adaptive Phage Therapeutics LLC, (“APT”), the “Company” or “BiomX”) was incorporated as a blank check company on November 1, 2017, under the laws of the state of Delaware, for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. On October 29, 2019, the Company merged with BiomX Israel, who survived the merger as a wholly owned subsidiary of BiomX Inc. The Company acquired all outstanding shares of BiomX Israel. In exchange, shareholders of BiomX Israel received 1,506,906 shares of the Company’s Common Stock, representing 65 % of the total shares issued and outstanding after the acquisition (“Recapitalization Transaction”). BiomX Israel was deemed the “accounting acquirer” due to the largest ownership interest in the Company. The Company’s shares of Common Stock are traded on the NYSE American under the symbol PHGE. BiomX is developing both natural and engineered phage cocktails designed to target and destroy harmful bacteria in chronic diseases, focusing its efforts, at this point, on cystic fibrosis and diabetic foot osteomyelitis. BiomX discovers and validates proprietary bacterial targets and customizes phage compositions against these targets. The Company’s headquarters are located in Ness Ziona, Israel. On March 6, 2024, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Adaptive Phage Therapeutics Inc., a Delaware corporation (“APT”), and certain other parties, as a result of which APT became a wholly-owned subsidiary of the Company (the “Acquisition”). See note 1D for further information regarding the Acquisition. Additionally, on March 15, 2024, concurrently with the consummation of the Acquisition, the Company consummated a private placement (the “March 2024 PIPE”) with certain investors for aggregate gross proceeds of approximately $ 50,000 . See Note 12A for further information regarding the March 2024 PIPE. On August 8, 2024, the Board of Directors approved a 1-for-10 reverse stock split of the Company’s shares of Common Stock (the “Reverse Split”), effective on August 26, 2024. See Note 12A for further information. B. The war with Hamas and Hezbollah On October 7, 2023, an unprecedented attack was launched against Israel by terrorists from the Hamas terrorist organization that infiltrated Israel’s southern border from the Gaza Strip and in other areas within the state of Israel attacking civilians and military targets while simultaneously launching extensive rocket attacks on the Israeli population. These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers. In response, the Security Cabinet of the State of Israel declared war against Hamas and a military campaign against these terrorist organizations commenced in parallel to their continued rocket and terror attacks. In addition, Hezbollah, an Islamist terrorist group that controls large portions of southern Lebanon, and Iran attacked military and civilian targets in Israel, both directly and through proxies such as the Houthi movement in Yemen, armed groups in Iraq and other terrorist organizations. Additionally, following the fall of the Assad regime in Syria, Israel has conducted limited military operations targeting certain Syrian military assets, Iranian military assets and infrastructure linked to Hezbollah and other Iran-supported groups. Although a ceasefire agreement has been reached with Lebanon (with respect to Hezbollah) there is no assurance that this agreement will be upheld. Military activity and hostilities continue to exist at varying levels of intensity, and the situation remains volatile, with the potential for escalation into a broader regional conflict involving additional terrorist organizations and possibly other countries. Furthermore, the fall of the Assad regime in Syria may create additional geopolitical instability in the region. BiomX headquarters are located in Ness Ziona, Israel, as well as most of its operations. In addition, most of the key employees and officers are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect its business. While a few employees of the Company were called to reserve duty in the Israel Defense Forces, the ongoing war with Hamas and Hezbollah has not, since its inception, materially impacted BiomX’s business or operations. Furthermore, BiomX does not expect any delays to its programs as a result of the situation. However, since this is an event beyond the Company’s control, its continuation or cessation may affect our expectations. The Company continues to monitor its ongoing activities and will make any needed adjustments to ensure continuity of its business. F- 10 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 - GENERAL (Cont.) C. Going concern The Company has incurred significant losses and negative cash flows from operations and incurred an accumulated deficit of $ 180,697 as of December 31, 2024. These are expected to continue in the foreseeable future. The Company plans to continue to fund its ongoing operations, as well as other development activities relating to additional product candidates, through issuance of debt and/or equity securities, loans, and government grants. Management believes that its current funds, including the $ 12,000 raised in February 2025 as described in Note 19, are not sufficient to fund its operations for at least one year from the issuance date of these financial statements. Increased research and development, clinical, or operating expenses may require additional funding or expense postponement. The Company’s ability to raise capital is subject to market conditions and other aspects, which may affect the terms and availability of such funding. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that may result from the outcome of such circumstances. D. Merger Agreement On March 6, 2024, the Company, entered into the Merger Agreement with BTX Merger Sub I, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“First Merger Sub”), BTX Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Second Merger Sub”), and APT. Pursuant to the Merger Agreement, First Merger Sub merged with and into APT, with APT being the surviving corporation and becoming a wholly owned subsidiary of the Company (the “First Merger”). Immediately following the First Merger, APT merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity. APT was a U.S.-based privately held, clinical-stage biotechnology company pioneering the development of phage-based therapies to combat bacterial infection. As a result of the Acquisition, the Company has a pipeline that includes two Phase 2 assets each aimed at treating serious infections with unmet medical needs. On March 15, 2024, the effective date of the Acquisition (the “Closing Date”), APT’s former stockholders were issued an aggregate of 916,497 shares of the Company’s Common Stock, 40,470 Redeemable Convertible Preferred Shares and Warrants to purchase up to an aggregate of 216,650 shares of the Company Common Stock (“Merger Warrants”). Each share of Redeemable Convertible Preferred Shares is convertible into an aggregate of 100 shares, after giving effect to the Reverse Split of Common Stock. The Merger Warrants became exercisable at any time after the date of the receipt of BiomX stockholder approval, which was obtained on July 9, 2024, at an exercise price of $ 50.00 per share and will expire on January 28, 2027 . On July 9, 2024, the Company’s stockholders approved the conversion of the Redeemable Convertible Preferred Shares into shares of Common Stock and the issuance of shares of Common Stock upon the exercise of the Merger Warrants. The Redeemable Convertible Preferred Shares are entitled to receive dividends on shares of the Redeemable Convertible Preferred Shares equal to, on an as-if-converted-to Common-Stock basis, and in the same form as, dividends actually paid on shares of the Common Stock. Except as otherwise required by law or with respect to the Redeemable Convertible Preferred Shares protective provisions set forth in the Company’s Certificate of Designations, the Redeemable Convertible Preferred Shares does not have voting rights. At the Closing Date, the Redeemable Convertible Preferred Shares were classified as temporary equity in accordance with the provisions of ASC 480-10-S99, as they included clauses that could constitute redemption clauses that were subject to the Company’s stockholder approval and outside of the Company’s control. On July 9, 2024 the Company’s stockholders approved, among other things, the conversion of the Redeemable Convertible Preferred Shares into shares of Common Stock, which led the Company to determine that the Redeemable Convertible Preferred Shares meet the definition of permanent equity as the Company is able to control the redemption. Therefore, the Redeemable Convertible Preferred Shares were reclassified as equity. On July 15, 2024, 109,152 Redeemable Convertible Preferred Shares that were issued under the Acquisition and the March 2024 PIPE were converted into 10,915,200 shares of the Company’s Common Stock according to beneficial ownership limitations set by certain investors. Immediately following the Acquisition, and without taking into account the PIPE Preferred Shares and the Private Placement Warrants, each as defined below, the Company’s stockholders prior to the Acquisition owned approximate 55 % the Company and APT’s stockholders prior to the Acquisition owned approximately 45 % of the Company. F- 11 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 - GENERAL (Cont.) D. Merger Agreement (Cont.) The Acquisition was accounted for in accordance with Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations,” using the acquisition method of accounting. The Company was identified as the accounting acquirer, based on the evaluation of the following facts and circumstances: ● Pursuant to the Merger Agreement, the post-Acquisition board of directors of the Company consists of seven directors, out of which the Company designated four board seats, with the Company’s chair of the board prior to the Acquisition continuing in his position, i.e. the majority of the post-closing board was designated by the Company. ● The Chief Executive Officer and the majority of management roles are held by individuals who were affiliated with the Company prior to the Acquisition. The Acquisition-related transaction costs are accounted for as expenses in the period in which the costs are incurred. For the year ended December 31, 2024, the Company incurred transaction costs of $ 888 which were included in general and administrative expenses in the consolidated statements of operations. Purchase Price Allocation The following sets forth the fair value of acquired identifiable assets and assumed liabilities of APT, after considering measurement period adjustment as described below, which includes adjustments to reflect the fair value of intangible assets acquired as of March 15, 2024: Amounts Cash and cash equivalents 509 Restricted cash 154 Other current assets 1,780 Property, plant and equipment 3,748 Operating lease right-of-use asset 7,953 IPR&D assets and Goodwill 16,088 Total assets 30,232 Trade accounts payable ( 3,667 ) Other accounts payable ( 2,895 ) Operating lease liability ( 7,819 ) Total liabilities ( 14,381 ) Total consideration 15,851 The fair value estimate for all identifiable assets and liabilities assumed is based on assumptions that market participants would use in pricing an asset, based on the most advantageous market for the asset (i.e., its highest and best use). The Company recognized intangible assets related to the Acquisition, which consist of IPR&D valued at $ 15,287 using the Multi-Period Excess Earnings Method valuation method and of goodwill valued at $ 501 . The goodwill is primarily attributed to the expected synergies from combining the operations of APT with the Company’s operations and to the assembled workforce of APT. The IPR&D is considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon successful completion of the project, IPR&D assets are reclassified to developed technology and amortized over their estimated useful lives. F- 12 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 - GENERAL (Cont.) D. Merger Agreement (Cont.) During the year ended December 31, 2024, the Company made a measurement period adjustment to the purchase price allocation, which resulted in an increase to goodwill of $ 300 . The increase resulted from a provision for a contingency not provided in the initial purchase price allocation, following a settlement agreement between APT and Oyster Point Pharma, Inc. (“Oyster”) in connection with the Collaboration and Option Agreement signed in May 2021 as discussed in Note 8A. The fair value of assets acquired and liabilities assumed have been finalized. During the year ended December 31, 2024, the Company recorded a full goodwill impairment in the amount of $ 801 and IPR&D impairment of $ 3,237 . See Note 11 for further information. These intangible assets are classified as Level 3 measurements within the fair value hierarchy. The following table summarizes the fair value of the consideration transferred to APT shareholders for the Acquisition: Amounts Common Stock 3,041 Redeemable Convertible Preferred Shares 12,610 Merger Warrants 200 15,851 The fair value of shares of Common Stock issued by the Company was determined using the Company’s closing trading price on the Closing Date adjusted by a discount for lack of marketability (“DLOM”) of 9.4 % as a registration statement was filed within 45 days. The fair value of Redeemable Convertible Preferred Shares was determined using the Company’s closing trading price on the Closing Date adjusted by a DLOM of 14.9 % as the conversion of the Redeemable Convertible Preferred Shares to shares of Common Stock was subject to the stockholder approval, which was obtained on July 9, 2024. The Company determined the fair value of the Merger Warrants using the Black-Scholes model as of the Closing Date. The main assumptions used are as follows: Underlying value of Common Stock ($) 3.7 Exercise price ($) 50 Expected volatility (%) 117.7 Expected terms (years) 2.87 Risk-free interest rate (%) 4.5 The actual APT net loss included in the Company’s consolidated statements of operations for the year ended December 31, 2024, is as follows: December 31, 2024 Net loss attributable to APT* 16,792 * Including impairments loss related to goodwill, IPR&D and long-lived assets of $ 801 , $ 3,237 and $ 4,046 , respectively. The unaudited pro forma financial information below summarizes the combined results of operations for BiomX Inc. (including its wholly owned subsidiaries, BiomX Israel and RondinX Ltd.) and APT. The unaudited pro forma financial information includes adjustments to reflect certain business combination effects, including: acquisition-related costs incurred by both parties and reversal of certain costs incurred by BiomX Inc. which would not have been incurred had the acquisition occurred on January 1, 2023. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Acquisition had taken place at the beginning of fiscal 2023. F- 13 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 1 - GENERAL (Cont.) D. Merger Agreement (Cont.) The following unaudited table provides certain pro forma financial information for the Company as if the Acquisition occurred on January 1, 2023: December 31, 2024 December 31, 2023 Net loss 17,262 45,821 * The pro forma amounts above are derived from historical numbers of the Company and APT. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies applied in the preparation of the financial statements on a consistent basis, are as follows, except for the adoption of new accounting standards: A. Basis of presentation and principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries, BiomX Israel, APT and RondinX Ltd. All intercompany accounts and transactions have been eliminated in consolidation. B. Use of estimates in the preparation of financial statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the financial statements and the amounts of expenses during the reported years. The most significant estimates in the Company’s financial statements relate to accruals for research and development expenses, valuation of stock-based compensation awards, purchase price allocation related to the Acquisition, Private Placement Warrants fair value revaluation and estimates used in the IPR&D impairment assessment for calculating the fair value of the Company’s asset. These estimates and assumptions are based on current facts, future expectations, and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. The full extent to which the Israel’s war with Hamas and Hezbollah may directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are uncertain, as well as the economic impact on local, regional, national and international markets. C. Functional currency and foreign currency translation The functional currency of the Company is the U.S. dollar (“USD”) since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. Transactions and balances originally denominated USD are presented at their original amounts. Balances in non-USD currencies are translated into USDs using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-USD transactions and other items in the consolidated statements of operations (indicated below), the following exchange rates are used: (i) for transactions – exchange rates at transaction dates or average exchange rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation and amortization) – historical exchange rates. Currency transaction gains and losses are presented in financial expense (income), net as appropriate. D. Cash and cash equivalents and restricted cash The Company considers cash equivalents to be all short-term, highly liquid investments, which include money market funds, that are not restricted as to withdrawal or use, and short-term bank deposits with original maturities of three months or less from the date of purchase that are not restricted as to withdrawal or use and are readily convertible to known amounts of cash. Restricted cash consists of funds that are contractually restricted to a credit line for outstanding short-term foreign exchange contracts and bank guarantee due to rental agreements. The Company has presented restricted cash separately from cash and cash equivalents in the consolidated balance sheets. The Company includes its restricted bank deposits in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statement of cash flows. F- 14 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) E. Concentrations of credit risk Financial instruments which potentially subject us to credit risk consist primarily of cash and cash equivalents. These amounts at times may exceed federally insured limits. We have not experienced any credit losses in such accounts and do not believe we are exposed to any significant credit risk on these funds. Most of the Company’s cash and cash equivalents and bank deposits are invested in major banks in the U.S. and Israel. Management believes that the credit risk with respect to the financial institutions that hold the Company’s cash and cash equivalents and bank deposits is low. Refer to note 2J. F. Property and equipment Property and equipment are presented at cost less accumulated depreciation. Depreciation is calculated based on the straight-line method over the estimated useful lives of the related assets or terms of the related leases, as follows: Estimated Useful Lives Laboratory equipment 7 years Computers and software 3 years Equipment and furniture 15 years Leasehold improvements Shorter of lease term or useful life G. Long-lived assets In accordance with ASC 360-10, “Impairment and Disposal of Long-Lived Assets”, management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable based on estimated future undiscounted cash flows. If so indicated, an impairment loss would be recognized for the difference between the carrying amount of the asset and its fair value. See Note 11 for information regarding impairment charges recognized during the year ended December 31, 2024. H. Income taxes The Company accounts for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. As of December 31, 2024 and 2023, the Company had a full valuation allowance against deferred tax assets. The Company is subject to the provisions of ASC 740-10-25, “Income Taxes” (“ASC 740”). ASC 740 prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a yearly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. The Company has not recorded any liability for uncertain tax positions for the years ended December 31, 2024 and 2023. The Company presents unrecognized tax benefits as a reduction to deferred tax asset where a net operating loss, a similar tax loss, or a tax credit carryforward that are available, under the tax law of the applicable jurisdiction, to offset any additional income taxes that would result from the settlement of a tax position. I. Derivative activity The Company uses foreign exchange contracts (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 consolidated statements of operations. The Company recognizes these derivative instruments as either assets or liabilities in the consolidated balance sheets at their fair value. Derivatives in a gain position are reported in other current assets in the consolidated balance sheets and derivatives in a loss position are recorded as other current liabilities in the consolidated balance sheets. As of December 31, 2024, the Company had outstanding short-term foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $ 2,413 with a fair value asset of $ 19 . As of December 31, 2023, the Company had outstanding short-term foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $ 4,136 with a fair value asset of $ 256 . F- 15 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) J. Fair value of financial instruments The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data. Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. There were no changes in the fair value hierarchy levelling during the years ended December 31, 2024 and 2023. 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: December 31, 2024 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market funds 12,251 - - 12,251 Foreign exchange contracts receivable - 19 - 19 12,251 19 - 12,270 Liabilities: Contingent consideration - - 77 77 Private Placement Warrants 2,287 2,287 - - 2,364 2,364 December 31, 2023 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market funds 11,377 - - 11,377 Foreign exchange contracts receivable - 256 - 256 11,377 256 - 11,633 Liabilities: Contingent consideration 155 155 - 155 155 The changes in the fair value of the Company’s Private Placement Warrants which are measured as Level 3 and on a recurring basis are as follows: Year ended December 31, 2024 Year ended December 31, 2023 Beginning balance - - Private Placement Warrants 28,745 - Change in fair value ( 26,458 ) - Ending balance 2,287 - F- 16 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) J. Fair value of financial instruments (Cont.) Financial instruments with carrying values approximating fair value include cash and cash equivalents, restricted cash, other current assets, trade accounts payable and other current liabilities, due to their short-term nature. The Company determined the fair value of the liabilities for the contingent consideration based on a probability discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the attainment of future clinical, developmental, regulatory, commercial and strategic milestones relating to product candidates for treatment of primary sclerosing cholangitis (“PSC”). The discount rate applied ranged from 3.58 % to 4.52 %. The contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in consolidated statements of operations. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liability. Changes in contingent consideration for the year ended December 31, 2024 resulted mainly from a change in the probability of success of the strategic milestones due to the termination of the agreement with JSR Corporation (“JSR”) concerning patent rights related to the treatment of PSC. See Note 8D for further information. Changes in contingent consideration for the year ended December 31, 2023 resulted from the passage of time and discount rate revaluation. The Company determined the fair value of the liabilities for the Private Placement Warrants using the Black-Scholes model, a Level 3 measurement, within the fair value hierarchy. The main assumptions used are as follows: December 31, 2024 December 31, 2023 Underlying value of Common Stock ($) 0.73 - Exercise price ($) 2.31 - Expected volatility (%) 120.1 - Expected terms (years) 1.5 - Risk-free interest rate (%) 4.1 - As of December 31, 2024, the IPR&D, right-of-use asset and leasehold improvements were assessed for impairment and measured at fair value, as described in Note 11 below. K. Defined contribution plans Under Israeli employment laws, employees of BiomX Israel are included under Section 14 of the Severance Compensation Act, 1963 (“Section 14”) for a portion of their salaries. Pursuant to Section 14, these employees are entitled to monthly deposits made by the Company on their behalf with insurance companies. Payments in accordance with Section 14 release the Company from any future severance payments (under the Israeli Severance Compensation Act, 1963) with respect of those employees. The aforementioned deposits are not recorded as an asset on the Company’s balance sheet, and there is no liability recorded as the Company does not have a future obligation to make any additional payments. The Company’s contributions to the defined contribution plans are charged to the consolidated statements of operations as and when the services are received from the Company’s employees. Total expenses with respect to these contributions were $ 389 and $ 426 for the years ended December 31, 2024 and 2023, respectively. The Company expects to contribute approximately $ 348 in the year ending December 31, 2025 to insurance companies in connection with its expected severance liabilities for the year. For U.S. employees the Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees of BiomX Inc in the U.S. who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company has not elected to match any of the employees’ deferral. During the years ended December 31, 2024 and 2023 the Company did not record any expenses for 401(k) match contributions. F- 17 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) L. Financial instruments When the Company issues freestanding instruments, it first analyzes the provisions of ASC 480, “Distinguishing Liabilities From Equity” (“ASC 480”) in order to determine whether the instrument should be classified as a liability, with subsequent changes in fair value recognized in the consolidated statements of operations in each period. If the instrument is not within the scope of ASC 480, the Company further analyzes the provisions of ASC 815-10 in order to determine whether the instrument is considered indexed to the entity’s own stock and qualifies for classification within equity. When the Company issues preferred shares, it first considers the provisions of ASC 480, in order to determine whether the preferred shares should be classified as a liability. If the instrument is not within the scope of ASC 480, the Company further analyzes the instrument’s characteristics in order to determine whether it should be classified within temporary equity (mezzanine) or within permanent equity in accordance with the provisions of ASC 480-10-S99. The Company reassesses the classification of a contract over its own equity under the guidance above at each balance sheet date. If classification changes as a result of events during the reporting period, the Company reclassifies the contract as of the date of the event that caused the reclassification. See Note 1D regarding the reclassification of the Redeemable Convertible Preferred Shares. When the Company issues warrants, it first considers the provisions of ASC 815-40, “Contracts in Entity’s Own Equity” (“ASC 815-40”) in order to determine whether the warrants should be classified as equity. Equity classification is permitted when warrants are indexed to the Company’s own shares and meet the classification requirements for stockholders’ equity classification under ASC 815-40. If the warrants are not within the scope of ASC 815-40, the Company accounts for the warrants in accordance with the guidance contained in Accounting Standards Codification 815 (“ASC 815”), “Derivatives and Hedging”, under which the warrants do not meet the criteria for equity treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Private Placement Warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expire, and any change in fair value is recognized in the consolidated statements of operations. See Note 12A for further information regarding the Private Placement Warrants. M. Research and development expenses, net Research and development costs are charged to statements of operations as incurred. Royalty-bearing grants from the Israeli Innovation Authority (“IIA”) and grants from the Medical Technology Enterprise Consortium (” MTEC”) are recognized at the time the Company is entitled to such grants, on the basis of the costs incurred and applied as a deduction from research and development expenses. N. Basic and diluted loss per share Basic loss per share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the year, fully vested warrants with no exercise price for the Company’s Common Stock and fully vested Pre-Funded Warrants for the Company’s Common Stock at an exercise price of $ 0.001 per share, as the Company considers these shares to be exercised for little to no additional consideration. The calculation excludes shares of Common Stock purchased by the Company and held as treasury shares. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of Common Stock outstanding during the year, plus the number of shares of Common Stock that would have been outstanding if all potentially dilutive shares of Common Stock had been issued, using the treasury stock method, in accordance with ASC 260-10 “Earnings per Share.” The Company computes net loss per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between shares of Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company considers its Redeemable Convertible Preferred Shares to be participating securities as the holders of the Redeemable Convertible Preferred Shares would be entitled to dividends that would be distributed to the holders of Common Stock, on a pro-rata basis assuming conversion of all Redeemable Convertible Preferred Shares into shares of Common Stock. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net loss for the periods presented was not allocated to the Company’s participating securities. F- 18 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) O. Stock compensation plans The Company applies ASC 718-10, “Stock-Based Payment,” (“ASC 718-10”) which requires the measurement and recognition of compensation expenses for all stock-based payment awards made to employees and directors including employee stock options under the Company’s stock plans based on estimated fair values. ASC 718-10 requires companies to estimate the fair value of stock-based payment awards granted to employees and non-employees on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense over the requisite service periods in the Company’s statements of operations using the graded vesting method. The Company accounts for share-based payment awards classified as equity awards. The Company recognizes stock-based award forfeitures as they occur rather than estimate by applying a forfeiture rate. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. The Company estimates the fair value of stock options granted as equity awards using a Black-Scholes option-pricing model. The option-pricing model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option term (the time from the grant date until the options are exercised or expire). The Company uses an average historical stock price volatility based on a combined weighted average of the Company’s historical average volatility and that of a selected peer group of comparable public companies within the biotechnology and pharmaceutical industry that were deemed to be representative of future stock price trends as the Company does not have a sufficient historical trading history of its own Common Stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected option term is calculated for all stock option grants using the “simplified” method. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company. P. Leases Under Accounting Standards Update, “Leases” (“ASC 842”), the Company determines if an arrangement is a lease at inception. Upon initial recognition, the Company recognizes a liability at the present value of the lease payments to be made over the lease term, and concurrently recognizes a right-of-use asset at the same amount of the liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in respect of the lease. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. The subsequent measurement depends on whether the lease is classified as a finance lease or an operating lease. During the reporting periods, the Company has only operating leases. Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. Lease expenses for operating leases are recognized on a straight-line basis over the lease term. The Company has made a policy election not to capitalize leases with a term of 12 months or less. In accordance with ASC 360-10, management reviews operating lease assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable based on estimated future undiscounted cash flows. If so indicated, an impairment loss would be recognized for the difference between the carrying amount of the asset and its fair value. For leased properties where the Company plans to cease use of the property, as well as have the intent and ability to sublease the property, the Company tests the right-of-use asset for impairment to determine if a loss has occurred. The carrying value of the right-of-use asset is adjusted based on the net present value of the future cash flows expected from a sublease agreement over the remaining lease term. We may record additional impairment losses when we finalize executed agreement with the sublessee. F- 19 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) Q. Business Combination The Company allocates the fair value of consideration transferred in a business combination to the assets acquired, liabilities assumed based on their fair values at the acquisition date. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. The excess of the fair value of the consideration transferred over the fair value of the assets acquired, liabilities assumed in the acquired business is recorded as goodwill. The fair value of the consideration transferred included equity securities. The allocation of the consideration transferred in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. The cumulative impact of revisions during the measurement period is recognized in the reporting period in which the revisions are identified. The Company includes the results of operations of the businesses that it has acquired in its consolidated results prospectively from the respective dates of acquisition. R. Intangible Assets Goodwill Goodwill reflects the excess of the consideration transferred at the business combination date over the fair values of the identifiable net assets acquired. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The primary items that generate goodwill include the value of the synergies between the acquired company and the Company and the acquired assembled workforce, neither of which qualifies for recognition as an intangible asset. ASC 350, ” Intangibles—Goodwill and Other” allows an entity to first assess qualitative factors to determine whether a quantitative goodwill impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value is less than its carrying amount. Otherwise, no further impairment testing is required. The Company’s goodwill is tested for impairment at least on an annual basis, on the last day of the third quarter of the fiscal year and whenever events or changes in circumstances indicate the carrying value of a reporting unit may not be recoverable. When necessary, the Company records charges for impairments of goodwill for the amount by which the carrying amount of the respective reporting unit exceeds its fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. During the year ended December 31, 2024, the Company recorded full goodwill impairment in the amount of $ 801 . See Note 11 for further information. Intangible assets IPR&D assets acquired in a business combination are recognized at fair value as of the acquisition date and subsequently accounted for as indefinite-lived intangible assets until completion or abandonment of the associated R&D efforts. Indefinite-lived intangible assets are reviewed for impairment at least annually, on the last day of the third quarter of the fiscal year or whenever there is an indication that the asset may be impaired. To conduct impairment tests of IPR&D, the fair value of the IPR&D asset is compared to its carrying value. If the carrying value exceeds its fair value, the Company records an impairment loss to the extent that the carrying value of the IPR&D asset exceeds its fair value. The Company estimates the fair value of IPR&D assets using discounted cash flow valuation models, which require the use of significant estimates and assumptions, including, but not limited to, estimating the timing of and expected costs to complete in-process projects, projecting regulatory approvals, estimating future cash flows from product sales and developing appropriate discount rates. During the year ended December 31, 2024, the Company recorded IPR&D impairment in amount of $ 3,237 . See note 11 for further information. F- 20 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Cont.) S. New accounting pronouncements Recently adopted accounting pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 “Segment Reporting: Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). This guidance expands public entities’ segment disclosures primarily by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets that are currently required annually. Public entities with a single reportable segment are required to provide the new disclosures and all the disclosures required under ASC 280, Segment Reporting. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments are required to be applied retrospectively to all prior periods presented in an entity’s financial statements. The Company adopted this new standard effective December 31, 2024. See Note 18 for disclosures related to the adoption of ASU 2023-07. Recently issued accounting pronouncements, not yet adopted In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. In November 2024, the FASB issued ASU 2024-03 “Income Statement: Reporting Comprehensive Income— Expense Disaggregation Disclosures,” which requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement, as well as disclosures about selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements disclosures. F- 21 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 3 - OTHER CURRENT ASSETS As of December 31, 2024 2023 Government institutions 74 66 Prepaid insurance 959 505 Other prepaid expenses 322 128 Grants receivables 1,171 574 Other 180 495 2,706 1,768 NOTE 4 - PROPERTY AND EQUIPMENT, NET Composition of assets, grouped by major classifications, is as follows: As of December 31, 2024 2023 Computers and software 302 525 Laboratory equipment 5,476 3,715 Equipment and furniture 318 154 Leasehold improvements 4,448 2,989 Total property and equipment 10,544 7,383 Less: Accumulated depreciation and amortization ( 5,499 ) ( 3,481 ) Total property and equipment, net 5,045 3,902 Depreciation expenses were $ 1,803 and $ 871 in the years ended December 31, 2024 and 2023, respectively. The Company incurred an impairment loss to its leasehold improvements of $ 530 associated with its right-of-use asset for the year ended December 31, 2024. Refer to Note 11 for additional information. NOTE 5 - LEASES 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. The monthly lease payments under the lease agreement are approximately $ 56 . As part of the agreement, the lessor reimbursed BiomX Israel for costs incurred for leasehold improvements by a pre-defined amount. BiomX Israel will pay back the reimbursed amount with interest during the entire contract term. As a result, the Company recognized a lease incentive asset in an amount of $ 1,030 that is deducted from the operating lease right-of-use asset. The operating lease right-of-use assets and operating lease liabilities contemplate the option period. As a part of the agreement, BiomX Israel provided a bank guarantee to the landlord in the amount of approximately $ 257 , representing four monthly lease and related payments. In August 2022, BiomX Israel entered into a sublease agreement for a portion of its office space in Ness Ziona, Israel. The agreement was for a period of two years beginning on August 15, 2022. The monthly lease payments under the agreement were approximately $ 29 . The monthly lease proceeds are recorded as other income in the consolidated statements of operations. The sublease agreement was terminated in September 2024. F- 22 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 5 - LEASES (Cont.) On August 9, 2019, APT entered into a lease agreement (the “APT Lease Agreement”) with ARE-708 Quince Orchard, LLC (the “Landlord”), for office and lab spaces in Gaithersburg, Maryland starting on September 1, 2019. On March 5, 2024, in connection with the Acquisition, APT and the Landlord, signed an amendment to the APT Lease Agreement. Pursuant to the amendment, the leased area was decreased to 25,894 square feet (the “Remaining Area”), effective as of December 31, 2024. Following the amendment, the revised monthly lease payments are approximately $ 155 . In exchange, APT was required to pay a relinquished premises fee in an amount equal to $ 1,500 within 10 business days following March 15, 2024. In addition, the Company issued the Landlord warrants (the “Landlord Warrants”) to purchase up to an aggregate of 25,000 shares of the Company’s Common Stock at an exercise price of $ 50.00 per share. The Landlord Warrants became exercisable on July 9, 2024, and will expire on January 28, 2027. The amendment also included a one-time option to early terminate the lease agreement on February 28, 2029 with respect to the Remaining Area under certain terms. The execution of the early termination will require APT to pay a termination fee of $ 3,000 . The operating lease right-of-use assets and operating lease liabilities contemplate the termination option. For the year ended December 31, 2024, the Company recognized an impairment charge in relation to its right-of-use asset. See Note 11 for further information. Lease expenses recorded in the consolidated statements of operations were $ 3,543 and $ 628 for the years ended December 31, 2024 and 2023, respectively. Supplemental cash flow information related to operating leases was as follows: Year ended December 31, 2024 Year ended December 31, 2023 Cash payments for operating leases 1,533 676 As of December 31, 2024, BiomX Israel's operating leases had a weighted average remaining lease term of 5.9 years and a weighted average discount rate of 6 %. APT’s operating leases had a weighted average remaining lease term of 4.1 years and a weighted average discount rate of 13.67 %. The maturity analyses of both operating leases as of December 31, 2024 were as follows: Operating Leases 2025 1,952 2026 1,983 2027 2,015 2028 5,048 2029 914 2030 627 Total operating lease payments 12,538 Less imputed interest ( 2,954 ) Total operating lease liability balance 9,584 F- 23 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 6 - OTHER ACCOUNT PAYABLES As of December 31, 2024 2023 Employees and related institutions 854 1,852 Accrued expenses 3,771 1,289 Government institutions 630 175 Other - 28 5,255 3,344 NOTE 7 - TRANSACTION WITH RELATED PARTIES A. In October 2019, BiomX Israel entered into a loan agreement in the amount of $ 19 with a stockholder who was subject to taxation in Israel in connection with the Recapitalization Transaction. As part of the loan agreement, 570 shares of Common Stock held by the stockholder were restricted and allocated to the Company and were accounted as an acquisition of treasury stock by the Company at an amount equal to the loan. In 2022, the loan was repaid by the stockholder to the Company. During the year ended December 31, 2023, the shares of Common Stock were transferred to the stockholder and were accounted as reissuance of treasury stock. B. Refer to note 12B regarding stock options granted to related parties. C. Refer to note 12A regarding a Securities Purchase Agreement with institutional investors. NOTE 8 - COMMITMENTS AND CONTINGENCIES A. In May 2021, APT entered into a Collaboration and Option Agreement (the “Oyster Agreement”) with Oyster, a wholly owned subsidiary of Viatris Inc., to collaborate on the use of APT’s proprietary phage technology for the treatment of certain ophthalmic diseases. Upon execution of the Agreement, Oyster paid an upfront payment of $ 500 to APT, a portion of which APT claims it has spent in the course of performing its obligations under the Oyster Agreement. In April 2022 and September 2023, APT received letters from Oyster and Viatris Inc. raising concerns about APT’s actions, including allegations that APT had breached the Oyster Agreement. On December 18, 2024, APT and Oyster signed a settlement agreement (the “Settlement Agreement”), which includes a payment of $ 300 from APT to Oyster. As of December 31, 2024, the Company has recorded a provision of $ 300 as other accounts payable in the consolidated balance sheets. On January 13, 2025, APT paid Oyster $ 300 according to the Settlement Agreement. B. In March 2022, the IIA approved an application for a total budget of NIS 13,004 thousands (approximately $ 4,094 ) in relation to the Company’s cystic fibrosis product candidate. The IIA committed to fund 30 % of the approved budget. The program is for the period beginning January 2022 through December 2022. Through December 31, 2024, the Company received NIS 1,365 thousands (approximately $ 395 ) from the IIA with respect to this program. In March 2023, the IIA approved an application for a total budget of NIS 11,283 thousands (approximately $ 3,164 ) in relation to the Company’s cystic fibrosis product candidate. The IIA committed to fund 30 % of the approved budget. The program is for the period beginning January 2023 through December 2023. Through December 31, 2024, the Company received NIS 2,783 thousands (approximately $ 768 ) from the IIA with respect to this program. F- 24 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 8 - COMMITMENTS AND CONTINGENCIES (Cont.) According to the agreements 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 the 12-month Secured Overnight Financing Rate (“SOFR”) as published on the first trading day of each calendar year. BiomX Israel may be required to pay additional royalties upon the occurrence of certain events as determined by the IIA, that are within the control of BiomX Israel. No such events have occurred or were probable of occurrence as of the balance sheet date with respect to these royalties. Repayment of the grant is contingent upon the successful completion of the BiomX Israel’s R&D programs and generating sales. BiomX Israel has no obligation to repay these grants if the R&D program fails, is unsuccessful or aborted or if no sales are generated. The Company had not yet generated sales as of December 31, 2024; therefore, no liability was recorded in these consolidated financial statements. IIA grants are recorded as a reduction of R&D expenses, net. Through December 31, 2024, total grants approved from the IIA aggregated to approximately $ 9,353 (NIS 32,068 thousands). Through December 31, 2024, BiomX Israel had received an aggregate amount of $ 8,003 (NIS 27,423 thousands) in the form of grants from the IIA. Total grants subject to royalties’ payments aggregated to approximately $ 7,418 . As of December 31, 2024, BiomX Israel had a contingent obligation to the IIA in the amount of approximately $ 8,330 including annual interest of SOFR applicable to dollar deposits. C. In June 2015, BiomX Israel entered into a Research and License Agreement (the “2015 License Agreement”) as amended with Yeda Research and Development Company Limited (“Yeda”), pursuant to which BiomX Israel received an exclusive worldwide license to certain know-how and research information related to the development, testing, manufacturing, production and sale of microbiome-based therapeutic product candidates, including candidates specified in the agreement, as well as patents, research and other rights to phage product candidates. In return, BiomX Israel is obligated to pay Yeda annual license fees of approximately $ 10 and royalties on revenues as defined in the 2015 License Agreement. In July 2019, the Company and Yeda amended the 2015 License Agreement, pursuant to which, following the closing of the Recapitalization Transaction, the Company is obligated to pay Yeda a one-time payment as described in the amendment which will not exceed 1 % of the consideration received in the event of certain mergers or acquisitions involving the Company. The Merger Agreement as described in Note 1D, does not constitute a merger or acquisition as defined in the amendment. D. Following the assignment thereof from RondinX Ltd., BiomX Israel is a party to a license agreement dated March 20, 2016 with Yeda, pursuant to which the Company has a worldwide exclusive license to Yeda’s know-how, information and patents related to the Company’s meta-genomics target discovery platform. As consideration for the license, the Company is obligated to pay annual license fees of $ 10 , subject to the terms and conditions of the agreement. Either party has the option to terminate the agreement at any time by way of notice to the other party, as outlined in the agreement. In addition, the Company is obligated to pay a royalty in the low single digits based on revenue of products. As the Company has not yet generated revenue from operations, no provision was included in the consolidated financial statements as of December 31, 2024 and 2023 with respect to the agreement. E. In December 2017, BiomX Israel signed a patent license agreement with Keio University and JSR in Japan. According to the agreement, BiomX Israel received an exclusive patent license to certain patent rights related to inflammatory bowel disease (“IBD”) In return, the Company will pay an annual license fee of between $ 15 and $ 25 subject to the terms and conditions specified in the agreement. Additionally, the Company is obligated to make additional payments based upon the achievement of clinical and regulatory milestones up to an aggregate of $ 32,100 and royalty payments based on future revenue. As the Company has not yet generated revenue from operations and the achievement of certain milestones is not probable, no provision was included in the consolidated financial statements as of December 31, 2024 and 2023 with respect to the agreement. In April 2019, BiomX Israel signed an additional patent license agreement with Keio University and JSR in Japan. According to the agreement, BiomX Israel received an exclusive sublicense by JSR to certain patent rights related to the treatment of primary sclerosing cholangitis. In return, the Company is required (i) to pay a license issue fee of $ 20 and annual license fees ranging from $ 15 to $ 25 (ii) make additional payments based upon the achievement of clinical and regulatory milestones up to an aggregate of $ 32,100 and (iii) make tiered royalty payments, in the low single digits based on future revenue. As the Company has not yet generated revenue from operations and the achievement of certain milestones is not probable, no provision was included in the consolidated financial statements as of December 31, 2024 and 2023. On January 16, 2025, the Company notified JSR of the termination of the agreement. Such termination will be effective on April 16, 2025. F- 25 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 8 - COMMITMENTS AND CONTINGENCIES (Cont.) F. On June 23, 2022 (the “Effective Date”), BiomX Israel entered into a research collaboration agreement with Boehringer Ingelheim International GmbH (“BI”) for a collaboration to identify biomarkers for IBD. Under the agreement, BiomX Israel was eligible to receive fees totaling $ 1,411 to cover costs incurred by BiomX Israel in conducting the research plan under the collaboration. The fees were paid in installments of $ 500 within 30 days of the Effective Date and three additional installments of $ 500 , $ 200 and $ 211 upon completion of certain activities under the research plan. The consideration was recorded as a reduction of R&D expenses, net in the consolidated statements of operations according to the input model method on a cost-to-cost basis. In December 2023, the Company completed its obligations with respect to this agreement, and the last installment of $ 211 was received in January 2024. As of December 31, 2024, the Company received the entire consideration of $ 1,411 . For the year ended December 31, 2024, the Company did not record any amount in relation to this agreement in the consolidated statements of operations. For the year ended December 31, 2023, the Company recorded $ 1,124 in the consolidated statements of operations as a reduction of R&D expenses. G. In October 2021, the Company entered into a Stock Purchase Agreement with a subsidiary of Maruho Co. Ltd., (“Maruho”), pursuant to which the Company issued to Maruho shares of Common Stock of the Company and granted Maruho a right of first offer to license its atopic dermatitis product candidate, BX005, in Japan. The right of first offer was supposed to commence following the availability of results from the Phase 1/2 study which were expected in 2022. Part of the consideration paid under the agreements, equal to the grant date fair value of the shares issued to Maruho was attributed to the issuance of shares. The remainder of $ 1,976 was attributed to a contract liability, to be recognized once the clinical trials related to the product candidate are completed. In April 2024, following the Acquisition, the Company decided to pause the development of BX005. As a result, the parties agreed that the right of first offer to license BX005 is no longer applicable. As a result, the Company reversed the full amount of the contract liability and recognized $ 1,976 as other income in the consolidated statements of operations for the year ended December 31, 2024. H. In November 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. The share purchase agreement included a contingent consideration mechanism. The contingent consideration is based on the attainment of future clinical, developmental, regulatory, commercial and strategic milestones relating to product candidates for treatment of primary sclerosing cholangitis or entry into qualifying collaboration agreements with certain third parties and may require the Company to issue 56,773 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 of Common Stock authorized or outstanding as of the time the payment is due, or a combination of both, up to $ 32,000 within ten years from the closing of the agreement. The Company has the discretion of determining whether milestone payments will be made in cash or by issuance of shares of Common Stock. The contingent consideration is accounted for at fair value (level 3). There were no changes in the fair value hierarchy levelling during the years ended December 31, 2024 and December 31, 2023. Refer to note 2J. The consolidated financial statements as of December 31, 2024 and 2023 include a liability with respect to this agreement in the amount of $ 77 and $ 155 , respectively, recorded as other liabilities. NOTE 9 - U.S. GOVERNMENT CONTRACTS AND GRANTS In 2019, APT entered into a Base Agreement and Research Project Award (collectively, the “Agreement”) with the U.S. Army Medical Research Acquisition Activity (“USAMRAA”) and the U.S. Army Medical Research & Development Command (“USAMRDC”) to advance personalized phage therapy from niche to broad use. Awards under the Agreement are intended to lay the groundwork for rapid advancement of personalized phage therapy to commercialization for the variety of clinical indications and bacterial pathogens representing un-met needs with a focus on infections with significant military relevance. The competitive award was granted by USAMRAA and USAMRDC in collaboration with MTEC, a 501(c)(3) biomedical technology consortium working in partnership with the U.S. Department of Defense. Since Agreement inception, APT entered into certain modifications to the Agreement to include additional activities and perform pre-clinical activities to advance the Diabetic Foot Osteomyelitis (“DFO”) clinical program. Under the Agreement, MTEC reimburses APT for approved costs as incurred that are based upon the achievement of certain milestones up to a contract value of $ 36,214 . In September 2024, the Agreement was amended to extend the period of performance to continue and complete the pre-clinical activities for the DFO clinical program, which increased the total contract value to $ 39,081 . In conjunction with this Agreement, APT was subject to an assessment fee of an amount equal up to 3 % of the total funded value of the research project award which was paid by the Company upon signing the agreement or the modifications. Under the amendment signed in September 2024, APT was subject to an assessment fee of 1 %, resulting in a payment of $ 29 to MTEC in December 2024. For the period between the Acquisition and December 31, 2024, the Company received grants of $ 3,494 from MTEC with respect to the cost reimbursement contract. During the year ended December 31, 2024, the Company recorded $ 2,614 as a reduction of R&D expenses, net. The remainder of the consideration the Company is entitled to receive is recorded as other current assets in the consolidated balance sheets. F- 26 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 10 - LONG-TERM DEBT On August 16, 2021, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), with respect to a venture debt facility. Under the Loan Agreement, Hercules provided the Company with access to a term loan with an aggregate principal amount of up to $ 30,000 (the “Term Loan Facility”), available in three tranches, subject to certain terms and conditions. The first tranche of $ 15,000 was advanced to the Company on the date the Loan Agreement was executed. The milestones for the second and third tranches were not reached and have expired. The Company was required to make interest only payments through March 1, 2023, and started then to repay the principal balance and interest in equal monthly installments. The Loan Agreement provided that the Company could prepay advances under the Loan Agreement, in whole or in part, at any time subject to a prepayment charge equal to 1.0 % after 24 months but prior to 36 months following the Closing Date. Upon prepayment or repayment of all or any of the term loans under the Term Loan Facility, the Company was required to pay an end of term charge (“End of Term Charge”) equal to 6.55 % of the total aggregate amount of the term loans being prepaid or repaid. On March 19, 2024, the Company prepaid the entire balance under the Term Loan Facility in a total of $ 10,428 . The prepayment included the End of Term Charge of $ 983 and accrued interest of $ 69 . The Company received from Hercules a waiver regarding the prepayment charge that should have been 1 % out of the prepaid principal amount that equals to $ 94 . Interest expense relating to the term loan, which is included in interest expense in the consolidated statements of operations was $ 850 and $ 2,404 for the years ended December 31, 2024 and 2023, respectively. NOTE 11 - GOODWILL, INTANGIBLE ASSET & LONG-LIVED ASSETS IMPAIRMENT Goodwill Following the APT Acquisition, the Company recognized goodwill valued at $ 801 after adjustment made during the measurement period as described in Note 1D above. In the third quarter of 2024, the Company performed a quantitative assessment for goodwill impairment, due to a decline in the Company’s stock price resulting in its market capitalization being less than the Company’s stockholders’ equity, which management concluded as an impairment indicator. The assessment utilizes the Company’s market capitalization plus an appropriate control premium. Market capitalization is determined by multiplying the outstanding number of shares of Common Stock by the Company’s stock price. The control premium is determined by utilizing publicly available data from studies for similar transactions of public companies. Based on the assessment, the Company concluded that the fair value of its reporting unit was less than its carrying value. Therefore, the Company recognized a full goodwill impairment of $ 801 for the year ended December 31, 2024. Intangible asset In the third quarter of 2024, the Company performed a quantitative assessment for its IPR&D asset, resulting from the decline in the Company’s stock price as above mentioned. The assessment indicated that the fair value of its IPR&D was higher than its carrying value and no impairment was recognized. During the fourth quarter of 2024, in light of the continued decline in the Company’s stock price, the Company reperformed a quantitative assessment for its IPR&D asset. The assessment was performed using the discounted cash flow model of the income approach. The cash flow projections included significant judgments and assumptions relating to amount and timing of projected future cash flows including, but not limited to, estimating the expected costs to complete in-process projects, projecting regulatory approvals, estimating future cash flows from product sales and developing appropriate discount rates. The Company used a discount rate of 19 % which is based on the estimated weighted-average cost of capital for APT. As a result of the impairment assessment, the Company concluded that the fair value of the IPR&D decreased below its carrying value and the Company recorded an impairment in the amount of $ 3,237 for the year ended December 31, 2024. Long-lived assets In December 2024, the Company’s management decided to cease the use of the property in Gaithersburg, Maryland and made it available for sublease. The Company considered it as an impairment indicator for impairment assessment of the right-of-use asset and related leasehold improvements as the Company considered it as one asset group for the purpose of the long-lived asset impairment assessment. Calculating the fair value of the asset group involves significant estimates and market participant assumptions. These estimates and assumptions include, among others, projected future cash flows, risk-adjusted discount rates and market conditions. The Company evaluated the future cash flows expected from a sublease agreement over the remaining lease term and concluded that the carrying value of the asset group was not recoverable as it exceeded the future net discounted cash flows that are expected to be generated from the use of the assets within the asset group. The Company recognized an impairment of $ 4,046 which was allocated to the right-of-use asset and the related leasehold improvements within the asset group on a pro rata basis using the relative carrying amounts of those assets, which resulted in impairment charges of $ 3,516 and $ 530 , respectively, during the year ended December 31, 2024 F- 27 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY A. Share Capital: Reverse Stock Split: On July 9, 2024, the Company’s stockholders approved a reverse stock split at a ratio within a range of 1-for-5 and 1-for-10 at such time as the Board of Directors shall determine, in its sole discretion, at any time before July 9, 2025. On August 8, 2024, the Board of Directors approved a 1-for-10 Reverse Stock Split of the Company’s shares of Common Stock (the “Reverse Stock Split”). On August 20, 2024, the Company filed the Certificate of Amendment with the Delaware Secretary of State to effect the Reverse Stock Split, which became effective on August 26, 2024 (the “Effective Date”). The Company’s Common Stock began trading on a Reverse Stock Split adjusted basis on the NYSE American at the opening of the markets on the Effective Date. As a result of the Reverse Stock Split, the number of shares of Common Stock outstanding was reduced from 178,958,447 shares to 18,021,173 shares. No fractional shares of Common Stock or Units were issued in connection with the Reverse Stock Split. Stockholders of the Company who otherwise were entitled to receive fractional shares or Units, because they held a number of shares or Units, as applicable, not evenly divisible by the Reverse Stock Split ratio were automatically entitled to receive an additional fraction of a share of the Common Stock or Unit, as applicable, to round up to the next whole share. As a result, 125,328 shares of Common Stock were issued. The Reverse Stock Split did not change the par value of the Common Stock nor the authorized number of shares of Common Stock, preferred stock or any series of preferred stock. Unless otherwise indicated, all amounts of issued and outstanding stock contained in the accompanying consolidated financial statements have been adjusted to reflect the 1-for-10 Reverse Stock Split for all prior periods presented. Proportional adjustments were also made to shares underlying outstanding equity awards, warrants and Redeemable Convertible Preferred Shares, and to the number of shares issued and issuable under the Company’s stock incentive plans and certain existing agreements. Authorized shares of common stock: On July 9, 2024, the Company’s stockholders approved increasing the number of authorized shares of Common Stock from 120,000,000 shares, par value $ 0.0001 per share, to 750,000,000 shares, par value $ 0.0001 per share. Preferred Stock: The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. On March 15, 2024, the Company issued 40,470 and 216,417 Redeemable Convertible Preferred Shares, par value $ 0.0001 per share, as part of the Acquisition and the March 2024 PIPE, respectively. On July 15, 2024, 109,152 Redeemable Convertible Preferred Shares were converted into 10,915,200 shares of the Company’s Common Stock. F- 28 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY (Cont.) A. Share Capital: (Cont.) Initial Public Offering: On December 18, 2018, the Company consummated its initial public offering (“IPO”) of 7,000,000 units (“Public Units”). The Public Units sold in the IPO were sold at an offering price of $ 10.00 per Public Unit, generating total gross proceeds of $ 70,000 . The Public Units each consisted of one share of Common Stock and one warrant to purchase one-half of a share of Common Stock (“Public Warrant”), with every two Public Warrants entitling the holder to purchase one share of Common Stock for $ 11.50 per full share. The Public Warrants expired on October 28, 2024 and on October 24, 2024, the Units were mandatorily separated and ceased trading on the NYSE American. Simultaneous with the consummation of the IPO, the Company consummated the private placement of an aggregate of 2,900,000 warrants (“Private Placement Warrants”). The Private Placement Warrants expired on December 13, 2023. Stock Exchange: As detailed in note 1, as part of the Recapitalization Transaction on October 28, 2019, the Company also agreed to issue 200,000 additional shares of Common Stock, on a pro rata basis, if the daily volume weighted average price of the Company’s Common Stock in any 20 trading days within a 30-trading day period prior to January 1, 2026 is greater than or equal to $ 29.00 per share (with respect to the Company’s Common Stock traded on the NYSE American). Private Investment in Public Equity: On February 22, 2023, the Company entered into a Securities Purchase Agreement to issue and sell an aggregate of 1,599,746 shares of its Common Stock and 1,461,072 pre-funded warrants (the “Pre-Funded Warrants”, and collectively, the “Securities”) at a price of $ 2.45 per share and $ 2.44 per Pre-Funded Warrant in a private placement (the “February 2023 PIPE”) for a net proceeds of approximately $ 7,152 , after deducting issuance costs of $ 333 . As of December 31, 2024, 533,031 Pre-Funded Warrants were exercised into 533,031 shares of Common Stock for total consideration of $ 6 at an exercise price of $ 0.01 per share of Common Stock, and 928,041 Pre-Funded Warrants were exercised into 925,607 shares of Common Stock through cashless mechanism with no consideration. As of December 31, 2024, there are no outstanding Pre-Funded Warrants. On March 15, 2024, in connection with the Acquisition, the Company issued to APT’s former stockholders 916,497 shares of the Company’s Common Stock, 40,470 Redeemable Convertible Preferred Shares and Merger Warrants to purchase up to an aggregate of 216,650 shares of the Company Common Stock. See Note 1D for further information. Concurrently with the consummation of the Acquisition as described in Note 1D, the Company entered into the March 2024 PIPE, pursuant to which such investors purchased an aggregate of 216,417 Redeemable Convertible Preferred Shares (“PIPE Preferred Shares”) and Private Placement Warrants to purchase up to an aggregate of 10,820,850 shares of the Company’s Common Stock, at a combined price of $ 231.10 per share of PIPE Preferred Share and an accompanying Private Placement Warrant to purchase 50 shares of common stock. The PIPE Preferred Shares and the Private Placement Warrants were issued in a private placement pursuant to an exemption from registration requirements under the Securities Act for aggregate gross proceeds of $ 50,000 . Each Private Placement Warrant’s exercise price equals to $ 2.31 , subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, became exercisable from the date of the receipt of BiomX stockholder approval, which was obtained on July 9, 2024, and will expire on July 9, 2026. Under certain circumstances, the Company may be required to pay to each holder of the Private Placement Warrants (i) an amount in cash equal to the holder’s total purchase price for the shares of Common Stock purchased (the “Buy-In Price”) or credit such holder’s balance account with the Depository Trust Company (“DTC”) for such shares of Common Stock shall terminate, or (ii) promptly honor its obligation to deliver to such holder a certificate or certificates representing such shares of Common Stock or credit such holder’s balance account with DTC, as applicable, and pay cash to such holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) Weighted Average Price (as defined in the Private Placement Warrant) on the trading day immediately preceding the exercise date. F- 29 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY (Cont.) A. Share Capital: (Cont.) The Company accounted for the Private Placement Warrants as liabilities as the Private Placement Warrants are not considered indexed to the entity’s own stock based on the provision of ASC 815. The Private Placement Warrants will be measured at fair value at inception and in subsequent reporting periods with changes in fair value recognized in the consolidated statements. The terms of the PIPE Preferred Shares are substantially the same as those of the Redeemable Convertible Preferred Shares issued under the Acquisition and were accounted for as temporary equity at the issuance date and were reclassified as equity. See Note 1D for further information. On July 15, 2024, 109,152 Redeemable Convertible Preferred Shares that were issued under the Acquisition and the March 2024 PIPE were converted into 10,915,200 shares of the Company’s Common Stock according to beneficial ownership limitations set by certain investors. In connection therewith, the Company issued warrants to purchase shares of the Company’s Common Stock to the placement agents for the March 2024 PIPE (the “Agents Warrants”). See Note 12B for further information. The Company allocated the total consideration from the issuance of the 2024 March PIPE first to the fair value of the Private Placement Warrants and then to the PIPE Preferred Shares. The Company had transaction costs of approximately $ 3,317 out of which $ 1,273 is stock-based compensation due to issuance of the Agents Warrants. The transaction costs were allocated in the same manner as the consideration. Issuance costs which were allocated to the PIPE Preferred Shares were $ 1,410 and deducted from Redeemable Convertible Preferred Shares, and issuance costs that were allocated to the Private Placement Warrants were $ 1,907 and were expensed immediately. At-the-market Sales Agreement: In December 2020, pursuant to a registration statement on Form S-3 declared effective by the Securities and Exchange Commission on December 11, 2020, the Company entered into an Open Market Issuance Sales Agreement (“ATM Agreement”) with Jefferies LLC. (“Jefferies”), which provided that, upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company could elect, from time to time, to offer and sell shares of Common Stock having an aggregate offering price of up to $ 50,000 through Jefferies acting as sales agent. During the year ended December 31, 2023, the Company sold 20 shares of Common Stock under the ATM Agreement, at an average price of $ 6.2 per share. The ATM Agreement was terminated on December 7, 2023. In December 2023, pursuant to a registration statement on Form S-3 declared effective by the Securities and Exchange Commission on January 2, 2024, the Company entered into an Open Market Offering Agreement with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which the Company may issue and sell shares of Common Stock having an aggregate offering price of up to $ 7,500 from time to time through Wainwright. The Company recorded transaction costs of $ 210 in the consolidated statements of operations. During the year ended December 31, 2024, the Company sold 7,518 shares of Common Stock under this agreement, at an average price of $ 2.71 per share, raising aggregate net proceeds of approximately $ 19 , after deducting an aggregate commission of $ 1 . On February 24, 2025, the Company suspended the Open Market Offering Agreement and the related continuous offering by the Company under its registration statement on Form S-3. F- 30 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY (Cont.) A. Share Capital: (Cont.) Warrants: As of December 31, 2024, the Company had the following outstanding warrants to purchase Common Stock issued to stockholders: Warrant Issuance Date Expiration Date Exercise Price Per Share Number of Shares of Common Stock Underlying Warrants 2021 Registered Direct Offering Warrants SPA ( July 28, 2021 ) January 28, 2027 50.00 281,251 Merger Warrants March 15, 2024 January 28, 2027 50.00 216,650 Private Placement Warrants* March 15, 2024 July 9, 2026 2.31 10,820,850 Agents Warrants March 15, 2024 July 9, 2026 2.31 952,381 12,271,132 * On February 25, 2025, the Private Placement Warrants were repriced to an exercise price of $ 0.93 per share in connection with a Securities Purchase Agreement the Company entered into. See Note 19 for further information. B. Stock-based compensation: Equity Incentive Plan: In 2015, the Board of Directors of BiomX Israel approved a plan for the allocation of options to employees, service providers, and officers (the “2015 Plan”). The options represented a right to purchase one Ordinary Share of the BiomX Israel in consideration of the payment of an exercise price. Also, 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 U.S. Internal Revenue Code as technically adjusted following the Recapitalization Transaction on October 28, 2019. As of December 31, 2024, there are no shares of Common Stock remaining for issuance under the 2015 Plan. In 2019, the Company adopted a new incentive plan (the “2019 Plan”) to grant 1,000 options, exercisable for Common 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 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 shares of Common Stock than provided herein. On July 9, 2024, the Company’s stockholders approved increasing the number of shares of Common Stock under the Company’s 2019 Plan to be equal to 15 % of the total number of fully-diluted shares of Common Stock outstanding as of the approval date, or 7,800,000 shares. As of December 31, 2024, there were 5,818,677 shares of Common Stock remaining for issuance under the 2019 Plan. On January 1, 2025, the number of shares of Common Stock available to grant under the 2019 Plan was increased by 727,066 . F- 31 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY (Cont.) B. Stock-based compensation: (Cont.) Stock Options: On March 1, 2023, the Board of Directors approved the grant of 154,300 options to 49 employees, five senior officers and three directors under the 2019 Plan, without consideration. The options were granted at an exercise price of $ 4.00 per share with a vesting period of four years . Directors and senior officers are entitled to full acceleration of their unvested options upon the occurrence of both a change in control of the Company and the end of their engagement with the Company. On August 21, 2023, the Board of Directors approved the grant of 8,200 options to two directors under the Company’s 2019 Plan, without consideration. Options were granted at an exercise price of $ 3.63 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. On October 19, 2023, the Board of Directors approved the grant of 4,100 options to one director under the 2019 Plan, without consideration. The options were granted at an exercise price of $ 3.20 per share with a vesting period of four years . Such director is entitled to full acceleration of his unvested options upon the occurrence of both a change in control of the Company and the end of his engagement with the Company. On October 29, 2023, the Board of Directors approved the grant of 15,110 options to 4 employees and one senior officer under the 2019 Plan, without consideration. The options were granted at an exercise price of $ 2.75 per share with a vesting period of four years . The senior officer is entitled to full acceleration of her unvested options upon the occurrence of both a change in control of the Company and the end of her engagement with the Company. On October 29, 2023, the Board of Directors approved a reduction in the exercise price (“the Repricing”) of each outstanding option to purchase shares of the Company’s Common Stock currently held by employees of BiomX with an original exercise price above $ 6.90 per share granted under the Company’s 2015 Employee Stock Option Plan to $ 2.75 per share. Other than the exercise price, no other terms of grant of the repriced options were changed; however, the options may not be exercised until one year after the repricing date. The reduction of the exercise price of the options was considered a type I modification according to ASC 718. As a result of the Repricing, the Company recognized immediately the incremental fair value in the amount of $ 167 as the repriced options were fully vested on October 29, 2023. F- 32 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY (Cont.) B. Stock-based compensation: (Cont.) Stock Options: (Cont.) On November 9, 2023, the Company filed with the Securities and Exchange Commission a Tender Offer Statement defining the terms and conditions of a one-time voluntary stock option exchange of certain eligible options for its employees (the “Option Exchange”). the Company offered to exchange certain out-of-the-money stock options for new stock options at an exchange ratio of between 1.4 and 3.8 surrendered options for one new option exercisable for shares of common stock with a lower exercise price. On December 11, 2023, the completion date of the Option Exchange, stock options covering an aggregate of 15,083 shares of Common Stock were tendered by eligible employees, and the Company granted new options at an exercise price of $ 2.75 , the Company’s closing stock price on December 11, 2023, covering an aggregate of 69,487 shares of Common Stock under the 2019 Plan in exchange for the tendered options. The Cancellation and new stock options grant qualifies as a “cancellation of an award accompanied by the concurrent grant of a replacement award,” as defined in ASC 718, which is accounted for as a modification. Under ASC 718, incremental compensation cost is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified. As a result of the Option Exchange, the Company will recognize an incremental stock-based compensation expense of $ 19 over the remaining vesting period of the new stock options, which is three or four years . The Company will recognize the sum of the incremental stock-based compensation expense and the remaining unrecognized compensation expense for the original awards on the modification date, over the remaining vesting period of the new stock options. On March 15, 2024, the Company issued Agents Warrants to purchase up to an aggregate of 952,381 shares of the Company’s Common Stock to the Placement Agents in connection with the March 2024 PIPE. The exercise price of the Agents Warrants is $ 2.31 per share and they became exercisable at any time after the date of the receipt of BiomX stockholder approval, which was obtained on July 9, 2024, and will expire on July 9, 2026. The Company accounted for the Agents Warrants under the scope of ASC 718-10, and treated them as issuance costs of the March 2024 PIPE as the Company considers these Warrants as consideration for receipt of Private Placement Services. The Company determined the fair value of the Agents Warrants using the Black-Scholes model as of March 5, 2024. The main assumptions used are as follows: Underlying value of Common Stock ($) 2.31 Exercise price ($) 2.31 Expected volatility (%) 100.6 Expected terms (years) 2.32 Risk-free interest rate (%) 4.4 On September 16, 2024, the Company granted 155,429 RSUs to four senior officers and one service provider. The RSUs were fully vested and issued on the grant date and are not subject to continued service to the Company. The RSUs’ fair value is the Company’s stock closing price as of the grant date, which was $ 0.99 . As of December 31, 2024, the Company has no unvested RSUs. On July 11, 2024, the Board of Directors approved the grant of 1,567,795 options to 51 employees, six senior officers and seven directors under the 2019 Plan, without consideration. Options were granted at an exercise price of $ 3.63 per share with a vesting period of four years . Directors and senior officers are entitled to full acceleration of their unvested options upon the occurrence of both a change in control of the Company and the end of their engagement with the Company. 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: 2024 2023 Underlying value of Common Stock ($) 3.63 2.8 - 4.0 Exercise price ($) 3.63 2.8 - 4.0 Expected volatility (%) 112.6 90.0 - 96.6 Expected terms of the option (years) 6.11 6.11 Risk-free interest rate (%) 4.14 4.21 - 4.98 F- 33 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 12 - STOCKHOLDERS EQUITY (Cont.) B. Stock-based compensation: (Cont.) Stock Options: (Cont.) Total fair value embodied in the options granted in 2024 and 2023 at the grant date, is estimated to be $ 4,870 and $ 552 respectively. These amounts will be recognized in statements of operations over the vesting period. As of December 31, 2024, the unrecognized compensation cost related to all unvested, equity classified stock options of $ 3,585 is expected to be recognized as an expense on a graded vesting method over a weighted-average period of 2.9 years. A summary of options granted to purchase the Company’s Common Stock under the Company’s stock option plans are as follows: For year ended December 31, 2024 Number of Options Weighted average exercise price Aggregate intrinsic value Outstanding at the beginning of period 528,112 $ 5.41 $ 72 Granted 1,567,795 3.63 Forfeited ( 85,588 ) 3.75 Expired ( 7,954 ) 4.38 Exercised - $ - Outstanding at the end of period 2,002,365 4.09 $   15 Exercisable at end of period 369,662 5.80 Weighted average remaining contractual life – years as of December 31, 2024 8.52 Warrants: As of December 31, 2024, and 2023, the Company had the following outstanding compensation related warrants to purchase Common Stock as follows: Warrant Issuance Date Expiration Date Exercise Price Per Share Number of Shares of Common Stock Underlying Warrants Private Warrants issued to scientific founders* November 27, 2017 - - 298 Landlord Warrants** March 15, 2024 January 28, 2027 50.00 25,000 25,298 * In November 2017, BiomX Israel issued 298 warrants to its founders. The warrants were fully vested at their grant date and will expire immediately prior to a consummation of an M&A transaction. The warrants did not expire as a result of the Recapitalization Transaction and have no exercise price. The Merger Agreement as described in note 1D does not apply for such M&A transaction as defined in the grant agreement. ** See Note 5 The following table sets forth the total stock-based payment expenses resulting from options, RSUs and warrants granted, included in the consolidated statements of operations: Year ended December 31, 2024 2023 Research and development expenses, net 600 369 General and administrative 1,248 690 1,848 1,059 The Company recognized stock-based compensation expenses in connection with options and RSUs granted to executive officers of the Company in the amount of $ 811 and $ 722 for the years ended December 31, 2024 and 2023, respectively. F- 34 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 13 - RESEARCH AND DEVELOPMENT EXPENSES, NET Year ended December 31, 2024 2023 Professional service and subcontractors 13,117 10,349 Salaries and related expenses 7,406 5,636 Stock-based compensation 600 369 Depreciation 1,488 782 Materials and supplies 518 930 Rent and related expenses 3,900 905 Other 222 104 27,251 19,075 Less change in contingent liabilities (see Note 8E) - ( 40 ) Less income from collaboration agreements (see Note 10E) - ( 1,272 ) Less grants from the IIA and MTEC (see Notes 8A and 9) ( 2,588 ) ( 1,065 ) 24,663 16,698 NOTE 14 - GENERAL AND ADMINISTRATIVE EXPENSES Year ended December 31, 2024 2023 Salaries and related expenses 3,101 2,714 Stock-based compensation 1,248 690 Professional services 3,227 2,289 Travel expenses 299 112 Rent and related expenses 593 298 Insurance expenses 1,379 1,577 Acquisition transaction costs 888 - Other 1,041 970 11,776 8,650 NOTE 15 - FINANCE EXPENSES (INCOME), NET Year ended December 31, 2024 2023 Exchange rate differences ( 27 ) ( 106 ) Interest income from bank deposits ( 1,048 ) ( 1,122 ) Bank fees and other 6 56 Loss (income) from foreign exchange contracts 81 ( 77 ) March 2024 PIPE transaction costs 1,907 - 919 ( 1,249 ) F- 35 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 16 - INCOME TAXES A. The Company files income tax returns in the U.S. federal jurisdiction and in state and local jurisdictions and is subject to examination by the various taxing authorities. The Company’s income tax returns since 2020 remain open and subject to examination. The statutory U.S. federal income tax rate is 21 %. As of December 31, 2024, the Company had total net operating losses in the U.S. of approximately $ 65,638 , which may be carried forward and offset against taxable income in the future. Utilization of carryforward losses and research and development tax credit carryforwards may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code due to ownership changes that may have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforward losses that can be utilized annually to offset future taxable income. APT’s carryforward losses of $ 22,131 might be subject to Section 382 limitation. B. BiomX Israel and RondinX Ltd. file income tax returns in Israel. Their tax assessments through 2018 and 2022, respectively, are deemed to be final. The statutory Israeli income tax rate is 23 %. C. As of December 31, 2024 and 2023, BiomX Israel had total carryforward losses in Israel of approximately $ 124,651 and $ 108,364 respectively, which may be offset against taxable income in the future for an indefinite period. D. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2024 and 2023. Management reevaluates the positive and negative evidence at each reporting period. E. The Company’s policy is to record estimated interest and penalties related to uncertain tax positions in income tax expense. The Company has no amounts recorded for any unrecognized tax positions, accrued interest nor penalties as of December 31, 2024 and 2023. F. On March 21, 2024, RondinX signed an agreement with the Israeli tax authority in respect to an assessment for the years 2018-2022. The agreement concluded that RondinX’s IP and employees were transferred to BiomX Israel on the acquisition date. As a result, RondinX had a capital gain equal to its carryforward losses of $ 2,785 (NIS 10,036 thousand) and no further payment will be required in respect of the years 2018-2022. A reconciliation of the U.S. federal statutory tax rate and the effective tax rate is as follow: As of December 31, 2024 2023 Statutory U.S. federal income tax rate ( 21 )% ( 21 )% U.S. vs foreign tax rate differential ( 2 ) ( 2 ) Change in deferred tax asset valuation allowance 23 23 Effective tax rate - % - % Loss before taxes on income, consists of the following: Year ended December 31, 2024 2023 United States ( 3,511 ) 6,085 Israel 21,225 20,061 17,714 26,146 F- 36 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 16 - INCOME TAXES (Cont.) Net deferred tax assets as of December 31, 2024 and 2023 consisted of the following: As of December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards 42,454 29,047 Research and development expenses, net 10,898 2,982 Lease liability 785 898 Research and development tax credits (*) 601 - Other 838 200 Total deferred tax assets 55,576 33,127 Deferred tax liabilities: Right of use assets ( 847 ) ( 964 ) IPR&D - Intangible Asset ( 127 ) - Private Placement Warrants ( 5,571 ) - Fixed assets ( 190 ) ( 16 ) Total deferred tax liabilities ( 6,735 ) ( 980 ) Valuation allowance ( 48,841 ) ( 32,147 ) Net deferred tax assets - - (*) Research and development tax credits will begin to expire in 2038. F- 37 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 17 - BASIC LOSS PER SHARE The basic and diluted net loss per share and weighted average number of shares of Common Stock used in the calculation of basic and diluted net loss per share are as follows: For the year ended December 31, 2024 2023 Basic and diluted loss per share of common stock Numerator: Net loss 17,727 26,169 Denominator: Number of shares of common stock outstanding 12,019,103 4,115,095 Number of shares upon Pre-Funded Warrants exercise - 1,017,700 Number of shares upon fully vested Warrants exercise 298 298 Total weighted-average number of shares of common stock, shares upon Pre-Funded Warrants and fully vested Warrants exercise used in computing basic loss per share 12,019,401 5,133,093 Basic loss per share of common stock 1.47 5.1 Diluted net loss per share of common stock Numerator: Net loss 17,727 26,169 Change in fair value of Private Placement Warrants 26,458 - Diluted net loss 44,185 26,169 Denominator: Weighted-average number of shares of common stock outstanding 12,019,401 5,133,093 Private Placement Warrants 1,118,705 - Total weighted-average number of shares of common stock outstanding, after giving effect to dilutive securities 13,138,106 5,133,093 Diluted net loss per share of common stock 3.36 5.1 Basic loss per share is computed on the basis of the net loss for the period divided by the weighted average number of shares of Common Stock outstanding during the period, fully vested warrants with no exercise price for the Company’s Common Stock and fully vested Pre-Funded Warrants for the Company’s Common Stock at an exercise price of $ 0.01 per share, as the Company considers these shares to be exercised for little to no additional consideration. Diluted loss per share is based upon the weighted average number of shares of Common Stock and of potential shares of Common Stock outstanding when dilutive. Potential shares of Common Stock equivalents include outstanding stock options and warrants, which are included under the treasury stock method when dilutive. The calculation of diluted loss per share as of December 31, 2024 and 2023, does not include the shares underlying the following financial instruments because their effect would be anti-dilutive: For the year ended December 31, 2024 2023 Options 2,002,365 528,071 Warrants 1,475,282 631,250 Contingent shares 200,000 200,000 Redeemable Convertible Preferred Shares 14,773,500 - F- 38 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 18 - SEGMENT INFORMATION The Company operates as a single operating segment, as a clinical stage product discovery company developing products using both natural and engineered phage technologies. The Company's chief operating decision-maker "(CODM)" is its chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated Net loss and Operating loss to monitor budget versus actual results in assessing segment performance and the allocation of resources. Significant segment expenses are presented in the Company’s consolidated statements of operations. Additional disaggregated significant segment expenses on a functional basis, that are not separately presented on the Company’s consolidated statements of operations, regularly reviewed by our CODM, include salaries and clinical trials expenses and presented below. Year ended December 31, 2024 2023 Operating expenses: Salaries and related expenses, other than share-based compensation 10,507 8,350 Clinical trials 12,301 8,270 Stock based compensation 1,848 1,059 Depreciation expenses 1,803 871 Goodwill, IPR&D and long-lived assets impairment 8,084 - Other segment items (*) 9,980 6,798 Total Operating expenses 44,523 25,348 (*) Other segment items include all remaining costs necessary to operate our business, which primarily include external professional services, rent, insurance and other administrative expenses, net of grants received. The Company's Property and equipment, as well as the Company's operating lease right-of-use assets recognized on the consolidated balance sheets were located as follows: As of December 31, 2024 2023 Israel 6,090 7,397 United States 4,412 - Total 10,502 7,397 F- 39 BIOMX INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (USD in thousands, except share and per share data) NOTE 19 - SUBSEQUENT EVENTS A. On February 25, 2025, the Company entered into a Securities Purchase Agreement with certain institutional and accredited investors, pursuant to which the Company agreed to issue and sell in a registered direct offering (the “Registered Direct Offering”) an aggregate of 2,828,283 shares of the Company’s Common Stock, pre-funded warrants (the “Registered Pre-Funded Warrants”) to purchase up to an aggregate of 805,231 shares of Common Stock (the “Pre-Funded Warrant Shares”), and in a concurrent private placement (the “Private Placement”) (a) unregistered pre-funded warrants (the “Private Pre-Funded Warrants”) to purchase up to an aggregate of 2,305,869 shares of Common Stock (the “Private Pre-Funded Warrant Shares”) and (b) unregistered warrants (the “Common Warrants”, and together with the Private Pre-Funded Warrants, the “Private Warrants”) to purchase up to an aggregate of 5,939,383 shares of Common Stock (the “Common Warrant Shares” and together with the Private Pre-Funded Warrant Shares, the “Private Warrant Shares”). Each Share (or Registered Pre-Funded Warrant in lieu thereof) is sold with an accompanying Common Warrant. Each Private Pre-Funded Warrant is sold with an accompanying Common Warrant. The combined effective purchase price of each Share (or Registered Pre-Funded Warrant in lieu thereof) and accompanying Common Warrant, and of each Private Pre-Funded Warrant and accompanying Common Warrant, is $ 0.93 . The gross proceeds to the Company from the Registered Direct Offering and Private Placement were $ 5,500 , before deducting placement agent fees and other offering expenses payable by the Company. In addition, on February 25, 2025, the Company entered into inducement letter agreements (the “Inducement Letter Agreements”) with certain holders (the “Holders”) of certain of its existing warrants to purchase an aggregate of 6,955,528 shares of Common Stock, originally issued to the Holders on March 15, 2024, having an original exercise price of $ 2.311 per share (the “Existing Warrants”). Pursuant to the Inducement Letter Agreements, the Holders agreed to exercise for cash the Existing Warrants at reduced exercise price of $ 0.93 per share (the “Warrant Exercise”) in consideration of the Company’s agreement to issue new unregistered warrants (the “New Warrants”) to purchase up to an aggregate of 6,955,528 shares of Common Stock. The New Warrants have an exercise price of $ 0.93 per share, are exercisable on the effective date of stockholder approval of the issuance of the shares of Common Stock upon exercise of the Private Warrants (the “Stockholder Approval Date”) and will expire on the five-year anniversary of the Stockholder Approval Date. The gross proceeds to the Company from the Warrant Exercise were approximately $ 6,500 prior to deducting placement agent fees and offering expenses. On February 27, 2025, the Company received the entire consideration of $ 12,000 in relation to the Securities Purchase Agreement and the Inducement Letter Agreements. B. On March 24, 2025, the Board of Directors approved cash payments equal to three-months’ salaries for three senior officers on the account of existing personal non-statutory severance agreements. The cash payment in a total of approximately $ 219 is expected to be paid during April 2025. F-40