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Item 9A. Controls and Procedures

2022-03-30 compared with 2021-03-31 · 1251 added, 1158 removed, 367 unchanged (87% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive

Officer, or CEO, and our Senior Vice President of Finance and Operations (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, 2020.

Our management, with the participation of our

Chief Executive Officer, or CEO, and our Senior Vice President of Finance and Operations (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, 2021.

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, 2021.

Management’s

Annual Report on Internal Control over Financial Reporting

Management’s Annual Report on Internal Control over Financial

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 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

1 unchanged sentence

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;

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.

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, 2020.

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

Based on that assessment under those criteria, management has determined that, as of December 31, 2020, our internal

control over financial reporting was effective.

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, 2021.

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 .

that assessment under those criteria, management has determined that, as of December 31, 2021, our internal control over financial reporting

was effective.

This Annual Report does not include an attestation

report of our independent registered public accounting firm regarding internal control over financial reporting due to an exemption

for emerging growth companies provided in the JOBS Act.

report of our independent registered public accounting firm regarding internal control over financial reporting due to an exemption for

emerging growth companies provided in the JOBS Act.

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 2020 that have materially affected, or are reasonably likely to materially affect, our 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 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial

OTHER INFORMATION

We intend to file a definitive proxy statement for our 2021

Annual General Meeting of Stockholders, or the 2021 Proxy Statement, with the SEC, pursuant to Regulation 14A, not later than 120

days after December 31, 2020.

On March 29, 2022, Mr.

Paul Sekhri informed the

Board of Directors of his resignation as a director of the Company, effective immediately.

The resignation of Mr.

Sekhri did not involve

any disagreement with the Company, the Company’s management or the Board of Directors.

DISCLOSURE REGARDING FOREIGN JURISDICITIONS THAT PREVENT

Not applicable.

We intend to file a definitive proxy statement

for our 2022 Annual General Meeting of Stockholders, or the 2022 Proxy Statement, with the SEC, pursuant to Regulation 14A, not later

than 120 days after December 31, 2021.

Accordingly, certain information required by Part III has been omitted under General Instruction

2 unchanged sentences

by reference.

DIRECTORS, EXECUTIVE OFFICERS

AND CORPORATE GOVERNANCE

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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.

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

Other Information

The remaining information required by this item will be included

in our 2021 Proxy Statement, and such required information is incorporated herein by reference into this Annual Report.

The remaining information

required by this item will be included in our 2022 Proxy Statement, and such required information is incorporated herein by reference

into this Annual Report.

EXECUTIVE COMPENSATION

The information required by this item will be included in our

2021 Proxy Statement and is hereby incorporated by reference into this Annual Report.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation

We have two equity incentive plans, the 2015 Employee Stock

Option Plan, or the 2015 Plan, and the Chardan Healthcare Acquisition Corp.

The information required by this item will be

included in our 2022 Proxy Statement and is hereby incorporated by reference into this Annual Report.

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 Employee

Stock Option Plan, or the 2015 Plan, and the Chardan Healthcare Acquisition Corp.

2019 Equity Incentive Plan, or the 2019 Plan.

2019, in connection with the Business Combination, we assumed the 2015 Plan with respect to each outstanding equity award thereunder.

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, 2020, options to purchase 2,714,066 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, 2020, there were

60,041 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, 2021, 930,813

additional shares of our Common Stock were made available for issuance pursuant to 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, 2021, options to purchase 2,466,533 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, 2021, there were 216,036 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, 2022, 1,190,129 additional shares of our Common Stock were

made available for issuance pursuant to the 2019 Plan.

For additional information regarding the 2015

2015 Plan and the 2019 Plan, as of December 31, 2020, please see Part II –

Item 8 –

Financial Statements and Supplemental

Notes to consolidated financial statements –

Note 12B –

Stock-Based Compensation.

Plan and the 2019 Plan, as of December 31, 2021, 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

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Equity compensation plans not approved by security holders

The other information required by this item will be included

under the “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”

in our 2021 Proxy Statement and is hereby incorporated by reference into this Annual Report.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be included

in our 2021 Proxy Statement and is hereby incorporated by reference into this Annual Report.

PRINCIPAL ACCOUNTANT FEES AND

The other information required by this item

will be included under the “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in

our 2022 Proxy Statement and is hereby incorporated by reference into this Annual Report.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

The information required by this item will

be included in our 2022 Proxy Statement and is hereby incorporated by reference into this Annual Report.

EXHIBITS AND FINANCIAL

STATEMENT SCHEDULES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this item will

be included in our 2022 Proxy Statement and is hereby incorporated by reference into this Annual Report.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following are filed with this report:

The financial statements listed on the Financial

Statements’

The financial statements listed on the Financial Statements’

Not applicable

The following exhibits are filed as part

of this Annual Report or are incorporated by reference.

The following exhibits are filed as part of this

Annual Report or are incorporated by reference.

EXHIBIT INDEX

Agreement (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed by the Company on

July 17, 2019)

Agreement to the Merger Agreement (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K

filed by the Company on October 11, 2019)

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 August 13, 2020)

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

Description of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended

Specimen Unit Certificate (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed by the Company on December 4, 2018)

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)

Specimen Warrant Certificate (Incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 filed by the Company on December 4, 2018)

Warrant Agreement, dated December 13, 2018 between Continental Stock Transfer & Trust Company and the Company (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed by the Company on December 18, 2018)

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)

Voting Agreement dated October 28, 2019 (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

Form of Indemnification Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company on November 12, 2020)

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)

Exclusive Patent License Agreement, dated December 15, 2017, among BiomX Ltd., Keio University and JSR Corporation, as amended (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

Exclusive Patent License Agreement, dated April 22, 2019, among BiomX Ltd., Keio University and JSR Corporation (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

Share Purchase Agreement, dated November 19, 2017, among BiomX Ltd., RondinX Ltd.

and Guy Harmelin, as the Shareholders’

Representative (Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

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 August 13, 2020)

Amended and Restated Bylaws of the Company, effective

as of October 28, 2019 (Incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K filed by the Company

on November 1, 2019)

Description of securities registered pursuant to Section

12 of the Securities Exchange Act of 1934, as amended (Incorporated by reference to Exhibit 4.1 to the Company’s

Annual Report on Form 10-K filed by the Company on March 31, 2021)

Specimen Unit Certificate (Incorporated by reference

to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed by the Company on December 4, 2018)

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)

Specimen Warrant Certificate (Incorporated by reference

to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 filed by the Company on December 4, 2018)

Warrant Agreement, dated December 13, 2018 between

Continental Stock Transfer & Trust Company and the Company (Incorporated by reference to Exhibit 4.1 to the Company’s

Current Report on Form 8-K filed by the Company on December 18, 2018)

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)

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,

Form of Indemnification Agreement (Incorporated by

reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed by the Company on November 12, 2020)

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)

Exclusive Patent License Agreement, dated December

15, 2017, among BiomX Ltd., Keio University and JSR Corporation, as amended (Incorporated by reference to Exhibit 10.7 to the Company’s

Current Report on Form 8-K filed by the Company on November 1, 2019)

Exclusive Patent License Agreement,

dated April 22, 2019, among BiomX Ltd., Keio University and JSR Corporation (Incorporated by reference to Exhibit 10.8 to the Company’s

Current Report on Form 8-K filed by the Company on November 1, 2019)

Chardan Healthcare Acquisition Corp.

2019 Equity Incentive Plan (Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

2015 Employee Stock Option Plan for Key Employees of BiomX Ltd., 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)

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)

2019 Equity Incentive

Plan (Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed by the Company on November

2015 Employee Stock Option Plan for Key Employees of

BiomX Ltd., 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)

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)

Form of Non-Qualified Stock Option Agreement (U.S.

Awards to Non-Executives) (Incorporated by reference to Exhibit 10.19 to the Company’s Periodic Report on Form 10-K filed by the Company on March 26, 2020)

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)

Form of Non-Qualified Stock Option Agreement (U.S.

Awards to Executive Officers) (Incorporated by reference to Exhibit 10.20 to the Company’s Periodic Report on Form 10-K filed by the Company on March 26, 2020)

Form of Option Agreement (Israeli Awards) (Incorporated by reference to Exhibit 10.21 to the Company’s Periodic Report on Form 10-K filed by the Company on March 26, 2020)

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)

A lease agreement dated September 7, 2020 by and among AFI Assets Ltd., AF –

SHAR Ltd., WIS, Nova Measuring Systems Ltd.

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)

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)

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)

A 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)

Open Market Sale Agreement SM , dated December 4, 2020, between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.2 of the Company’s Registration Statement on Form S-3 filed by the Company on December 4, 2020).

Subsidiaries of Company (Incorporated by reference to Exhibit 21.1 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

(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)

Open Market Sale Agreement SM , dated December

4, 2020, between the Company and Jefferies LLC (incorporated by reference to Exhibit 1.2 of the Company’s Registration Statement

on Form S-3 filed by the Company on December 4, 2020).

Loan and Security Agreement

dated August 16, 2021 by and among BiomX, Inc., BiomX Ltd., RondinX Ltd.

and Hercules Capital, Inc.

(Incorporated

by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed by the Company on August 16, 2021)

Subsidiaries of Company (Incorporated by reference

to Exhibit 21.1 to the Company’s Current Report on Form 8-K filed by the Company on November 1, 2019)

Consent of Brightman Almagor Zohar & Co., independent registered public accounting firm

Consent of Kesselman & Kesselman, Certified Public Accountants (Isr.), a member firm of PricewaterhouseCoopers International Limited

Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a).

2 unchanged sentences

Section 1350.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definition Linkbase

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase

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.

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

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.

Furnished herewith

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of

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

March 30, 2021

Pursuant to the requirements of Section 13

or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly

Jonathan Solomon

Chief Executive

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.

Russell Greig

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.

Chairman of the Board of Directors

1 unchanged sentence

Russell Greig

Jonathan Solomon

Chief Executive Officer

2 unchanged sentences

(Principal Executive Officer) and Director

Marina Wolfson

Senior Vice President of Finance and Operations

3 unchanged sentences

March 30, 2022

Jonas Grossman

March 30, 2022

3 unchanged sentences

Lynne Sullivan

March 30, 2021

Lynne Sullivan

(FORMERLY CHARDAN HEALTHCARE ACQUISITION

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021

REPORT OF INDEPENDENT REGISTERED ACCOUNTING

REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM (PCAOB name:

Kesselman & Kesselman C.P.A.s ,

PCAOB ID:1309)

REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM (PCAOB name:

Brightman Almagor Zohar & Co ,

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets

Consolidated Statements

of Operations

Consolidated Statements of Changes in Stockholders’

Consolidated Statements of Cash Flows

Notes to the 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-35

Report of Independent Registered Public Accounting

To the Board of Directors and stockholders of BiomX Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of BiomX

and its subsidiaries (the “Company”) as of December 31, 2021, and the related consolidated statements of operations,

changes in stockholders' equity and cash flows for the year then ended, 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, 2021, and the results of its operations and its cash flows for the year then ended in conformity

with accounting principles generally accepted in the United States of America.

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 audit.

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 audit of these consolidated financial statements in

accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit 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 audit 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 audit 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

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

Our audit 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 audit provides a reasonable basis for

/s/ Kesselman & Kesselman

Certified Public Accountants (Isr.)

A member of PricewaterhouseCoopers International Limited

Tel-Aviv, Israel

March 30, 2022

We have served as the Company's auditor since 2021.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets

of BiomX Inc.

(the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of comprehensive

loss, changes in stockholders’

equity and cash flows for each of the two years in the period ended December 31, 2020, and

the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in

all material respects, the financial position of the Company as of December 31, 2020 and 2019 and the results of its operations

and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally

accepted in the United States of America.

Change in Accounting Principle

discussed in Note 2 to the financial statements, effective January 1, 2019, the Company adopted the Financial Accounting Standards

Board’s new standard related to leases using the modified retrospective approach.

We have audited the accompanying consolidated balance sheet of BiomX

(the “Company”) as of December 31, 2020, the related consolidated statements of operations, changes in stockholders’

equity and cash flows for year ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2020 and the results of its operations and its cash flows for the year

ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

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 in accordance with the standards of

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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.

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s 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 audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 audit, 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 financial statements, whether due to error or fraud, and performing procedures that respond to

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis

for our opinion.

Our audit included performing procedures to assess the risks of material

misstatement of the 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 financial statements.

Our audit also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Brightman Almagor Zohar & Co.

3 unchanged sentences

March 31, 2021

have served as the Company’s auditor since 2015.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

We have served as the Company’s auditor since 2015.

In October 2021 we became the predecessor auditor.

CONSOLIDATED BALANCE SHEETS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

As of December 31,

3 unchanged sentences

Short-term deposits

Related parties

Other current assets

1 unchanged sentence

Non-current assets

Lease deposit

Operating lease right-of-use asset

Operating lease right-of-use assets

Property and equipment, net

In-process research and development (“R&D”)

Intangible assets, net

Total non-current assets

The accompanying Notes are an integral

part of the consolidated financial statements.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

The accompanying Notes are an integral part

of the consolidated financial statements.

CONSOLIDATED BALANCE SHEETS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

As of December 31,

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

1 unchanged sentence

Current portion of lease liabilities

Contract liability

Other account payables

1 unchanged sentence

Non-current liabilities

Lease liabilities, net of current portion

Contingent liabilities

Long-term debt

Operating lease liabilities, net of current portion

Other liabilities

Total non-current liabilities

Commitments and Contingent Liabilities

Stockholders’

Common stock, $0.0001 par value (“Common Stock”);

Commitments and Collaborations

Stockholders’ equity

Preferred Stock, $ 0.0001 par value;

Authorized - 1,000,000 shares as of December 31, 2021 and December 31, 2020.

No shares issued and outstanding as of December 31, 2021 and December 31, 2020.

Common stock, $ 0.0001 par value (“Common Stock”);

Authorized - 60,000,000 shares as of December 31, 2021 and 2020.

Issued - 23,270,337 and 22,862,835 as of December 31,2020

and 2019, respectively.

Issued - 29,753,238 and 23,270,337 as of December 31,2021 and 2020, respectively.

Outstanding - 29,747,538 and 23,264,637 as of December 31, 2021 and 2020, respectively.

1 unchanged sentence

Accumulated deficit

Total Stockholders’

The accompanying Notes are an integral

part of the consolidated financial statements.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

Total Stockholders’ equity

The accompanying Notes are an integral part

of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS

(USD in thousands, except share and

per share data)

Research and development expenses, net

(USD in thousands, except share and per share

Year ended December 31,

Research and development (“R&D”) expenses, net

Amortization of intangible assets

General and administrative expenses

Operating loss

Finance income, net

Loss before income tax

Interest expenses

Financial income, net

Loss before tax

Basic and diluted loss per share of Common Stock

Weighted average number of shares of Common Stock outstanding,

basic and diluted

Number of shares has

been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization

Transaction (refer to Note 1).

The accompanying Notes are an integral

part of the consolidated financial statements.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

(USD in thousands, except share and

per share data)

(pre-merger -

Stockholder’

as of January 1, 2019

of treasury stock

of shares (**)

of Recapitalization Transaction

of stock options

as of December 31, 2019

of Common Stock under Open Market Sales Agreement (***)

of stock options

as of December 31, 2020

Weighted average number of shares of Common Stock outstanding, basic and diluted

The accompanying Notes are an integral part

of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(USD in thousands, except share and per share

Additional paid in

Total Stockholder’

Balance as of January 1, 2020

Exercise of stock options

Issuance of Common Stock under Open Market Sales Agreement, net of $ 158 issuance costs (***)

Stock-based compensation expenses

Balance as of December 31, 2020

Exercise of stock options

Exercise of warrants (**)

Issuance of Common Stock under Open Market Sales Agreement, net of $ 158 issuance costs (***)

Issuance of Common Stock under Securities Purchase Agreement (“SPA”), net of $ 1,235 issuance costs (***)

Issuance of Common Stock under Stock Purchase Agreement with Maruho, net of $ 52 issuance costs (***)

Issuance of Common Stock under Securities Purchase Agreement

with CF Foundation (***)

Stock-based compensation expenses

Balance as of December 31, 2021

(*) Less than $1.

Net of issuance

expenses of $114.

Net of issuance

expenses of $158.

Number of shares

has been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization

Transaction (refer to Note 1).

The accompanying Notes are an integral

part of the consolidated financial statements.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

(**) See Note 13B(1).

(***) See Note 13A.

The accompanying Notes are an integral part

of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD in thousands, except share and

per share data)

CASH FLOWS –

OPERATING ACTIVITIES

(USD in thousands, except share and per share

Year ended December 31,

CASH FLOWS – OPERATING ACTIVITIES

Adjustments required to reconcile net loss to cash flows used in operating activities

1 unchanged sentence

Stock-based compensation

Revaluation of contingent liabilities

Amortization of debt issuance costs

Finance expense, net

Changes in other liabilities

Loss from sale of property and equipment

Changes in operating assets and liabilities:

1 unchanged sentence

Trade account payables

Contract liability

Other account payables

Operating lease liabilities

Net change in operating leases

Related parties

Net cash used in operating activities

CASH FLOWS –

INVESTING ACTIVITIES

Decrease (Increase) in short-term deposits

CASH FLOWS – INVESTING ACTIVITIES

Investment in short-term deposits

Proceeds from short -term deposits

Purchase of property and equipment

Proceeds from sale of property and equipment

Net cash provided by (used in) investing activities

CASH FLOWS –

FINANCING ACTIVITIES

Issuance of Common Stock, net of issuance costs

CASH FLOWS – FINANCING ACTIVITIES

Issuance of Common Stock under Open Market Sales Agreement, net of issuance costs

Issuance of Common Stock under registered direct offering, net of issuance costs

Proceeds from long-term debt, net of issuance costs

Outflows in connection with current assets and liabilities acquired in Recapitalization Transaction

Acquisition of treasury stock

Exercise of stock options

1 unchanged sentence

Increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at the

beginning of the year

Cash and cash equivalents and restricted cash at the

end of the year

The accompanying Notes are an integral

part of the consolidated financial statements.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at the beginning of the year

Cash and cash equivalents and restricted cash at the end of the year

The accompanying Notes are an integral part

of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(USD in thousands, except share and

per share data)

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

Recognition of right-of-use asset and lease liability upon adoption

of ASU 2016-02

Assets acquired under operating leases

Assets acquired (liabilities assumed) in Recapitalization

Current assets (excluding cash and cash equivalents)

Current liabilities

Recapitalization Transaction effect on equity

Cash acquired in connection with Recapitalization Transaction

The accompanying Notes are an integral

part of the consolidated financial statements.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP.)

(USD in thousands, except share and per share

Year ended December 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for interest

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:

Property and equipment purchases included in accounts payable and other payables

Right-of-use assets obtained in exchange for new operation lease liabilities

The accompanying Notes are an integral part

of the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

General information:

(formerly known as Chardan Healthcare

Acquisition Corp., individually prior to the Recapitalization Transaction (as defined below), and together with its subsidiaries,

and RondinX Ltd.

after the Recapitalization Transaction, the “Company”

or “BiomX”) was incorporated

as a blank check company on November 1, 2017, under the laws of the state of Delaware, for the purpose of entering into a merger,

stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or

more businesses or entities.

On July 16, 2019, the Company entered into a merger

agreement with BiomX Ltd.

(“BiomX Israel”), a company incorporated under the laws of Israel, CHAC Merger Sub Ltd.

(“Merger Sub”) and Shareholder Representative Services LLC, as amended on October 11, 2019, pursuant to which, among

other things, BiomX Israel merged with Merger Sub, with BiomX Israel being the surviving entity in accordance with the Israeli

Companies Law, 5759-1999, as a wholly owned direct subsidiary of BiomX Inc.

On October 28, 2019, the Company consummated the

acquisition of 100% of the outstanding shares of BiomX Israel (the “Recapitalization Transaction”).

Pursuant to the

aforementioned merger agreement, in exchange for all of the outstanding shares of BiomX Israel, the Company issued to the shareholders

of BiomX Israel a total of 15,069,058 shares of the Company’s Common Stock representing approximately 65% of the total shares

issued and outstanding after giving effect to the Recapitalization Transaction.

As a result of the Recapitalization Transaction,

BiomX Israel became a wholly owned subsidiary of the Company.

As the shareholders of BiomX Israel received the largest ownership

interest in the Company, BiomX Israel was determined to be the “accounting acquirer”

in the Recapitalization Transaction.

As a result, the historical financial statements of the Company were replaced with the financial statement of BiomX Israel for

all periods presented.

Following the Recapitalization Transaction, the

Company retained $60,100 held in a trust account, after redemptions of shares held by certain shareholders in connection with

the initial public offering of Chardan Healthcare Acquisition Corp.

BiomX Inc., (individually, and together with its subsidiaries,

and RondinX Ltd., the “Company” or “BiomX”) was incorporated as a blank check company on November

1, 2017, under the laws of the state of Delaware, for the purpose of entering into a merger, stock exchange, asset acquisition, stock

purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

On July 16, 2019, the Company entered into a merger agreement

with BiomX Ltd.

(“BiomX Israel”), a company incorporated under the laws of Israel, CHAC Merger Sub Ltd.

(“Merger Sub”)

and Shareholder Representative Services LLC, as amended on October 11, 2019, pursuant to which, among other things, BiomX Israel merged

with Merger Sub, with BiomX Israel being the surviving entity in accordance with the Israeli Companies Law, 5759-1999, as a wholly owned

direct subsidiary of BiomX Inc.

On October 28, 2019, the Company consummated the acquisition

of 100 % of the outstanding shares of BiomX Israel (the “Recapitalization Transaction”).

Pursuant to the aforementioned merger

agreement, in exchange for all of the outstanding shares of BiomX Israel, the Company issued to the shareholders of BiomX Israel a total

of 15,069,058 shares of the Company’s Common Stock representing approximately 65 % of the total shares issued and outstanding after

giving effect to the Recapitalization Transaction.

As a result of the Recapitalization Transaction, BiomX Israel became a wholly owned

subsidiary of the Company.

As the shareholders of BiomX Israel received the largest ownership interest in the Company, BiomX Israel was

determined to be the “accounting acquirer” in the Recapitalization Transaction.

Following the Recapitalization Transaction, the Company

retained $ 60,100 held in a trust account, after redemptions of shares held by certain shareholders in connection with the initial public

offering of Chardan Healthcare Acquisition Corp.

(refer to Note 13A).

The number of shares and instruments convertible

into shares included within these financial statements have been retroactively adjusted based on the equivalent number of shares

received by the accounting acquirer in the Recapitalization Transaction.

On October 28, 2019, the Company was renamed BiomX

and the Company’s shares of Common Stock, units, and warrants began trading on the NYSE American under the symbols

PHGE, PHGE.U, and PHGE.WS, respectively.

On February 6, 2020, the Company’s Common

Stock also began trading on the Tel-Aviv Stock Exchange.

Risk factors:

To date, the Company has not generated revenue from

its operations.

As of December 31, 2020, the Company had a cash and cash equivalents and restricted cash balance of approximately

$37,239 and short-term deposits of approximately $19,851, which management believes is sufficient to fund its operations for more

than 12 months from the date of issuance of these condensed consolidated financial statements and sufficient to fund its operations

necessary to continue development activities of its current proposed products.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

The Company’s shares of Common Stock, units, and

warrants are traded on the NYSE American under the symbols PHGE, PHGE.U, and PHGE.WS, respectively.

On February 6, 2020, the Company’s Common Stock also

began trading on the Tel-Aviv Stock Exchange.

BiomX is developing both natural and engineered phage cocktails

designed to target and destroy harmful bacteria in chronic diseases, such as cystic fibrosis, atopic dermatitis, inflammatory bowel disease

and colorectal cancer.

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 12, 2020, the World Health Organization declared

COVID-19 a global pandemic.

In an effort to contain and mitigate the spread of COVID-19, many countries have imposed unprecedented restrictions

on travel, mandatory business closures and other measures designed to mitigate the spread, leading to a substantial reduction in economic

activities in countries around the world, resulting in certain disruptions to our business throughout 2020 and in 2021.

In response to the pandemic, the Company implemented the

mandatory as well as recommended measures to safeguard the health and safety of its employees and clinical trial participants, and the

continuity of its business operations, including social distancing in its offices, a work from home policy for all employees who are

able to perform their duties remotely and restricting all nonessential travel, and the Company expects to continue to take actions as

may be required or recommended by government authorities or as the Company determines are in the best interests of its employees, clinical

trial participants and others in light of COVID-19.

As of December 31, 2021, COVID-19 has not had a material impact on the Company’s

results of operations.

However, uncertainty remains as to the potential impact of COVID-19 on its future research and development activities

and the potential for a material impact on the Company increases the longer the virus impacts certain aspects of economic activity around

The full extent to which COVID-19 will directly or indirectly impact the Company’s business, results of operations and

financial condition, including the Company’s ability to fulfill its clinical trial enrollment needs, will depend on future developments

that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain

it or treat COVID-19, as well as the economic impact on local, regional, national and international markets, the ultimate geographic

spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries,

business closures or business disruptions, the ultimate impact on financial markets and the global economy, the effectiveness of vaccines

and vaccine distribution efforts and the effectiveness of other actions taken in the United States and other countries to contain and

treat the disease.

During the second quarter of 2020, the Company updated its guidance on the timing of certain clinical milestones partly

due to the health and safety precautions the Company had taken and challenges it continues to face in clinical trial enrollment due to

It is not currently possible to predict how long the pandemic will last, what the long-term global effects will be, or the

time that it will take for economic activity to return to pre-pandemic levels, and the Company does not yet know the full impact on its

business and operations.

The Company will continue to monitor COVID-19 closely and follow health and safety guidelines as they evolve.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

GENERAL (Cont.)

Risk factors:

To date, the Company has not generated revenue from its

Based on the Company’s current cash and commitments, management believes that the Company’s current cash and

cash equivalents are sufficient to fund its operations for more than 12 months from the date of issuance of these consolidated financial

statements and sufficient to fund its operations necessary to continue development activities.

Consistent with its continuing research and development

activities, the Company expects to continue to incur additional losses for the foreseeable future.

The Company plans to continue

to fund its current operations, as well as other development activities relating to additional product candidates, through future

issuances of debt and/or equity securities and possibly additional grants from the Israel Innovation Authority (“IIA”)

and other government institutions.

The Company’s ability to raise additional capital in the equity and debt markets is dependent

on a number of factors including, but not limited to, the market demand for the Company’s Common Stock, which itself is

subject to a number of development and business risks and uncertainties, as well as the uncertainty that the Company would be

able to raise such additional capital at a price or on terms that are favorable to it.

The Company plans to continue to fund

its current operations, as well as other development activities relating to additional product candidates, through future issuances of

debt and/or equity securities, loans and possibly additional grants from the Israel Innovation Authority (“IIA”) and other

government institutions.

The Company’s ability to raise additional capital in the equity and debt markets is dependent on a number

of factors including, but not limited to, the market demand for the Company’s Common Stock, which itself is subject to a number

of development and business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional

capital at a price or on terms that are favorable to it.

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:

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:

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 and RondinX Ltd.

All intercompany accounts

and transactions have been eliminated in consolidation.

Use of estimates in the preparation of financial

The preparation of financial statements in conformity

with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities in the financial statements and the amounts of expenses during the reported years.

Actual results could differ from those estimates.

The 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 and RondinX Ltd.

All intercompany accounts and transactions

have been eliminated in consolidation.

Use of estimates in the preparation of financial statements

The preparation of financial statements in conformity with

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of

contingent assets and liabilities in the financial statements and the amounts of expenses during the reported years.

Actual results could

differ from those estimates.

Reclassification

Certain prior year amounts have been reclassified

to conform to the current year presentation.

Functional currency and foreign currency

Certain prior year amounts have been reclassified to conform

to the current year presentation.

Functional currency and foreign currency translation

The functional currency of the Company is the U.S.

dollar (“dollar”) 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 denominated in dollars

are presented at their original amounts.

Transactions and balances denominated in foreign

currencies have been re-measured to dollars in accordance with the provisions of ASC 830-10, “Foreign Currency Matters.”

All transaction gains and losses from remeasurement

of monetary balance sheet items denominated in foreign currencies are reflected in the statements of operations as financial income

or expenses, as appropriate.

(“dollar”) 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 denominated in dollars are presented

at their original amounts.

Transactions and balances denominated in foreign currencies

have been re-measured to dollars in accordance with the provisions of ASC 830-10, “Foreign Currency Matters.”

All transaction gains and losses from remeasurement of

monetary balance sheet items denominated in foreign currencies are reflected in the statements of operations as financial income or expenses,

as appropriate.

Cash and cash equivalents

The Company considers all highly liquid investments,

including unrestricted short-term bank deposits purchased with original maturities of three months or less, to be cash equivalents.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

The Company considers cash equivalents to be all short-term,

highly liquid investments, which include money market instruments, 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Concentrations of credit risk

Financial instruments which potentially subject

us to credit risk consist primarily of cash, cash equivalents, and short-term deposits.

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.

The Company uses foreign exchange contracts (mainly

option and forward contracts) to hedge cash flows from currency exposure.

These foreign exchange contracts are not designated

as hedging instruments for accounting purposes.

In connection with these foreign exchange contracts, the Company recognizes gains

or losses that offset the revaluation of the cash flows also recorded under financial expenses (income), net in the consolidated

statements of operations.

As of December 31, 2020, the Company had outstanding foreign exchange contracts in the amount of approximately

As of December 31, 2019, the Company had no outstanding foreign exchange contracts.

Financial instruments which potentially subject us to credit

risk consist primarily of cash, cash equivalents, and short-term deposits.

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

Refer to Note 2K.

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:

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:

Laboratory equipment

2 unchanged sentences

Leasehold improvements

Shorter of lease

term or useful life

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.

indicated, an impairment loss would be recognized for the difference between the carrying amount of the asset and its fair value.

For the years ended December 31, 2020 and 2019, no impairment expenses were recorded.

Shorter of lease term or useful life

Intangible assets

Intangible research and development 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 or whenever there is an indication that the asset may be impaired.

Income taxes:

The Company provides 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 bases 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, 2020 and 2019, the Company had a full valuation

allowance against deferred tax assets.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Income taxes:

Intangible research and development assets acquired in

a business combination are recognized at fair value as of the acquisition date and capitalized as an indefinite life intangible asset

until the related research and development efforts are either completed or abandoned.

In the reporting periods where they are treated

as indefinite life intangible assets, they are not amortized but rather are monitored for triggering events and tested for impairment.

Upon completion of the related research and development efforts, management determines the useful life of the intangible assets and amortizes

them accordingly.

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.

For the years ended December

31, 2021 and 2020, no impairment expenses were recorded.

The Company provides 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, 2021 and 2020, the Company had a full valuation allowance against deferred tax assets.

The Company is subject to the provisions of ASC 740-10-25,

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, 2020 and 2019.

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

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, 2020 and 2019.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

“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.

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, 2021 and 2020.

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.

December 31, 2021, the Company had outstanding foreign exchange contracts for the exchange of U.S.

dollars (“USD”) to NIS

in the amount of approximately $ 4,180 with a fair value of $ 62 .

As of December 31, 2020, the Company had outstanding foreign exchange

contracts for the exchange of USD to NIS in the amount of approximately $ 1,555 with a fair value of $ 90 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Fair value of financial instruments

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

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, 2021 and 2020.

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, 2021

1 unchanged sentence

Money market funds

Contingent liabilities

Foreign exchange contracts receivable

Contingent consideration

December 31, 2020

1 unchanged sentence

Money market funds

Contingent liabilities

Foreign exchange contracts receivable

Contingent consideration

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Fair value of financial instruments (Cont.)

Refer to Note 13A regarding the fair value of the financial

instrument that resulted from the CFF agreement.

Financial instruments with carrying values approximating

fair value include cash and cash equivalents, restricted cash, short-term deposits, other current assets, trade accounts payable

and other current liabilities, due to their short-term nature.

fair value include cash and cash equivalents, restricted cash, short-term deposits, other current assets, trade accounts payable and

other current liabilities, due to their short-term nature.

The Company determined the fair value of the liabilities

for the contingent consideration based on a probability discounted cash flow analysis.

This fair value measurement is based on significant

unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy.

The fair value of the contingent

consideration is based on several factors, such as:

the attainment of future clinical, developmental, regulatory, commercial and strategic

milestones relating to product candidates for treatment of primary sclerosing cholangitis.

The discount rate applied ranged from 0.37 %

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.

in contingent consideration for the years ended December 31, 2021 and 2020 resulted mainly from revaluation‏.

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

Pursuant to Section 14, these employees are entitled to monthly deposits made by the Company on their behalf with insurance

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

Total expenses with respect to these contributions were $567 and $381 for the years ended December 31, 2020 and 2019,

respectively.

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.

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 $ 689 and $ 567 for the years ended December 31, 2021 and 2020, respectively.

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

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

employee’s deferral.

During the years ended December 31, 2020 and 2019 the Company did not record any expenses for 401(k)

match contributions.

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 employee’s

During the years ended December 31, 2021 and 2020 the Company did not record any expenses for 401(k) match contributions.

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.

All warrants issued by the Company are classified within stockholders’ equity as "Additional paid-in capital".

Equity classification is permitted when warrants are indexed to the Company's own shares and meet the classification requirements for

stockholders’ equity classification of ASC 815-40, Accounting Standards Codification (“ASC 815-40”).

Collaborative arrangements

The Company entered into collaborative arrangements with

partners that fall under the scope of Topic 808, “Collaborative Arrangements” (“ASC 808”).

While these arrangements

are in the scope of ASC 808, the Company may analogize to ASC 606 for some aspects of the arrangements.

The Company analogizes to ASC

606, “Revenue from Contracts with Customers” (“ASC 606”) for certain activities within the collaborative arrangement

for the delivery of a good or service (i.e., a unit of account) that is part of its ongoing major or central operations.

The terms of the Company’s collaborative arrangements

typically include reimbursements or cost-sharing of R&D expenses.

Each of these payments results in an offset against R&D expenses.

Under certain collaborative arrangements, the Company has

been reimbursed for a portion of its R&D expenses or participates in the cost-sharing of such R&D expenses.

Such reimbursements

and cost-sharing arrangements have been reflected as a reduction of R&D expense in the Company’s consolidated statements of

operations, as the Company does not consider performing research and development services for reimbursement to be a part of its ongoing

major or central operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Research and development costs

1 unchanged sentence

of operations as incurred.

Royalty-bearing grants from the IIA 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.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Royalty-bearing grants from the IIA 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.

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.

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.”

Potentially dilutive shares of Common

Stock were excluded from the calculation of diluted loss per share for all periods presented due to their anti-dilutive effect

due to losses in each period.

Basic loss per share is computed by dividing net loss by

the weighted average number of shares of Common Stock outstanding during the year.

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.” Potentially dilutive shares of Common Stock were excluded from the calculation

of diluted loss per share for all periods presented due to their anti-dilutive effect due to losses in each period.

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 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.

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

1 unchanged sentence

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 recognizes compensation expense for

the fair value of non-employee awards over the requisite service period of each award.

In June 2018, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, “Compensation-Stock Compensation

Improvements to Nonemployee Stock-Based Payment Accounting,”

which simplifies the accounting for nonemployee

stock-based payment transactions by aligning the measurement and classification guidance, with certain exceptions, to that for

stock-based payment awards to employees.

The amendments expand the scope of the accounting standard for stock-based payment awards

to include stock-based payment awards granted to non-employees in exchange for goods or services used or consumed in an entity’s

own operations and supersedes the guidance related to equity-based payments to non-employees.

The Company adopted these amendments

on January 1, 2019.

The adoption of these amendments did not have a material impact on the consolidated financial statements and

related disclosures.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Stock compensation plans:

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).

Expected volatility is estimated based on volatility of similar companies in the technology

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 options granted to employees and directors using the “simplified”

Grants to non-employees are based on

the contractual term.

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.

ASU 2016-02, “Leases (Topic 842)”

issued by the FASB in February 2016.

The Company adopted this ASU 2016-02 effective January 1, 2019 using the modified retrospective

application, applying the new standard to leases in place as of the adoption date.

Prior periods have not been adjusted.

existing for the reporting period beginning January 1, 2019 are presented under ASU 2016-02.

Arrangements that are determined to be leases at

inception are recognized as long-term operating lease assets and lease liabilities in the consolidated balance sheet at lease

commencement.

Operating lease liabilities are recognized based on the present value of the future lease payments over the lease

term at commencement date.

As the rates implicit in the Company’s leases are not reasonably determinable, the Company applies

its incremental borrowing rate based on the economic environment at the commencement date in determining the present value of

future lease payments.

Lease terms include options to extend the lease when it is reasonably certain that the Company will exercise

Lease expenses for operating leases are recognized on a straight-line basis over the lease term.

The Company elected to adopt a package of practical expedients

under Topic 842 which removes the requirement to reassess whether expired or existing contracts contain leases and removes the

requirement to reassess the lease classification for any existing leases prior to the adoption date of January 1, 2019.

Additionally,

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.

Stock compensation plans (Cont.)

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).

Expected volatility is estimated based on volatility of similar companies in the technology sector.

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 options granted to employees

and directors using the “simplified” method.

Grants to non-employees are based on the contractual term.

the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company.

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.

Treasury Stock

Treasury shares are presented as a reduction of equity,

at their cost to the Company.

Recent Accounting Standards

In June 2016, the FASB issued ASU No.

2016-13, “Financial

Instruments –

Credit Losses,”

to improve information on credit losses for financial assets and net investment in leases

that are not accounted for at fair value through net income.

2016-13 replaces the current incurred loss impairment methodology

with a methodology that reflects expected credit losses.

This guidance is effective for the Company beginning on January 1, 2023,

with early adoption permitted.

The Company does not expect that the adoption of this standard will have a significant impact on

its consolidated financial statements and related disclosures.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

As an “emerging growth company,” the Jumpstart

Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable

to public companies until such pronouncements are made applicable to private companies.

The Company has elected not to use this extended

transition period under the JOBS Act.

The adoption dates referenced below reflects this election.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

(USD in thousands, except share and per share

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Recent Accounting Standards:

In August 2018, the FASB issued ASU 2018-13, “Changes

to Disclosure Requirements for Fair Value Measurements,”

which will improve the effectiveness of disclosure requirements

for recurring and nonrecurring fair value measurements.

The standard removes, modifies, and adds certain disclosure requirements

and was effective for the Company beginning on January 1, 2020.

The adoption of ASU 2018-13 had no material impact on the Company’s

Recent Accounting Standards (Cont.)

June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13,

“Financial Instruments—Credit Losses—Measurement of Credit Losses on Financial Instruments.” This guidance replaces

the current incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of

a broader range of reasonable and supportable information to inform credit loss estimates.

The guidance will be effective for smaller

reporting companies (as defined by the rules under the Securities Exchange Act of 1934, as amended) for the fiscal year beginning on

January 1, 2023, including interim periods within that year.

The Company is currently evaluating this guidance to determine the impact

it may have on its consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting

For Convertible Instruments and Contracts in an Entity's Own Equity”.

The ASU simplifies accounting for convertible instruments

by removing major separation models required under current GAAP.

Consequently, more convertible debt instruments will be reported as a

single liability instrument with no separate accounting for embedded conversion features.

The ASU removes certain settlement conditions

that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify

The ASU also simplifies the diluted net income per share calculation in certain areas.

The new guidance is effective for annual

and interim periods beginning after December 15, 2021, and early adoption was permitted for fiscal years beginning after December 15,

2020, and interim periods within those fiscal years.

The Company expects to apply modified retrospective basis adoption of this guidance,

which will not have a significant impact on the Company’s consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, “Earnings

Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic

718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40):

Issuer’s Accounting for Certain

Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”.

The guidance is effective for the Company on

January 1, 2022.

The Company expects that this guidance, will not have a significant impact on the Company’s consolidated financial

In October 2021, the FASB issued ASU 2021-08, “Business

Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires

contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition

date in accordance with ASC 606.

The guidance will result in the acquirer recognizing contract assets and contract liabilities at the

same amounts recorded by the acquiree.

The guidance should be applied prospectively to acquisitions occurring on or after the effective

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued.

The Company is

currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, “Government

Assistance (Topic 832)”, which requires annual disclosures that increase the transparency of transactions involving government

grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions

on an entity’s financial statements.

The amendments in this update are effective for financial statements issued for annual periods

beginning after December 15, 2021.

The Company expects that this guidance, will not have a significant impact on the Company’s

consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18 ,“Collaborative

Arrangements (Topic 808),”

which clarifies the interaction between Topic 808 and Topic 606, “Revenue from Contracts

with Customers.”

The Company adopted this standard on January 1, 2020.

The adoption of ASU 2018-18 had no material impact

on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No.

“Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes”

(“ASU 2019-12”), which is

intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions

to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

guidance was effective for the Company beginning on January 1, 2021, with early adoption permitted.

The adoption of ASU 2019-12

had no material impact on the Company’s consolidated financial statements.

SHORT-TERM DEPOSITS

Short-term deposits represent time deposits placed

with banks with original maturities of greater than three months but less than one year.

Interest earned is recorded as finance

income in the consolidated statements of operations during the years for which the Company held short-term deposits.

As of December 31, 2020, the Company had deposits

at Leumi Bank (Israel) and BHI USA that bore fixed annual interest between 0.51% and 1.58%.

As of December 31, 2019, the Company

has a deposit dominated in USD at BHI USA that bears fixed annual interest of 2.1%.

Short-term deposits represent time deposits placed with

banks with original maturities of greater than three months but less than one year.

Interest earned is recorded as finance income, net

in the consolidated statements of operations during the years for which the Company held short-term deposits.

As of December 31, 2021, the Company had no deposits.

of December 31, 2020, the Company had deposits in USD at Leumi Bank (Israel) and BHI USA that bore fixed annual interest between 0.51 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share

OTHER CURRENT ASSETS

4 unchanged sentences

Lease incentive

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

Grants receivables

PROPERTY AND EQUIPMENT, NET

Composition of assets, grouped by major classifications, is as follows:

As of December 31,

3 unchanged sentences

Leasehold improvements

Depreciation:

Computers and software

Laboratory equipment

Equipment and furniture

Leasehold improvements

Accumulated depreciation

Substantially all the Company’s non-current assets are concentrated

Depreciation expenses were $ 1,046 , and $ 662 in the years ended December

31, 2021 and 2020, respectively.

ACQUISITION OF SUBSIDIARY

1 unchanged sentence

agreement with the shareholders of RondinX Ltd.

In accordance with the share purchase agreement, BiomX Israel acquired 100% control

and ownership of RondinX Ltd.

In accordance with the share purchase agreement, BiomX Israel acquired 100% control and

ownership of RondinX Ltd.

for consideration valued at $4,500.

The consideration included the issuance of 250,023 Preferred

A Shares, the issuance of warrants to purchase an aggregate of 4,380 Series A-1 preferred shares, and additional contingent consideration.

The contingent consideration is based on the attainment of future clinical, developmental, regulatory, commercial and strategic

milestones relating to product candidates for treatment of primary sclerosing cholangitis or entry into qualifying collaboration

agreements with certain third parties and may require the Company to issue 567,729 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 of up to $32,000 of

the Company within ten years from the closing of the agreement and/or the entering of agreements with certain third parties or

their affiliates that include a qualifying up-front fee and is entered into within three years from the closing of the agreement.

The Company has the discretion of determining whether milestone payments will be made in cash or by issuance of shares of Common

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, 2020 and

December 31, 2019.

The consideration included the issuance of 250,023 Preferred A Shares,

the issuance of warrants to purchase an aggregate of 4,380 Series A-1 preferred shares, and additional contingent consideration.

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 567,729 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

There were no changes in the fair value hierarchy levelling during the years ended December 31, 2021 and December 31, 2020.

Refer to Note 2K.

The consolidated financial statements as of December 31,

31, 2020 and 2019 include a liability with respect to this agreement in the amount of $83 and $260, respectively.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

2021 and 2020 include a liability with respect to this agreement in the amount of $ 175 and $ 83 , respectively, recorded as other liabilities.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and

per share data)

IN-PROCESS RESEARCH AND DEVELOPMENT

(USD in thousands, except share and per share

INTANGILE ASSETS, NET

Intangible assets acquired in the RondinX Ltd.

(see Note 6) were determined to be in-process research and development (“R&D”).

In accordance with ASC 350-30-35-17A,

2 unchanged sentences

On January 1, 2020, the in-process R&D efforts were completed.

The Company had determined

the useful life of the R&D assets for three years and began amortizing these assets accordingly in the financial statements.

Amortization expenses recorded in the consolidated statements of operations were $1,518 for the year ended December 31, 2020.

Based on management’s analysis, there was no impairment for the year ended December 31, 2020.

The Company had determined the

useful life of the R&D assets for three years and began amortizing these assets accordingly.

Amortization expenses recorded in the

consolidated statements of operations were $ 1,519 and $ 1,518 for the years ended December 31, 2021 and 2020, respectively.

Based on management’s

analysis, there was no indicators for impairment for the years ended December 31, 2021 and 2020.

In May 2017, BiomX Israel entered into a lease agreement

for office space in Ness Ziona, Israel.

The agreement is for five years beginning on June 1, 2017 with an option to extend for

an additional five years.

The agreement is for five years beginning on June 1, 2017 with an option to extend for an additional

Monthly lease payments under the agreement are approximately $ 18 .

As a part of the agreement, the Company

provided a bank guarantee to the landlord in the amount of approximately $95 representing four monthly lease payments.

As of December

31, 2020, the bank guarantee expired and was not renewed.

Lease expenses recorded in the consolidated statements of operations

were $217 and $201 for the years ended December 31, 2020 and 2019, respectively.

In September 2019, BiomX Israel entered into an additional

lease agreement for office space in Ness Ziona, Israel.

The agreement is for five years beginning on September 8, 2019 with an

option to extend for an additional three years.

The option was not accounted for as part of the lease, given its low probability

of being exercised.

The agreement is for five years beginning on September 8, 2019 with an option

to extend for an additional three years.

The option was not accounted for as part of the lease, given its low probability of being exercised.

Monthly lease payments under the agreement are approximately $ 12 .

As a part of the agreement, the Company provided

a bank guarantee to the landlord in the amount of approximately $63 representing four monthly lease and related payments.

expenses recorded in the consolidated statements of operations were $141 and $18 for the years ended December 31, 2020, and 2019,

respectively.

In September 2020, BiomX Israel entered into a third

lease agreement for office space in Ness Ziona, Israel for five years beginning on September 1, 2020, with an option to extend

for an additional period until November 30, 2030.

This agreement supersedes the abovementioned May 2017 and September 2019 lease

agreements and sets the prior lease agreements’

end date to March 31, 2021.

Monthly lease payments under the new lease agreement

In September 2020, BiomX Israel entered into a third lease

agreement for office space in Ness Ziona, Israel for five years beginning on September 1, 2020, with an option to extend for an additional

period until November 30, 2030.

This agreement supersedes the abovementioned May 2017 and September 2019 lease agreements and sets the

prior lease agreements’ end date to March 31, 2021.

Monthly lease payments under the new lease agreement are approximately $ 50 .

As part of the agreement, BiomX Israel was exempted from monthly payments under the new agreement until January 15, 2021.

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.

As a part of the agreement, BiomX Israel provided a bank

guarantee to the landlord in the amount of approximately $ 270 , representing four monthly lease and related payments.

On October 1, 2020, the Company entered into a lease agreement

for office space in Branford, Connecticut, U.S., for 25 months beginning on October 5, 2020.

Monthly lease payments under the agreement

are approximately $ 4 .

As part of the agreement, BiomX Israel is exempt from monthly payments under the new agreement until January

In addition, the lessor will reimburse 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.

undertook to obtain a bank guarantee in favor of the landlord in the amount of approximately $208, representing four monthly lease

and related payments.

Lease expenses recorded in the consolidated statements of operations were $45 for the year ended December

On October 1, 2020, the Company entered into a lease

agreement for office space in Branford, Connecticut, U.S., for 25 months beginning on October 5, 2020.

Monthly lease payments under

the agreement are approximately $4.

As part of the agreement, the Company is required to deposit $8 as a security, representing

two monthly lease and related payments.

Lease expenses recorded in the consolidated statements of operations were $13 for the year

ended December 31, 2020.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

As part of the agreement, the Company deposited $ 8 as a security, representing two monthly lease and related payments.

Lease expenses recorded in the consolidated statements

of operations were $ 706 and $ 416 for the years ended December 31, 2021 and 2020, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

Cash payments for operating leases

As of December 31, 2020, the Company’s operating

As of December 31, 2021, the Company’s operating

leases had a weighted average remaining lease term of 8.9 years and a weighted average discount rate of 6 %.

The maturity analysis

of operating leases as of December 31, 2020 were as follows:

The maturity analysis of

operating leases as of December 31, 2021 were as follows:

Total operating lease payments

2 unchanged sentences

OTHER ACCOUNT PAYABLES

As of December 31,

Employees and related institutions

4 unchanged sentences

Balances with related parties

As of December 31,

Additional paid in capital (treasury stock) (See 1 below)

Related party receivable (See 2 below)

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

BALANCES AND TRANSACTION WITH RELATED PARTIES

(USD and NIS in thousands, except share and

per share data)

BALANCES AND TRANSACTION WITH RELATED PARTIES (Cont.)

Transactions with related parties

Research and development expenses (See 2 below)

BiomX Israel entered into loan agreements with

certain shareholders who were subject to taxation in Israel in connection with the Recapitalization Transaction.

are for a period of up to two years from the time of the grant, are non-recourse, and are secured by shares of Common Stock

issued to them with a value that equals three times the loan amount at the time of the grant.

If any of such shareholders

defaults on such loan, the Company will have the right to forfeit or sell such number of shares with a value equal to the

amount of the loan not timely repaid (plus interest accrued thereon), based on their market price at the time of such forfeiture

As of December 31, 2020, one loan was granted in the amount of $19, and the aggregate amount of the remaining potential

commitment as of December 31, 2020 is $89.

All other shareholders waived their right to the loans.

The number of shares of

Common Stock in respect of which the $19 loan was granted was 5,700.

The granting of the loan and the restrictions imposed

on the related Common Stock until repayment of the loan were accounted as an acquisition of treasury stock by the Company

at an amount equal to the loan.

On October 31, 2018, BiomX Israel entered into

a research collaboration agreement with Janssen Research & Development, LLC (“Janssen”), an affiliate

of shareholder Johnson & Johnson Development Corporation, for a collaboration on biomarker discovery for inflammatory

bowel disease (“IBD”).

Under the agreement, BiomX Israel is eligible to receive fees totaling $167 in installments

of $50 within 60 days of signing of the agreement, $17 upon completion of data processing, and two installments of $50 each,

upon delivery of Signature Phase I of the Final Study Report (both terms defined within the agreement).

This agreement ended

in 2020, 30 days after the parties completed the research program and BiomX Israel provided Janssen with a final study report.

In October 2019, BiomX Israel entered into a loan agreement in the

amount of $ 19 with a shareholder who was subject to taxation in Israel in connection with the Recapitalization Transaction.

initially for a period of up to two years from the time of the grant, is non-recourse, and is secured by shares of Common Stock issued

to them with a value that equals three times the loan amount at the time of the grant.

If the shareholder defaults on such loan, the Company

will have the right to forfeit or sell such number of shares with a value equal to the amount of the loan not timely repaid (plus interest

accrued thereon), based on their market price at the time of such forfeiture or sale.

The number of shares of Common Stock in respect

of which the loan was granted was 5,700 .

The granting of the loan and the restrictions imposed on the related Common Stock until repayment

of the loan were accounted as an acquisition of treasury stock by the Company at an amount equal to the loan.

On October 31, 2018, BiomX Israel entered into a research collaboration agreement with Janssen Research & Development, LLC (“Janssen”), an affiliate of shareholder Johnson & Johnson Development Corporation, for a collaboration on biomarker discovery for inflammatory bowel disease (“IBD”).

Under the agreement, BiomX Israel is eligible to receive fees totaling $167 in installments of $50 within 60 days of signing of the agreement, $17 upon completion of data processing, and two installments of $50 each, upon delivery of Signature Phase I of the Final Study Report (both terms defined within the agreement).

This agreement ended in 2020, 30 days after the parties completed the research program and BiomX Israel provided Janssen with a final study report.

As of December 31, 2019, consideration of $117 had been received.

The remaining $50 consideration was received in January 2020.

Refer to Note 13A regarding a Securities Purchase Agreement

with institutional investors, all of the Company’s directors and certain executive officers.

Refer to Note 13B regarding stock options granted to

related parties.

COMMITMENTS AND CONTINGENT LIABILITIES

During 2015, 2016 and 2017, BiomX Israel submitted

three requests to the IIA for R&D projects for the technological incubators program.

The approved budget per year was

NIS 2,700 (approximately $781) per request.

According to the IIA directives, the IIA funded 85% of the approved budget and

the rest of the budget was funded by certain shareholders.

In April 2019, the IIA approved an application for

a total budget of NIS 4,221 (approximately $1,185).

During 2015, 2016 and 2017, BiomX Israel submitted three requests to

the IIA for R&D projects for the technological incubators program.

The approved budget per year was NIS 2,700 (approximately $ 781 )

IIA funded 85 % of the approved budget.

The program was for the period beginning

from July 2018 through June 2019.

As of December 31, 2020, BiomX Israel has received all funds with respect to this program.

In December 2019, the IIA approved an application for

a total budget of NIS 10,794 (approximately $3,123).

As of December 31, 2021, BiomX Israel had received all funds with respect to these

During 2019, the IIA approved two applications for a total

budget of NIS 15,015 (approximately $ 4,308 ).

IIA funded 30 % of the approved budget.

The program is for the period beginning

from July 2019 through December 2019.

As of December 31, 2020, BiomX Israel has submitted the final report to the IIA for this

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

As of December 31, 2021, BiomX Israel had received

all funds with respect to these programs.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

During April 2020, the IIA approved a new application

for a total budget of NIS 15,562 (approximately $4,287).

The IIA committed to funding 30% of the approved budget.

was for the period beginning January 2020 through December 2020.

As of December 31, 2020, the Company received NIS 1,634 (approximately

In April 2020, the IIA approved an application for a total

budget of NIS 15,562 (approximately $ 4,287 ).

The IIA committed to fund 30 % of the approved budget.

The program was for the period beginning

January 2020 through December 2020.

As of December 31, 2021, BiomX Israel had received all funds with respect to this program.

In March 2021, the IIA approved two new applications for

a total budget of NIS 19,444 (approximately $ 5,874 ).

The IIA committed to fund 30 % of the approved budget.

The program is for the period

beginning January 2021 through December 2021.

As of December 31, 2021, BiomX Israel had received NIS 2,042 (approximately $ 625 ) from the

IIA with respect to these programs.

In August 2021, the IIA approved an application for an aggregate

budget of NIS 5,737 (approximately $ 1,778 ).

The IIA committed to fund 50 % of the approved budget.

The program is for the period beginning

July 2021 through June 2022.

The program does not bear royalties.

As of December 31, 2021, BiomX Israel had received NIS 1,004 (approximately

$ 313 ) from the IIA with respect to this program.

BiomX Israel has not yet submitted the final report to the IIA for this program.

Refer to note 18C for more information regarding

approved applications in 2021.

According to the agreement with the IIA, BiomX Israel

will pay royalties of 3% to 3.5% of future sales up to an amount equal to the accumulated grant received including annual interest

Refer to note 19A for more information regarding received funds.

Refer to note 19B for more information regarding approved

applications in 2022.

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

LIBOR linked to the dollar.

BiomX Israel may be required to pay additional royalties upon the occurrence of certain events as determined

by the IIA, that are within the control of BiomX Israel.

No such events have occurred or were probable of occurrence as of the balance

sheet date with respect to these royalties.

Repayment of the grant is contingent upon the successful completion of the BiomX Israel’s

R&D programs and generating sales.

BiomX Israel has no obligation to repay these grants if the R&D program fails, is unsuccessful

or aborted or if no sales are generated.

The Company had not yet generated sales as of December 31, 2021;

therefore, no liability was

recorded in these consolidated financial statements.

IIA grants are recorded as a reduction of R&D expenses, net.

Total research and development income recorded in the consolidated

statements of operations was $ 3,741 and $ 518 for the years ended December 31, 2021 and 2020, respectively.

Through December 31, 2021, total grants approved from the

IIA aggregated to approximately $ 7,175 (NIS 24,782 ).

Through December 31, 2021, BiomX Israel had received an aggregate amount of $ 5,571

(NIS 19,100 ) in the form of grants from the IIA.

Total grants subject to royalties’ payments aggregated to approximately $ 5,258 .

As of December 31, 2021, BiomX Israel had a contingent obligation to the IIA in the amount of approximately $ 5,397 including annual interest

of LIBOR linked to the dollar.

BiomX Israel may be required to pay additional royalties upon the occurrence of certain events

as determined by the IIA, that are within the control of BiomX Israel.

No such events have occurred or were probable of occurrence

as of the balance sheet date with respect to these royalties.

Repayment of the grant is contingent upon the successful completion

of the BiomX Israel’s R&D programs and generating sales.

BiomX Israel has no obligation to repay these grants if the

R&D program fails, is unsuccessful or aborted or if no sales are generated.

The Company had not yet generated sales as of

December 31, 2020, therefore, no liability was recorded in these consolidated financial statements.

Total research and development income recorded in the

consolidated statements of operations was $518 and $299 for the years ended December 31, 2020 and 2019, respectively.

As of December 31, 2020, BiomX Israel had a contingent

obligation to the IIA in the amount of approximately $2,300 including annual interest of LIBOR linked to the dollar.

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”), according to which Yeda undertakes to procure the performance of certain research, including proof-of-concept

studies testing in-vivo phage eradication against a model bacteria in germ free mice, development of an IBD model in animals

under germ-free conditions and establishing an in-vivo method for measuring immune induction capability (Th1) of bacteria,

followed by testing several candidate IBD inducing bacterial strains during the research period, as defined in the 2015 License

Agreement and subject to the terms and conditions specified in the 2015 License Agreement.

Even though the IIA did not determine an alternative benchmark

rate to the LIBOR, the Company does not expect the replacement to have a material impact on its financial statements.

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”), according to which Yeda undertakes to procure the performance of certain

research, including proof-of-concept studies testing in-vivo phage eradication against a model bacteria in germ-free mice, development

of an IBD model in animals under germ-free conditions and establishing an in-vivo method for measuring immune induction capability (Th1)

of bacteria, followed by testing several candidate IBD inducing bacterial strains during the research period, as defined in the 2015

License Agreement and subject to the terms and conditions specified in the 2015 License Agreement.

BiomX Israel contributed an aggregate

of approximately $ 1,800 to the research budget agreed upon in the 2015 License Agreement.

In addition, Yeda granted BiomX

Israel an exclusive worldwide license for the development, production and sale of the products, as defined and subject to

the terms and conditions specified in the 2015 License Agreement.

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 addition, in the

event of certain mergers and acquisitions by the Company, Yeda will be entitled to an amount equivalent to 1% of the consideration

received under such transaction (the “Exit Fee”), as adjusted per the terms of the 2015 License Agreement.

July 2019, the Company and Yeda amended the 2015 License Agreement and the 2017 License Agreement (as defined below) with

Yeda (the “Yeda Amendment”).

See Note 11G regarding the Yeda Amendment.

As the Company has not yet generated revenue

from operations, no provision was included in the consolidated financial statements as of December 31, 2020 and 2019 with

respect to the 2015 License Agreement.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

In addition, Yeda granted BiomX Israel an exclusive

worldwide license for the development, production and sale of the products, as defined and subject to the terms and conditions specified

in the 2015 License Agreement.

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 addition, in the event of certain mergers and acquisitions by the Company, Yeda

will be entitled to an amount equivalent to 1 % of the consideration received under such transaction (the “Exit Fee”), as

adjusted per the terms of the 2015 License Agreement.

As the Company has not yet generated revenue from operations, no provision was

included in the consolidated financial statements as of December 31, 2021 and 2020 with respect to the 2015 License Agreement.

In May 2017, BiomX Israel signed an additional agreement with Yeda (the “2017 License Agreement”), according to which Yeda provided a license to the Company.

As consideration for the license, BiomX granted Yeda 591,382 warrants to purchase shares of Common Stock.

Refer to Note 13 below for the terms of the warrants granted.

In July 2019, the Company and Yeda amended the 2015 License Agreement and the 2017 License Agreement (the “Yeda Amendment”).

Pursuant to the Yeda Amendment, following the closing of the Recapitalization Transaction, the provisions of the Yeda license agreements related to the Exit Fee were amended so that the Company is obligated to pay Yeda a one-time payment as described in the Yeda Amendment which will not exceed 1 % of the consideration received in the event of any merger or acquisition involving the Company instead of the Exit Fee, with respect to each license agreement.

The 2017 License Agreement was terminated in 2020.

Refer to Note 13 below for the terms of the warrants granted and the resulting impact due to the termination.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

COMMITMENTS AND CONTINGENT LIABILITIES (Cont.)

In May 2017, BiomX Israel signed an additional

agreement with Yeda (the “2017 License Agreement”), according to which Yeda provided a license to the Company.

As consideration for the license, the Company is obligated to pay $10 over the term of the 2017 License Agreement, unless

earlier terminated by either party, and granted Yeda 591,382 warrants to purchase shares of Common Stock.

Refer to Note 12

below for the terms of the warrants granted.

In addition, the 2017 License Agreement includes additional consideration contingent

upon future sales or sublicensing revenue.

As the Company has not yet generated revenue from operations, no provision was

included in the financial statements with respect to the 2017 License Agreement as of December 31, 2020 and 2019.

In July 2019, the Company and Yeda amended the 2015

License Agreement and the 2017 License Agreement with Yeda.

See Note 11G regarding the Yeda Amendment.

In April 2017, BiomX Israel signed an exclusive patent

license agreement (the “2017 Patent License Agreement”) with the Massachusetts Institute of Technology (“MIT”)

covering methods to synthetically engineer phage.

According to the agreement, BiomX Israel received an exclusive, royalty-bearing

license to certain patents held by MIT.

In return, BiomX Israel paid an initial license fee of $25 during the year ended

2017 and is required to pay certain license maintenance fees of up to $250 in each subsequent year and following the commercial

sale of licensed products.

BiomX Israel is also required to make payments to MIT upon the satisfaction of development

and commercialization milestones totaling up to $2,350 in aggregate, as well as royalty payments on future revenues.

consolidated financial statements as of December 31, 2020 and 2019 include a liability with respect to this agreement

in the amount of $240 and $108, respectively.

In October 2020, the Company and MIT amended the 2017

Patent License Agreement (the “MIT Amendment”).

See Note 11I regarding the MIT Amendment.

As successor in interest to 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 on revenue of products.

The consolidated financial statements as of December 31, 2020 and 2019 include a liability with respect to this agreement

in the amount of $83 and $260, respectively.

Refer to Note 6 regarding contingent liability with respect to the RondinX Ltd.

In December 2017, BiomX Israel signed a patent

license agreement with Keio University and JSR Corporation in Japan.

According to the agreement, BiomX Israel received an

exclusive patent license to certain patent rights related to the Company’s IBD program.

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 $3,210 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, 2020 and 2019 with respect to the agreement.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

In April 2017, BiomX Israel signed an exclusive patent license agreement (the “2017 Patent License Agreement”) with the Massachusetts Institute of Technology (“MIT”) covering methods to synthetically engineer phage.

According to the agreement, BiomX Israel received an exclusive, royalty-bearing license to certain patents held by MIT.

In return, BiomX Israel paid an initial license fee of $ 25 during the year 2017 and is required to pay certain license maintenance fees of up to $ 250 in each subsequent year and following the commercial sale of licensed products.

BiomX Israel is also required to make payments to MIT upon the satisfaction of development and commercialization milestones totaling up to $ 2,350 in aggregate, as well as royalty payments on future revenues.

No liability is included in the consolidated financial statements as of December 31, 2021 with respect to this agreement.

The consolidated financial statements as of December 31, 2020 include a liability with respect to this agreement in the amount of $ 240 recorded as other liabilities.

In October 2020, the Company and MIT amended the 2017 Patent License Agreement.

Pursuant to the MIT Amendment, BiomX Israel will continue to receive an exclusive, royalty-bearing license to certain patents held by MIT.

In return, BiomX Israel is required to pay certain license maintenance fees of up to $ 250 in each subsequent year and following the commercial sale of licensed products.

BiomX Israel is also required to make payments to MIT upon the satisfaction of development and commercialization milestones totaling up to $ 4,700 in aggregate, as well as royalty payments on future revenues.

As successor in interest to 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.

The consolidated financial statements as of December 31, 2021 and 2020 include a liability with respect to this agreement in the amount of $ 175 and $ 83 , respectively, recorded as other liabilities.

Refer to Note 6 regarding a contingent consideration with respect to the RondinX Ltd.

In December 2017, BiomX Israel signed a patent license agreement with Keio University and JSR Corporation in Japan.

According to the agreement, BiomX Israel received an exclusive patent license to certain patent rights related to the Company’s IBD program.

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, 2021 and 2020 with respect to the agreement.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

license agreement with Keio University and JSR Corporation in Japan.

According to the agreement, BiomX Israel received an exclusive

sublicense by JSR to certain patent rights related to the Company’s Primary Sclerosing Cholangitis program.

In return, the

Company is required (i) to pay a license issue fee of $20 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 $32,10 and (iii) make tiered royalty

payments, in the low single digits based on future revenue.

The consolidated financial statements include liabilities with respect

to this agreement in the amount of $378 and $217 as of December 31, 2020 and 2019, respectively.

In July 2019, the Company and Yeda amended the 2015

License Agreement and the 2017 License Agreement with Yeda.

Pursuant to the Yeda Amendment, following the closing of the

Recapitalization Transaction, the provisions of the Yeda license agreements related to the Exit Fee were amended so that

the Company is obligated to pay Yeda a one-time payment as described in the Yeda Amendment which will not exceed 1% of

the consideration received in the event of any merger or acquisition involving the Company instead of the Exit Fee, with

respect to each license agreement.

The 2017 license agreement was terminated in 2020.

On September 1, 2020 (“Effective Date”),

BiomX Israel entered into a research collaboration agreement with Boehringer Ingelheim International GmbH (“BI”)

for a collaboration on biomarker discovery for IBD.

Under the agreement, BiomX Israel is eligible to receive fees totaling

$439 in installments of $50 within 60 days of the Effective Date, $100 upon receipt of the BI materials, $150 upon the

completion of data processing and $139 upon delivery of the Final Report of observations and Results of the Project (as

such terms are defined within the agreement).

Unless terminated earlier, this agreement will remain in effect, until one

year after the Effective Date or completion of the Project Plan (as defined in the agreement) and submission and approval

of the Final Report.

As of December 31, 2020, consideration of $150 had been received.

In October 2020, the Company and MIT amended

the 2017 Patent License Agreement.

Pursuant to the MIT Amendment, BiomX Israel will continue to receive an exclusive, royalty-bearing

license to certain patents held by MIT.

In return, BiomX Israel is required to pay certain license maintenance fees of up

to $250 in each subsequent year and following the commercial sale of licensed products.

BiomX Israel is also required to make

payments to MIT upon the satisfaction of development and commercialization milestones totaling up to $4,700 in aggregate,

as well as royalty payments on future revenues.

Refer to Note 8 for information regarding the

Company’s lease commitments.

Refer to Note 10B(1) for information regarding

the Company’s commitment to certain shareholders for taxes incurred in Israel as a result of the Recapitalization Transaction.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

According to the agreement, BiomX Israel received an exclusive sublicense

by JSR to certain patent rights related to the Company’s Primary Sclerosing Cholangitis program.

In return, the Company is required

(i) to pay a license issue fee of $20 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.

The consolidated financial statements include liabilities with respect to this agreement in the amount of $40

and $378 as of December 31, 2021 and 2020, respectively, recorded as other liabilities.

On September 1, 2020 (“Effective Date”), BiomX Israel entered into a research collaboration agreement with Boehringer Ingelheim International GmbH (“BI”) for a collaboration on biomarker discovery for IBD.

Under the agreement, BiomX Israel was eligible to receive fees totaling $439 in installments of $50 within 60 days of the Effective Date, $100 upon receipt of the BI materials, $150 upon the completion of data processing and $139 upon delivery of the Final Report of observations and Results of the Project (as such terms are defined within the agreement).

The Company granted BI an option to negotiate for an exclusive, worldwide, compensation-based license(s), with rights to sublicense, to use the metagenomic signature results under any patents covering such metagenomic signature results for the sole purpose of making, having made, offering for sale, selling, having sold, importing or otherwise commercializing diagnostic products, including companion diagnostics (the “Option”).

The Option shall be exercisable any time until twelve months following delivery of the Final Report.

BI agreed to pay to the Company fifty percent (50%) of all income that BI receives as a result of, and directly related to, the commercial exploitation of such companion diagnostic.

During 2021, consideration of $ 150 was received.

As of December 31, 2021, the total consideration of $ 439 had been received.

The consideration is recorded as a reduction of R&D expenses, net in the consolidated statements of operations.

Refer to Note 8 for information regarding the Company’s

lease liabilities.

LONG-TERM DEBT

On August 16, 2021, the Company entered

into a Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc.

(“Hercules”), with respect

to a venture debt facility.

Under the Loan Agreement, Hercules provided the Company with access to a term loan with an aggregate principal

amount of up to $30,000 (the “Term Loan Facility”), available in three tranches, subject to certain terms and conditions.

The first tranche of $15,000 was advanced to the Company on the date the Loan Agreement was executed.

Upon the occurrence of specified

milestones and continuing through December 31, 2022, a loan in the aggregate principal amount of up to $10,000 (“the second tranche”),

and upon the occurrence of specified milestones and continuing through September 30, 2023, a loan in the aggregate principal amount of

up to $5,000 (“the third tranche”), may become available.

The milestones for the remaining tranches have not yet been reached

as of December 31, 2021.

The Company is required to make interest only payments through March 1, 2023, or extended to September 1, 2023

upon satisfaction of certain milestones, and is required to then repay the principal balance and interest in equal monthly installments

through September 1, 2025.

The Company may prepay advances under

the Loan Agreement, in whole or in part, at any time subject to a prepayment charge equal to:

(a) 3.0 % of amounts prepaid, if such prepayment

occurs during the first 12 months following the closing date;

(b) 2.0% after 12 months but prior to 24 months;

but prior to 36 months, and (d) no charge after 36 months.

Upon prepayment or repayment of all or any of the term loans under the Term

Loan Facility, the Company is required to pay an end of term charge (“End of Term Charge”) equal to 6.55% of the total aggregate

amount of the term loans being prepaid or repaid.

Interest on the term loan accrues

at a per annum rate equal to the greater of (i) the Prime Rate as reported in The Wall Street Journal plus 5.70% and (ii) 8.95%.

31, 2021, the Prime Rate was 3.25%.

Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization

of capitalized loan issuance costs.

Debt issuance costs are recorded on the consolidated balance sheet as a reduction of liabilities.

Amounts allocated to the debt, net of issuance cost, are subsequently recognized at amortized cost using the effective interest method.

On December 31, 2021, the effective interest rate was 13.73%.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

LONG-TERM DEBT(cont.)

As of December 31, 2021, the carrying

value of the term loan consists of $ 15,000 principal outstanding less the debt discount and issuance costs of approximately $ 775 .

End of Term Charge of $ 983 is recognized over the life of the term loan as interest expense using the effective interest method.

debt issuance costs have been recorded as a debt discount which are being accreted to interest expense through the maturity date of the

Interest expense relating to the term loan, which is included

in interest expense in the consolidated statements of operations was $ 699 for the year ended December 31, 2021.

Under the terms of the Loan Agreement,

the Company granted first priority liens and security interests in substantially all of the Company’s intellectual property as

collateral for the obligations thereunder.

The Company also granted Hercules the right, at their discretion, to participate in any closing

of any single subsequent broadly marketed financing as defined up to a maximum aggregate amount of $ 2,000 under the terms as afforded

to other investors in such financing.

The Loan Agreement also contains representations and warranties by the Company and Hercules, indemnification

provisions in favor of Hercules and customary affirmative and negative covenants, including a liquidity covenant beginning October 1,

2022, requiring the Company to maintain a minimum aggregate compensating cash balance of $ 5,000 , and events of default, including a material

adverse change in the Company’s business, payment defaults, breaches of covenants following any applicable cure period, and a material

impairment in the perfection or priority of Hercules’ security interest in the collateral.

In the event of default by the Company

under the Loan Agreement, the Company may be required to repay all amounts then outstanding under the Loan Agreement.

Future principal payments for the

long-term debt are as follows:

Total principal payments

Unamortized discount and debt issuance costs

Long-term debt

STOCKHOLDERS EQUITY

1 unchanged sentence

Common Stock:

The Company is authorized to issue 60,000,000 shares

of Common Stock.

Holders of the Company’s Common Stock are entitled to one vote for each share.

As of December 31, 2020,

the Company had 23,270,337 issued shares and 23,264,637 outstanding shares of Common Stock.

The Company is authorized to issue 60,000,000 shares of

Common Stock.

Holders of the Company’s Common Stock are entitled to one vote for each share.

Treasury Stock:

Refer to Note 10B(1).

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 consist

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.

Following the Recapitalization Transaction, the

Company retained approximately $60,100 balance held in a trust account, after redemptions of IPO shares held by certain shareholders.

Simultaneous with the consummation of the IPO, the

Company consummated the private placement of an aggregate of 2,900,000 warrants (“Private Placement Warrants”).

Issuance of Share Capital:

During 2018 BiomX Ltd.

issued an aggregate amount

of 3,028,990 Preferred A Shares (pre-merger) for a total consideration of $13,000, in connection with various share purchase agreement

with investors.

In November 2018, the Company entered into a share

purchase agreement (the “November 2018 SPA”) with new and existing investors (the “November 2018 Investors”).

In accordance with the November 2018 SPA, the Company issued to the November 2018 Investors a total of 5,478,985 Preferred B Shares

at $0.0001 nominal value (the “Preferred B Shares”) for total consideration of $31,955 as follows:

On November 28, 2018 and on December 11, 2018,

the Company issued to the November 2018 Investors 4,964,607 and 205,750 Preferred B Shares, respectively, for total consideration

of $30,155 in accordance with the November 2018 SPA.

On January 8, 2019, the Company issued to the

November 2018 Investors an additional 308,628 Preferred B Shares for total consideration of $1,800 in accordance with the

November 2018 SPA.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

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 consist 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.

Following the Recapitalization Transaction, the Company

retained approximately $ 60,100 balance held in a trust account, after redemptions of IPO shares held by certain shareholders.

Simultaneous with the consummation of the IPO, the Company

consummated the private placement of an aggregate of 2,900,000 warrants (“Private Placement Warrants”).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4 unchanged sentences

As detailed in Note 1, as part of the Recapitalization

Transaction on October 28, 2019, the Company issued 15,069,058 shares of Common Stock in exchange for approximately 65% of the

issued and outstanding ordinary shares and all the preferred shares of BiomX Israel.

The number of shares prior to the Recapitalization

Transaction has been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the

Recapitalization Transaction.

In addition, the Company also agreed to issue the

following number of additional shares of Common Stock, in the aggregate, to stockholders on a pro rata basis, subject to the Company’s

achievement of the conditions specified below following the recapitalization transaction (all with respect to the Company’s

Common Stock traded on the NYSE American):

2,000,000 additional shares of the Company’s

Common Stock 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, 2022 is greater than or equal to $16.50 per share.

2,000,000 additional shares of the Company’s

Common Stock 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, 2024 is greater than or equal to $22.75 per share.

2,000,000 additional shares of the Company’s

Common Stock 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.

Transaction on October 28, 2019, the Company issued 15,069,058 shares of Common Stock in exchange for approximately 65 % of the issued

and outstanding ordinary shares and all the preferred shares of BiomX Israel.

The number of shares prior to the Recapitalization Transaction

has been retroactively adjusted based on the equivalent number of shares received by the accounting acquirer in the Recapitalization

In addition, the Company also agreed to issue the following

number of additional shares of Common Stock, in the aggregate, to stockholders on a pro rata basis, subject to the Company’s achievement

of the conditions specified below following the recapitalization transaction (all with respect to the Company’s Common Stock traded

on the NYSE American):

2,000,000 additional shares of the Company’s Common Stock 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, 2022 is greater than or equal to $16.50 per share.

As of December 31, 2021, the condition was not achieved and the Company’s conditional undertaking to issue additional shares expired.

2,000,000 additional shares of the Company’s

Common Stock 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, 2024 is greater than or equal to $22.75 per share.

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 provides that,

upon the terms and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to

offer and sell shares of Common Stock having an aggregate offering price of up to $50,000 through Jefferies acting as sales agent.

During the year ended December 31, 2020, the Company sold 10,176 shares of Common Stock under the ATM Agreement, at an average

price of $6.07 per share, raising aggregate net proceeds of approximately $60, after deducting an aggregate commission of 3%.

The Company recorded issuance expenses of $158.

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 provides that, upon the terms

and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares

of Common Stock having an aggregate offering price of up to $50,000 through Jefferies acting as sales agent.

During the year ended December

31, 2021, the Company sold 743,964 shares of Common Stock under the ATM Agreement, at an average price of $7.19 per share, raising aggregate

net proceeds of approximately $5,188, after deducting an aggregate commission of 3%.

During the year ended December 31, 2020, the Company

sold 10,176 shares of Common Stock under the ATM Agreement, at an average price of $6.07 per share, raising aggregate net proceeds of

approximately $60, after deducting an aggregate commission of 3%.

The Company deducted issuance expenses from Additional Paid in Capital

of $ 2 and $ 158 as of December 31, 2021 and 2020, respectively.

Securities Purchase Agreement:

On July 26, 2021, the Company entered into a Securities

Purchase Agreement with institutional investors, all of the Company’s directors and certain executive officers for the sale of

an aggregate of 3,750,000 shares of the Company’s Common Stock and warrants to purchase an aggregate of 2,812,501 shares of the

Company’s Common Stock in a registered direct offering (the “Registered Direct Offering”), for gross proceeds of $ 15,000

before deducting placement agent fees and offering expenses and assuming that none of the warrants are exercised.

The securities were

sold at price of $ 4.00 per share and an accompanying warrant to purchase 0.75 of a share of the Company’s Common Stock at an exercise

price of $ 5.00 per share.

The warrants will be exercisable six months after the date of issuance and will expire five years from the

date such warrant first becomes exercisable.

The warrants issued were classified as equity in accordance with ASC 815-40.

The securities

were offered pursuant to the Company’s effective registration statement on Form S-3.

All proceeds were received as of July 28,

125,000 shares of Common Stock and 93,750 warrants were sold to related parties.

Maruho Agreement:

In October 2021, the Company entered into a Stock Purchase

Agreement with a subsidiary of Maruho Co.

Ltd., (“Maruho”), a leading dermatology-focused pharmaceutical company in Japan,

pursuant to which the Company issued to Maruho 375,000 shares of Common Stock at a price of $ 8.00 per share for gross proceeds of $ 3,000 .

The company also granted Maruho a right of first offer to license its atopic dermatitis product candidate, BX005, in Japan.

of first offer will commence following the availability of results from the Phase 1/2 study expected in 2022.

The Company applied ASC

606 by analogy to the agreements.

The agreements were combined into a single unit of account for the purpose of applying ASC 606.

of the consideration paid under the agreements, equal to the grant date fair value of the shares issued to Maruho of $ 1,024 , is attributed

to the issuance of shares and accounted for as an increase in equity.

The remainder of $ 1,976 was attributed to a contract liability,

to be recognized as other income, at a point in time, once the clinical trials related to the product candidate are completed.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

STOCKHOLDERS EQUITY (Cont.)

Share Capital:

In December 2021, the Company entered into a Securities

Purchase Agreement with the Cystic Fibrosis Foundation ("CF Foundation"), an organization that historically played a role in

supporting the development of innovative therapies for patients suffering from cystic fibrosis (CF).

Under the terms of the agreement,

the Company will receive up to $5,000 in two tranches.

In the first tranche, which closed and fully received on December 21, 2021, the

CF Foundation invested $3,000 as an initial equity investment based on a share price of $2.57.

Upon completion of patient dosing in Part

1 of the Company’s Phase 1b/2a study of BX004, the Company would have the right to receive the second tranche of $2,000, also as

an equity investment.

In the event that the average closing price of the Common Stock for the ten trading days prior to the second tranche

completion is less than $2.57, the Company shall have the right in its sole discretion to waive the second tranche payment and in such

event the CF Foundation shall not have any right to receive additional shares.

However, the CF foundation may waive the Milestone in its

discretion and make the Milestone Payment nonetheless.

The Company concluded that the second tranche is a freestanding financial

The Company also concluded that since the instrument will be predominantly settled in a variable number of shares at a fixed

monetary amount, the second tranche is in the scope of ASC 480 and should be accounted for at fair value with subsequent changes in fair

value recognized in the statements of operations in each period.

The Company further determined that due to the settlement mechanism,

the fair value of the second tranche is negligible, both at inception and on December 31, 2021.

Preferred Stock:

The Company is authorized to issue 1,000,000 shares

of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from

time to time by the Company’s Board of Directors (the “Board”).

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

The Company is authorized to issue 1,000,000 shares of

preferred stock with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to

time by the Company’s Board of Directors (the “Board”).

The Private Placement Warrants are identical to the

Public Warrants underlying the Units sold in the IPO except that the Private Placement Warrants are exercisable for cash (even if

a registration statement covering the shares of Common Stock issuable upon exercise of such warrants is not effective) or on a cashless

basis, at the holder’s option, and will not be redeemable by the Company, in each case, so long as they are held by the initial

purchasers or their permitted transferees.

If the Private Placement Warrants are held by someone other than the initial purchasers

or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders

on the same basis as the Public Warrants.

The Public Warrants became exercisable upon the closing of the Recapitalization Transaction.

No fractional shares will be issued upon exercise of the Public Warrants.

Therefore, the Public Warrants must be exercised in multiples of two warrants.

The Public Warrants will expire five years after the completion of the Recapitalization Transaction or earlier upon redemption or liquidation.

The Company may redeem the Public Warrants:

● in whole and not in part;

● at a price of $0.01 per warrant;

● at any time during the exercise period;

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

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

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

If the Company calls the Public

Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on

a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of Common Stock issuable

upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization,

reorganization, merger or consolidation.

However, the warrants will not be adjusted for issuance of Common Stock at a price below their

exercise price.

Additionally, in no event will the Company be required to net cash settle the warrants.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

STOCKHOLDERS EQUITY (Cont.)

Share Capital:

As of December 31, 2021, the Company had the following

outstanding warrants to purchase Common Stock issued to stockholders:

Private Placement

IPO (December 13, 2018)

December 13, 2023

Public Warrants

IPO (December 13, 2018)

October 28, 2024

2021 Registered Direct

Offering Warrants

SPA (July 28, 2021)

January 28, 2027

Stock-based compensation:

1 unchanged sentence

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.

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.

The 2015 plan was adjusted following the Recapitalization

Transaction on October 28, 2019 such that each outstanding option entitles its holder to purchase one share of Common Stock of

As a result, the number of options and exercise price per share were adjusted in a technical manner such that there

was no change in the fair value of the awards under the adjusted 2015 Plan.

The number of outstanding options and exercise prices

in this Note have been restated to reflect the adjusted 2015 Plan.

As of December 31, 2020, 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.

As of December 31, 2020, there were 60,041 shares

of Common Stock remaining for issuance under the 2019 plan.

On January 1, 2021, the number of shares of Common Stock available

to grant under the 2019 Plan was increased by 930,813.

Stock Options:

During 2019, the Board approved the grant of 704,669

options to 22 employees and 79,630 options to two consultants, without consideration.

527,716 of the options granted are to the

executive officers of the Company.

These options were granted under the 2015 Plan.

During 2019, 74,581 of these options were exercised

to purchase shares of Common Stock at an average exercise price of $1.34 per share.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

Transaction on October 28, 2019 such that each outstanding option entitles its holder to purchase one share of Common Stock of the Company.

As a result, the number of options and exercise price per share were adjusted in a technical manner such that there was no change in

the fair value of the awards under the adjusted 2015 Plan.

The number of outstanding options and exercise prices in this Note have been

restated to reflect the adjusted 2015 Plan.

As of December 31, 2021, 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.

As of December 31, 2021, there were 216,036 shares of Common

Stock remaining for issuance under the 2019 plan.

On January 1, 2022, the number of shares of Common Stock available to grant under the

2019 Plan was increased by 1,190,129 .

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Stock Options:

Certain senior employees and 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 March 25, 2020, the Board approved the grant

of 814,700 options without consideration to 65 employees, one consultant, four senior officers (one of whom is also a consultant),

and six directors under the 2019 Plan.

These options were granted at an exercise price of $6.21 per share with vesting periods

ranging from three to 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 March 25, 2020, the Board approved the grant of 814,700

options without consideration to 65 employees, one consultant, four senior officers (one of whom is also a consultant), and six directors

under the 2019 Plan.

These options were granted at an exercise price of $ 6.21 per share with vesting periods ranging from three to four

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 May 5, 2020, the Board approved the grant of 79,000

options without consideration to four employees under the 2019 Plan.

These options were granted at an exercise price of

$5.59 per share with a vesting period of four years.

On October 2, 2020, the Board of Directors approved

the grant of 32,000 options without consideration to two directors under the 2019 Plan.

These options were granted at an exercise

price of $6.44 per share with a vesting period of four years.

Directors are entitled to full acceleration of their unvested options

upon the occurrence of both a change in control of the Company and the end of their engagement with the Company.

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:

These options were granted at an exercise price of $ 5.59 per share

with a vesting period of four years .

On October 2, 2020, the Board approved the grant of 32,000

options without consideration to two directors under the 2019 Plan.

These options were granted at an exercise price of $ 6.44 per share

with a vesting period of four years .

Directors are entitled to full acceleration of their unvested options upon the occurrence of both

a change in control of the Company and the end of their engagement with the Company.

On March 30, 2021, the Board approved the grant of 985,530

options to 94 employees, including five senior officers, one consultant, and six directors under the 2019 Plan, without consideration.

Options were granted at an exercise price of $ 7.02 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:

Underlying value of Common Stock ($)

1 unchanged sentence

Expected volatility (%)

Term of the option (years)

Expected terms of the option (years)

Risk-free interest rate (%)

1 unchanged sentence

in 2021 and 2020 based on their fair value as at the grant date, is estimated to be $ 5,138 and $ 3,752 , respectively.

These amounts

will be recognized in statements of operations over the vesting period.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

These amounts will

be recognized in statements of operations over the vesting period.

As of December 31, 2021, the unrecognized compensation

cost related to all unvested, equity classified stock options of $ 3,395 is expected to be recognized as an expense on a graded vesting

method over a weighted-average period of 1.43 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

Stock Options:

A summary of options granted to purchase the

Company’s Common Stock under the Company’s stock option plans are as follows:

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

3 unchanged sentences

Vested at end of period

Weighted average remaining contractual life –

years as of December 31, 2020

Weighted average remaining contractual life – years as of December 31, 2021

For year ended

3 unchanged sentences

Vested at end of period

Weighted average remaining contractual life –

years as of December 31, 2019

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

Weighted average remaining contractual life – years as of December 31, 2020

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Stock-based compensation:

As of December 31, 2020, and 2019, the Company

had the following outstanding warrants to purchase Common Stock as follows:

Issuance Date

Expiration Date

As of December 31, 2021, and 2020, the Company had

the following outstanding compensation related warrants to purchase Common Stock as follows:

Private Warrants issued to Yeda (see 1 below)

Private Warrants issued to Founders (see 2 below)

Private Warrants issued to scientific

founders (see 2 below)

November 27, 2017

Private Placement Warrants (see 3 below)

(December 13, 2018)

December 13, 2023

Public Warrants (see 4 below)

(December 13, 2018)

October 28, 2024

In May 2017, in accordance with

the 2017 License Agreement (see also Note 11C), the Company issued to Yeda, 591,382 warrants to purchase Common Stock

at $0.0001 nominal value, for nominal consideration.

less than $0.001.

In May 2017, in accordance with the 2017 License Agreement (see also Note 11B), the Company issued to Yeda, 591,382 warrants to purchase Common Stock at $ 0.0001 nominal value, for nominal consideration.

Yeda has the option to exercise the warrants on a cashless basis.

In 2020, the 2017 License Agreement was terminated.

For the year ended December 31,

2020, the Company recorded expense of $233.

For the year ended December 31, 2019, the Company recorded income of $241.

On March 10, 2021, Yeda exercised 362,444 warrants on a cashless basis, resulting in the issuance of 362,383 shares of Common Stock.

The remainder of the warrants were forfeited as part of the termination of the license agreement.

For the year ended December 31, 2021, the Company did not record an expense or income related to warrants.

For the year ended December 31, 2020, the Company recorded expense of $ 233 .

Expenses and income are included in R&D expenses, net in the consolidated statements of operations.

See note 18B regarding

the exercise of warrants.

236,552 warrants were fully vested and exercisable

on the date of their issuance.

The remainder of the warrants will vest and become exercisable subject to achievement of certain

milestones specified in the agreement as follows:

177,414 upon the filing of a patent application

covering any Discovered Target or a Product (both as defined in the 2017 License Agreement).

In 2020 the warrants were cancelled

following termination of the 2017 License Agreement,

118,277 upon achievement of the earlier of the

following milestone by the Company:

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

236,552 warrants were fully vested and exercisable on the

date of their issuance.

The remainder of the warrants will vest and become exercisable subject to achievement of certain milestones specified

in the agreement as follows:

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

In 2020 the warrants were forfeited following termination of the 2017 License Agreement,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Stock-based compensation:

execution of an agreement with a pharmaceutical

company with respect to the commercialization of any of the Company’s licensed technology or the Consulting IP or a

Product (both defined in the 2017 License Agreement) or

the filing of a patent application covering any Discovered

Target (as defined in the 2017 License Agreement) or a Product.

In the case of termination of the 2017 License Agreement

after the second anniversary thereof, and provided that none of the aforementioned milestones has been attained prior

to such termination, the warrants will vest upon such termination.

As of December 31, 2020, 118,277 warrants were vested

as the 2017 License Agreement was terminated after the second anniversary with no milestone have been attained.

59,139 upon completion of a Phase 1 clinical

trial in respect of a Product (as defined in the 2017 License Agreement).

In 2020 the warrants were cancelled following the

termination of the 2017 License Agreement.

In November 2017, BiomX Israel issued 7,615

warrants to Yeda and 2,974 warrants to its founders.

All the warrants were fully vested at their grant date and will expire

immediately prior to a consummation of an M&A transaction.

The warrants did not expire as a result of the Recapitalization

Transaction and have no exercise price.

118,277 upon achievement of the earlier of the following

milestone by the Company:

execution of an agreement with a pharmaceutical company

with respect to the commercialization of any of the Company’s licensed technology or the Consulting IP or a Product (both defined

in the 2017 License Agreement) or

the filing of a patent application covering any Discovered Target

(as defined in the 2017 License Agreement) or a Product.

In the case of termination of the 2017 License Agreement after

the second anniversary thereof, and provided that none of the aforementioned milestones has been attained prior to such termination,

the warrants will vest upon such termination.

As of December 31, 2020, 118,277 warrants were vested as the 2017

License Agreement was terminated after the second anniversary with no milestone have been attained.

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

In 2020 the warrants were forfeited following the termination of the 2017 License Agreement.

In November 2017, BiomX Israel issued 7,615 warrants

to Yeda and 2,974 warrants to its founders.

All the warrants were fully vested at their grant date and will expire immediately prior

to a consummation of an M&A transaction.

The warrants did not expire as a result of the Recapitalization Transaction and have no

exercise price.

No compensation expenses were recorded in the financial statements during 2021 and 2020.

The Private Placement Warrants are identical

to the Public Warrants underlying the Units sold in the IPO except that the Private Placement Warrants are exercisable for

cash (even if a registration statement covering the shares of Common Stock issuable upon exercise of such warrants is not

effective) or on a cashless basis, at the holder’s option, and will not be redeemable by the Company, in each case,

so long as they are held by the initial purchasers or their permitted transferees.

If the Private Placement Warrants are held

by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable

by the Company and exercisable by such holders on the same basis as the Public Warrants.

The Company filed a Registration

Statement on Form S-1 for the resale of shares underlying the warrants on December 13, 2019, which was declared effective

on January 3, 2020.

Such Registration Statement was converted to Form S-3 in December 2020.

The Public Warrants became exercisable upon the closing

of the Recapitalization Transaction.

No fractional shares will be issued upon exercise of the Public Warrants.

Public Warrants must be exercised in multiples of two warrants.

The Public Warrants will expire five years after the completion

of the Recapitalization Transaction or earlier upon redemption or liquidation.

The Company filed a Registration Statement

on Form S-1 for the resale of shares underlying the warrants on December 13, 2019, which was declared effective on January

Such Registration Statement was converted to Form S-3 in December 2020.

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

STOCKHOLDERS EQUITY (Cont.)

Stock-based compensation:

may redeem the Public Warrants:

in whole and not in part;

at a price of $0.01 per warrant;

at any time during the exercise period;

upon a minimum of 30 days’

prior written

notice of redemption;

if, and only if, the last sale price of the

Company’s Common Stock equals or exceeds $16.00 per share for any 20 trading days within a 30-trading day period ending

on the third business day prior to the date on which the Company sends the notice of redemption to the warrant holders;

if, and only if, there is a current registration

statement in effect with respect to the shares of Common Stock underlying such warrants at the time of redemption and for

the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the Company calls the

Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants

to do so on a “cashless basis,”

as described in the warrant agreement.

The exercise price and number of shares of

Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock

dividend, or recapitalization, reorganization, merger or consolidation.

However, the warrants will not be adjusted for issuance

of Common Stock at a price below their exercise price.

Additionally, in no event will the Company be required to net cash settle

the warrants.

The following table sets forth the total stock-based

5 unchanged sentences

31, 2021 and 2020, respectively.

The total unrecognized compensation expense was $2,657

and $2,308 as of December 31, 2020 and 2019, respectively.

These expenses will be recognized over a period of approximately 2

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

RESEARCH AND DEVELOPMENT EXPENSES, NET

Year ended December 31,

Professional service and subcontractors

3 unchanged sentences

Rent and related expenses

Less change in contingent liabilities (see Note 11C, 11E)

Less income from collaboration agreements (see Note 11H, 10B2)

14 unchanged sentences

Income from foreign exchange contracts

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company files income tax returns in the

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 inception remain open and subject to examination.

The statutory U.S.

income tax rate is 21%.

As of December 31, 2020, the Company had total net operating losses in the U.S of approximately $3,425,

which may be carried forward and offset against taxable

income in the future.

federal income tax rate is 21 %.

As of December 31, 2021, the Company had total net operating losses in the U.S.

of approximately $ 7,478 , which may be carried forward and offset against taxable income in the future.

And RondinX Ltd.

file income tax

returns in Israel.

Their income tax returns since inception remain open and subject to examination.

The statutory Israeli

income tax rate is 23%.

As of December 31, 2020 and 2019, BiomX Israel

had total net operating losses in Israel of approximately $62,927 and $25,883, respectively, which may be carried forward

and offset against taxable income in the future for an indefinite period.

The Company has evaluated the positive and negative

evidence bearing upon its ability to realize the deferred tax assets.

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, 2020 and 2019.

file income tax returns in Israel.

Their tax assessments through 2016 are deemed to be final.

The statutory Israeli income tax rate is 23 %.

As of December 31, 2021 and 2020, BiomX Israel had total net operating losses in Israel of approximately $ 78,542 and $ 47,336 , respectively, which may be carried forward and offset against taxable income in the future for an indefinite period.

As of December 31, 2021, the significant components of the Company’s deferred tax assets are net operating loss carryforward in the amount of $ 20.2 million and research and development expenses in the amount of $ 4.6 million.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets.

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, 2021.

Management reevaluates the positive and negative evidence at each reporting period.

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 or penalties as of December 31, 2020 and 2019.

As of December 31,

Net operating loss carryforward BiomX Inc.

Net operating loss carryforward BiomX Ltd.

Total deferred tax assets

Valuation allowance

Net deferred tax assets

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 or penalties as of December 31, 2021 and 2020.

A reconciliation of the U.S.

federal statutory tax

rate and the effective tax rate is as follow:

federal statutory tax rate

and the effective tax rate is as follow:

As of December 31,

Statutory U.S.

1 unchanged sentence

vs foreign tax rate differential

Business Combination expenses

Change in deferred tax asset valuation allowance

4 unchanged sentences

United States

(FORMERLY CHARDAN HEALTHCARE ACQUISITION CORP)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

BASIC LOSS PER

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:

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

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

Net loss per share

1 unchanged sentence

As the inclusion of shares of Common Stock equivalents

in the calculation would be anti-dilutive for all periods presented, diluted net loss per share is the same as basic net loss

in the calculation would be anti-dilutive for all periods presented, diluted net loss per share is the same as basic net loss per share.

Basic loss per share is computed on the basis of the net

loss for the period divided by the weighted average number of shares of Common Stock outstanding during the period.

Diluted loss per

share is based upon the weighted average number of shares of Common Stock and of potential shares of Common Stock outstanding when dilutive.

Potential shares of Common Stock equivalents include outstanding stock options and warrants, which are included under the treasury stock

method when dilutive.

The calculation of diluted loss per share as of December 31, 2021 does not include 4,084,545, 9,215,475 and 4,000,000

of shares underlying options, shares underlying warrants and contingent shares, respectively, because the effect would be anti-dilutive.

SUBSEQUENT EVENTS

On March 30, 2021, the Board of Directors approved the grant of 985,530 options to 104 employees, one consultant, five senior officers and six directors under the 2019 Incentive Plan, without consideration.

In January 2022, the Company received NIS 2,243 (approximately $721) from the IIA as part of the two approved programs in 2021, after submitting interim reports for the first six months of 2021.

In March 2022, the IIA approved a new application for a total budget of NIS 13,004 (approximately $4,022).

The IIA committed to fund 30% of the approved budget.

The program is for the period beginning January 2022 through December 2022.

In March 2022, the Board approved the grant of 1,153,500 options to 89 employees, one consultant, three senior officers and five directors under the 2019 Plan, without consideration.

Options were granted at an exercise price of $ 1.41 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 March 10, 2021, Yeda exercised 362,444 warrants on a cashless basis, resulting in the issuance of 362,383 shares of Common Stock.

On March 25, 2021, the IIA approved two new applications for a total budget of NIS 19,444 (approximately $5,874).

The IIA committed to funding 30% of the approved budget.

The programs are for the period beginning January 2021 through December 2021.

From January 1, 2021 through March 25, 2021, we issued an aggregate of 600,644 shares of Common Stock pursuant to the ATM Agreement for aggregate net proceeds of $4,324.

From January 1, 2022 through March 25, 2022, the Company issued an aggregate of 26,011 shares of Common Stock pursuant to the ATM Agreement for aggregate net proceeds of $ 35 .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures