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Item 1A. Risk Factors

2024-04-04 compared with 2023-03-29 · 1612 added, 1922 removed, 599 unchanged (86% of the section changed)

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to incur significant losses for the foreseeable future.

We are a clinical-stage biopharmaceutical company

with limited operating history.

We are a clinical-stage biopharmaceutical company with limited operating

We have incurred losses in each year since BiomX Ltd.’s inception in 2015.

As of December 31, 2022,

our accumulated deficit was $136.8 million, and we expect to incur increasingly significant losses for the foreseeable future.

development and clinical trials and activities are costly.

We have devoted, and will continue to devote for the foreseeable future, substantially

all of our resources to research and development and clinical trials for our product candidates.

We do not expect to generate any revenue

from the commercial sales of our product candidates in the near term.

For the years ended December 31, 2022 and 2021, we had losses from

operations of $27.2 million and $35.5 million, respectively.

We anticipate that the level of our expenses will continue to be significant

if and as we:

● initiate and continue research,

preclinical and clinical development efforts for any future product candidates;

● seek to discover and develop

additional product candidates and further expand our clinical product pipeline;

● seek marketing and regulatory

approvals for any product candidates that successfully complete clinical trials;

● require the manufacture of larger

quantities of product candidates for clinical development and, potentially, commercialization;

● maintain, expand and protect

our intellectual property portfolio;

● expand our research and development

infrastructure, including hiring and retaining additional personnel, such as clinical, quality control and scientific personnel;

● establish sales, marketing,

distribution and other commercial infrastructure in the future to commercialize products for which we obtain marketing approval, if any;

● add operational, financial and

management information systems and personnel, including personnel to support our product development and commercialization and help us

comply with our obligations as a public company.

As of December 31, 2023, our accumulated deficit

was $163 million, and we expect to incur increasingly significant losses for the foreseeable future.

Preclinical development and clinical

trials and activities are costly.

We have devoted, and will continue to devote for the foreseeable future, substantially all of our resources

to research and development and clinical trials for our product candidates.

We do not expect to generate any revenue from the commercial

sales of our product candidates in the near term.

In addition, as a result of the Acquisition, our future business, prospects, financial

position and operating results could be significantly different than those in historical periods or projected by our management.

For the years ended December 31, 2023 and 2022,

we had losses from operations of $25.3 million and $27.2 million, respectively.

We anticipate that the level of our expenses is expected

to increase as a result of the recent acquisition of APT, and will continue to be significant if and as we:

initiate and continue research, preclinical and clinical development efforts for any future product candidates;

seek to discover and develop additional product candidates and further expand our clinical product pipeline;

seek marketing and regulatory approvals for any product candidates that successfully complete clinical trials;

require the manufacture of larger quantities of product candidates for clinical development and, potentially, commercialization;

maintain, expand and protect our intellectual property portfolio;

expand our research and development infrastructure, including hiring and retaining additional personnel, such as clinical, quality control and scientific personnel;

establish sales, marketing, distribution and other commercial infrastructure in the future to commercialize products for which we obtain marketing approval, if any;

add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization and help us comply with our obligations as a public company.

We will need to raise additional capital in the future to support

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held by us, governmental and other grants and through future equity and debt financing.

In February 2023, we closed the first part of

a private investment in public equity, or PIPE, financing, raising approximately $1.5 million in gross proceeds.

The second closing for

the PIPE is contingent upon approval of the issuance of the securities to be issued therein by the Company’s stockholders in accordance

with NYSE American rules, which is expected to take place in the second quarter of 2023.

If such second closing occurs, we expect to raise

an additional $6 million in gross proceeds.

In connection with our efforts to raise additional capital, we filed a shelf registration

statement on Form S-3, which was declared effective by the SEC on December 11, 2020.

In addition, on December 7, 2023, we entered into

an Open Market Sale Agreement SM , or the Sale Agreement, with Jefferies LLC, or Jefferies, pursuant to which we may issue and

sell shares of our Common Stock having an aggregate offering price of up to $50,000,000 from time to time through Jefferies.

Through March

24, 2023, we sold an aggregate of 983,184 shares of Common Stock pursuant to the Sale Agreement for aggregate gross proceeds of $5,693,968.

We may continue to sell shares under the Sale Agreement and otherwise to use our shelf registration statement to raise additional funds

from time to time, as we did in July 2021.

We may also raise funds privately, as we did in the PIPE investment in February 2023, which

is still pending completion, as well as in other cases in 2021.

We may also seek funds through arrangements with collaborators or others

that may require us to relinquish rights to the product candidates that we might otherwise seek to develop or commercialize independently.

If we enter into a collaboration for one or more of our current or future product candidates at an earlier development stage, the terms

of such a collaboration will likely be less favorable than if we were to enter the collaboration in later stages or if we commercialized

the product independently.

If we raise additional funds through equity offerings, the terms of these securities may include liquidation

or other preferences that adversely affect our stockholders’ rights or cause significant dilution to our stockholders.

additional capital through debt financing, it would be subject to fixed payment obligations and may be subject to covenants limiting or

restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends

or acquiring or licensing intellectual property rights.

If the second closing of the PIPE does not occur for

any reason and/or additional capital is not available to us when needed or on acceptable terms, we may not be able to continue to operate

our business pursuant to our business plan and may be required to delay our clinical development.

While we believe that our existing cash

and cash equivalents, together with our existing resources, will be sufficient to fund our planned operations until at least the middle

of 2024, we cannot provide assurances that our estimates are accurate, that our plans will not change or that changed circumstances will

not result in the depletion of our capital resources more rapidly than we currently anticipate.

an At the Market Offering Agreement, or the ATM Agreement, with H.C.

Wainwright & Co., LLC, or Wainwright, as manager, pursuant to

which we may issue and sell shares of our Common Stock having an aggregate offering price of up to $7.5 million from time to time through

We are not obligated to make any sales of Common Stock under the ATM Agreement.

On May 4, 2023, subsequent to the approval

of the Company’s stockholders, the Company completed the second closing of the February 2023 PIPE for an additional $6 million in

gross proceeds.

On December 7, 2023, we filed a shelf registration statement on Form S-3, which was declared effective by the SEC on January

Additionally, on March 15, 2024, concurrently with the consummation of the Acquisition, we consummated a private placement, or

the March 2024 PIPE, pursuant to an exemption from registration requirements under the Securities Act with certain investors pursuant

to which such investors purchased an aggregate of 216,417 shares of our Series X non-voting convertible preferred stock, par value $0.0001

per share, or the Convertible Preferred Stock, and warrants, or Private Placement Warrants, to purchase up to an aggregate of 108,208,500

shares of the Company’s Common Stock, for aggregate gross proceeds of approximately $50 million.

Each share of Convertible Preferred

Stock is convertible into an aggregate of 1,000 shares of Common Stock.

Subject to restrictions pursuant to the March 2024

PIPE, we may continue to sell shares under the ATM Agreement and otherwise to use our shelf registration statement to raise additional

funds from time to time.

We may also raise funds privately, as we did in February 2023 and the March 2024 PIPE.

We may also seek funds

through arrangements with collaborators or others that may require us to relinquish rights to the product candidates that we might otherwise

seek to develop or commercialize independently.

If we enter into a collaboration for one or more

of our current or future product candidates at an earlier development stage, the terms of such a collaboration will likely be less favorable

than if we were to enter the collaboration in later stages or if we commercialized the product independently.

If we raise additional funds

through equity offerings, the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’

rights or cause significant dilution to our stockholders.

If we raise additional capital through debt financing, it would be subject to

fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring

additional debt, making capital expenditures, declaring dividends or acquiring or licensing intellectual property rights.

Developing drugs and conducting clinical trials

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Our future funding requirements will depend on many factors, including:

● the costs, timing and progress

of our research and development and clinical activities;

● manufacturing costs associated

with our targeted bacteriophage, or phage, therapies strategy and other research and development activities;

● the terms and timing of any

collaborative, licensing, acquisition or other arrangements that we may establish;

● employee-related expenses, as

well as external costs such as fees paid to outside consultants;

● the costs and timing of seeking

regulatory approvals and related to compliance with regulatory requirements;

● the costs of filing, prosecuting,

defending and enforcing any patent applications, claims, patents and other intellectual property rights.

the costs, timing and progress of our research and development and clinical activities;

manufacturing costs associated with our targeted bacteriophage, or phage, therapies strategy and other research and development activities;

the terms and timing of any collaborative, licensing, acquisition or other arrangements that we may establish;

employee-related expenses, as well as external costs such as fees paid to outside consultants;

the costs and timing of seeking regulatory approvals and related to compliance with regulatory requirements;

the costs of filing, prosecuting, defending and enforcing any patent applications, claims, patents and other intellectual property rights.

Domestic and international equity and debt markets

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bear market, or recession, ensues in the U.S.

stock market, the Russian invasion of Ukraine and world sanctions on Russia, Belarus, and

related parties and the impact associated with the COVID-19 pandemic, as well as geopolitical uncertainty and instability, such as the

Russia-Ukraine conflict, our operating results and liquidity could be affected adversely by those factors in many ways, including making

it more difficult for us to raise funds if necessary and our stock price may decline.

stock market, or the markets are negatively impacted by factors such as the Israel-Hamas

War, the Russian invasion of Ukraine and the resulting world sanctions on Russia, Belarus, and related parties or other sources of geopolitical

uncertainty and instability, our operating results and liquidity could be affected adversely by those factors in many ways, including

making it more difficult for us to raise funds if necessary and our stock price may decline.

There can be no assurance that sufficient funds

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up to a total loss of investment by our stockholders.

The terms of our term loan agreement

with Hercules place restrictions on our operating and financial flexibility.

If we raise additional capital through debt financing, the

terms of any additional debt could further restrict our ability to operate our business.

In August 2021, we entered

into a term loan agreement, or the Hercules Loan Agreement, providing for a term loan in an aggregate principal amount of up to $30.0

million, subject to funding in three tranches and subject to certain terms and conditions.

We received the first tranche of $15.0 million

promptly after signing the agreement in August 2021.

The second tranche of $10.0 million did not become available to us since certain

milestones were not met.

A third additional tranche in the amount of $5 million could become available to us to borrow upon the occurrence

of certain milestone events until September 2023;

however, we do not expect such milestones to occur.

Our obligations under the Hercules

Loan Agreement are secured by a lien on substantially all of our assets, other than intellectual property.

We also agreed not to pledge

or secure our intellectual property to others.

The Hercules Loan Agreement

includes affirmative and negative covenants and events of default applicable to us.

The affirmative covenants include, among others, covenants

requiring us to maintain our legal existence and governmental approvals, deliver certain financial reports and maintain insurance coverage.

The negative covenants include, among others, restrictions on our transferring collateral, making changes to the nature of our business,

incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments,

engaging in transactions with affiliates.

Events of default include, among other things and subject to customary exceptions:

(i) insolvency,

liquidation, bankruptcy or similar events;

(ii) failure to pay any debts due under the Hercules Loan Agreement or other loan documents

on a timely basis;

(iii) failure to observe certain covenants under the loan and security agreement with Hercules;

(v) occurrence of a

material adverse effect;

(vi) material misrepresentation by us;

(vii) occurrence of any default under any other agreement involving material

indebtedness;

and (viii) certain material money judgments.

If we default under the Hercules Loan Agreement, Hercules may accelerate all

of our repayment obligations and take control of our pledged assets, potentially requiring us to renegotiate our agreement on terms less

favorable to us or to immediately cease operations.

Further, if we are liquidated, the lenders’ right to repayment would be senior

to the rights of the holders of our Common Stock to receive any proceeds from the liquidation.

Any declaration by Hercules of an event

of default could significantly harm our business and prospects and could cause the price of our Common Stock to decline.

If we raise any

additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.

Our financial statements contain an explanatory paragraph regarding

substantial doubt about our ability to continue as a going concern, which could prevent us from obtaining new financing on reasonable

terms or at all.

Our financial statements contain

an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.

We have concluded that there is

substantial doubt about our ability to continue as a going concern.

We have accumulated a deficit of $163 million since our inception.

To date, we have not generated revenue from our operations and we do not expect to generate any significant revenues from sales of products

in the next twelve months.

Our cash needs may increase in the foreseeable future.

As of December 31, 2023, we had $15.9 million of cash

and cash equivalents.

We believe our cash and cash equivalents and short-term

deposits on hand will be sufficient to meet our working capital and capital expenditure requirements for at least 12 months.

since there is a risk of our stockholders not approving the conversion of the Convertible Preferred Stock that was issued in connection

with the March 2024 PIPE and the Acquisition, which could result in us being required to cash settle the Convertible Preferred Stock,

there is substantial doubt about our ability to continue as a going concern for at least 12 months from April 3, 2024.

Our continuation

as a going concern is dependent upon many factors, including our ability to receive the approval of our shareholders to convert the Convertible

Preferred Stock within 5 months, raise additional funds, the success of our clinical trial for CF, our ability to successfully integrate

the business of APT and our ability to repay our obligations when due.

We cannot be sure that we will be able to obtain any future funding,

and any such funding we may obtain may not be sufficient to finance our operations.

If we are unable to obtain sufficient funds, we may

be unable to continue as a going concern.

There is no guarantee that our acquisition

of APT will increase stockholder value.

In March 2024, we acquired APT in the Acquisition.

We cannot guarantee that implementing the Acquisition and related transactions will not impair stockholder value or otherwise adversely

affect our business.

The Acquisition could result in integration challenges between our businesses and management teams which could cause

management and business disruptions, any of which could impact our results of operation and business prospects and impair the value of

such acquisition to our stockholders.

We are required to use reasonable best efforts

to solicit stockholder approval for the conversion of shares of Convertible Preferred Stock and Warrants issued in the Acquisition and

the March 2024 PIPE.

If we do not obtain such approval within 150 days of the initial issuance of the Convertible Preferred Stock, we

could be required to cash settle the Convertible Preferred Stock.

Pursuant to the Merger Agreement, we are required

to hold a meeting of stockholders (the “Stockholder Meeting”) for the purpose of obtaining stockholder approval of (i) the

conversion of the Convertible Preferred Stock and the exercise of the Warrants (as defined below) into shares of Common Stock in excess

of 19.9% of the outstanding shares of Common Stock for purposes of the NYSE American Stock Market Rules, (ii) adoption of a new stock

incentive plan or amendment of the Company’s current stock incentive plan (the “2024 Incentive Plan”), and (iii) if

necessary, the amendment of our certificate of incorporation to authorize sufficient additional shares of Common Stock to allow for conversion

of the Convertible Preferred Stock and exercise of the Warrants.

If such stockholder approval is not received, we are required to convene

additional stockholder meetings at least every 90 days thereafter until such approval is obtained, which could result in substantial costs

and be a distraction to management.

Furthermore, if our stockholders do not approve the conversion of the Convertible Preferred Stock

within 150 days of the initial issuance of the Convertible Preferred Stock, then upon written request by the holders of 70% of the Convertible

Preferred Stock, we will be required to pay to each holder of Convertible Preferred Stock an amount in cash equal to the fair value of

the shares of Convertible Preferred Stock held by such holder, as described in the Certificate of Designation for the Convertible Preferred

We do not expect that we would have sufficient liquidity to settle a significant amount of the Convertible Preferred Stock if required

The cash settlement is not in our control and raises substantial doubt about our ability to continue as a going concern.

We are seeking to develop product candidates using phage technology,

an approach for which it is difficult to predict the time and cost of development.

To our knowledge, no bacteriophage has thus far been

approved as a drug in the United States or in the European Union.

To our knowledge, as of the date of this Annual Report,

no bacteriophage has thus far been approved as a drug in the United States or in the European Union.

We are developing our product candidates with phage

We have not, nor to our knowledge has any other company, received regulatory approval from the FDA, or equivalent foreign

regulatory agencies for a product based on this approach.

While in vitro and in vivo studies have characterized the behavior

of phage in cell cultures and animal models and there exists a body of literature regarding the use of phage therapy in humans, the safety

and efficacy of phage therapy in humans has not been extensively studied in well-controlled modern clinical trials.

Most of the prior

research on phage-based therapy was conducted in the former Soviet Union prior to and immediately after World War II and lacked appropriate

control group design or lacked control groups at all.

Furthermore, the standard of care has changed substantially during the ensuing decades

since those studies were performed, diminishing the relevance of prior claims of improved cure rates.

Any product candidates that we develop

may not demonstrate in patients the therapeutic properties ascribed to them in laboratory and other preclinical studies, and they may

interact with human biological systems in unforeseen, ineffective or even harmful ways.

We cannot be certain that our approach will lead

to the development of approvable or marketable products.

Furthermore, the bacterial targets of phage may develop resistance to our product

candidates over time, which we may or may not be able to overcome with the development of new phage cocktails or we may not be able to

construct a cocktail with sufficient coverage of our target pathogen universe.

regulatory agencies for a product candidate based on this approach.

While in vitro and in vivo studies have characterized

the behavior of phage in cell cultures and animal models and there exists a body of literature regarding the use of phage therapy in humans,

the safety and efficacy of phage therapy in humans has not been extensively studied in well-controlled modern clinical trials.

the prior research on phage-based therapy was conducted in the former Soviet Union prior to and immediately after World War II and lacked

appropriate control group design or lacked control groups at all.

Furthermore, the standard of care has changed substantially during the

ensuing decades since those studies were performed, diminishing the relevance of prior claims of improved cure rates.

Any product candidates

that we develop may not demonstrate in patients the therapeutic properties ascribed to them in laboratory and other preclinical studies,

and they may interact with human biological systems in unforeseen, ineffective or even harmful ways.

We cannot be certain that our approach

will lead to the development of approvable or marketable products.

Furthermore, the bacterial targets of phage may develop resistance

to our product candidates over time, which we may or may not be able to overcome with the development of new phage cocktails or we may

not be able to construct a cocktail with sufficient coverage of our target pathogen universe.

If our product candidates receive regulatory approval

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Clinical trials of product candidates sufficient to obtain regulatory marketing approval or otherwise

demonstrate safety prior to marketing, are expensive and take years to complete, especially for our product candidate designed to treat

CRC as the phage will be genetically modified, which could make the conduct of clinical trials more complex and subject such trials to

additional regulatory oversight.

Furthermore, results from these clinical trials may not show safety or efficacy of our product candidates

sufficient to lead to approval, or to warrant further development.

For example, in October 2021, we announced the results of a Phase 2

cosmetic clinical study of our BX001 product candidate that showed no meaningful difference for efficacy relative to the placebo arm of

the study, and therefore decided not to continue pursuing this program despite the time and expenses that had been incurred to date in

its development.

Our approach is intended to design phage combinations, or cocktails, to target specific strains of pathogenic bacteria

in order to alter microbiome composition and confer potential therapeutic or cosmetic benefit to patients.

However, there can be no assurance

that the eradication of the selected targets will result in a clinically meaningful effect on the underlying disease, such as in cases

where the pathology of the disease is not well-defined.

In addition, the bacteria that we target may be associated with the disease, but

may not be causative or contributive to the pathology of the disease, or there may be other bacteria that our product candidates do not

target that are more meaningful drivers of the underlying disease.

In addition, our product candidates require the use of effective delivery

vehicles to reach the target organ or tissue, and there can be no assurance that our intended delivery systems will allow our product

candidates to reach the desired locations in a patient.

Safety must first be established through preclinical testing and early clinical

trials, before efficacy can be evaluated and established and thereby lead to FDA or other regulatory agencies marketing approval.

clinical trials may produce undesirable side effects or negative or inconclusive results, and we may decide, or regulators may require

us, to conduct additional clinical and/or preclinical testing or to abandon programs.

The ongoing COVID-19 pandemic

and other geopolitical instability have and may continue to adversely affect our business, including our clinical trials.

The COVID-19 pandemic has had and continues to

have a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

supply chains have

been disrupted;

facilities and production have been suspended;

and demand for certain goods and services, such as medical services and

supplies, has spiked, while demand for other goods and services, such as travel, has fallen.

In response to the spread of COVID-19, we

temporarily had closed our executive offices with our administrative employees continuing their work outside of our offices and may need

to close them again in the future.

In addition, general economic, political, demographic and business conditions worldwide, including

geopolitical uncertainty and instability, such as the Russia-Ukraine conflict, might adversely affect our business, through indirect disruption

to our supply chain, harming our ability to raise funds at terms acceptable to us among other affects.

Also, due to the COVID-19 pandemic

we have modified our business practices, including restricting employee travel, developing social distancing plans for our employees and

cancelling physical participation in meetings, events and conferences.

As a result of the COVID-19 pandemic, we have experienced

and may continue to experience additional disruptions that could severely impact our business, preclinical studies and clinical trials,

● delays or difficulties in enrolling

patients in our clinical trials;

● delays or difficulties in clinical

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

● diversion of healthcare resources

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

supporting the conduct of our clinical trials;

● interruption of key clinical

trial activities, such as clinical trial site data monitoring, due to limitations on travel imposed or recommended by federal or state

governments, in the U.S.

and the government in Israel, employers and others or interruption of clinical trial subject visits and study

procedures (such as endoscopies that are deemed non-essential), which may impact the integrity of subject data and clinical study endpoints;

● interruption or delays in the

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

● interruption of, or delays in

receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, production slowdowns

or stoppages and disruptions in delivery systems;

● limitations on employee resources

that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or

the desire of employees to avoid contact with large groups of people;

demonstrate safety prior to marketing, are expensive and take years to complete.

Furthermore, results from these clinical trials may not

show safety or efficacy of our product candidates sufficient to lead to approval, or to warrant further development.

Our approach is intended

to design phage combinations, or cocktails, to target specific strains of pathogenic bacteria in order to alter microbiome composition

and confer potential therapeutic or cosmetic benefit to patients.

However, there can be no assurance that the eradication of the selected

targets will result in a clinically meaningful effect on the underlying disease, such as in cases where the pathology of the disease is

not well-defined.

In addition, the bacteria that we target may be associated with the disease, but may not be causative or contributive

to the pathology of the disease, or there may be other bacteria that our product candidates do not target that are more meaningful drivers

of the underlying disease.

In addition, our product candidates require the use of effective delivery vehicles to reach the target organ

or tissue, and there can be no assurance that our intended delivery systems will allow our product candidates to reach the desired locations

in a patient.

Safety must first be established through preclinical testing and early clinical trials, before efficacy can be evaluated

and established and thereby lead to FDA or other regulatory agencies marketing approval.

Our clinical trials may produce undesirable side

effects or negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and/or preclinical

testing or to abandon programs.

Ongoing geopolitical instability have adversely affected

and may continue to adversely affect our business, including our clinical trials.

General economic, political, demographic and business

conditions worldwide, including geopolitical uncertainty and instability, such as the Israel- Hamas War and the Russia-Ukraine conflict,

might adversely affect our business, through indirect disruption to our supply chain, harming our ability to raise funds at terms acceptable

to us among other affects.

We may further experience additional disruptions that could severely impact our business, preclinical studies

and clinical trials, including:

delays or difficulties in enrolling patients in our clinical trials;

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

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

interruptions or delays to our sourced discovery and clinical activities.

The pandemic and the resulting government actions

have impacted and may continue to adversely impact our planned and ongoing clinical trials.

Clinical site initiation, including difficulties

in recruiting clinical site investigators and clinical site staff, and patient enrollment may be delayed due to prioritization of hospital

resources toward the COVID-19 pandemic.

Some patients have not been willing and/or able to comply with clinical trial protocols

due to the COVID-19 pandemic, particularly if quarantines or other restrictions impede patient movement or interrupt healthcare

Similarly, our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers,

may have heightened exposure to COVID-19 has been impeded and may continue to remain impeded, which would adversely impact our

clinical trial operations.

The diversion of healthcare resources away from the conduct of clinical trials to focus on pandemic concerns,

including the attention of physicians serving as our clinical trial investigators and hospitals serving as our clinical trial sites, may

significantly disrupt our research activities.

As a result, the expected timeline for data readouts of our clinical trials and certain

regulatory filings will likely be negatively impacted, which would adversely affect and delay our ability to obtain regulatory approvals

for our product candidates, increase our operating expenses and have a material adverse effect on our financial condition.

Furthermore, the response to the COVID-19 pandemic

may redirect resources with respect to regulatory matters and intellectual property matters in a way that would adversely impact our ability

to progress regulatory approvals and protect our intellectual property.

In addition, we may face impediments to regulatory meetings and

approvals due to measures intended to limit in-person interactions.

Comparable regulatory authorities in other jurisdictions

may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and provide guidance regarding

the conduct of clinical trials.

If global health concerns continue to prevent the FDA or other regulatory authorities from conducting

their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA to timely review

and process our regulatory submissions, which could have a material adverse effect on our business.

The COVID-19 pandemic continues to evolve.

The extent to which the outbreak impacts our business, preclinical studies and clinical trials will depend on future developments, which

are highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the

pandemic, travel restrictions and social distancing in the United States Canada, Europe, Israel and other countries, business closures

or business disruptions and the effectiveness of actions taken in the United States, Canada, Europe, Israel and other countries to contain

and treat the disease.

As a result, the COVID-19 pandemic may have a material adverse effect on our business, results of operations,

financial condition and prospects and heighten many of our known risks described or referenced in this “Risk Factors” section.

If we are not able to obtain, or if there are delays in obtaining,

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including the following:

● the FDA or equivalent foreign

regulatory authorities may disagree with the design, including study population, dose level, dose regimen, and bioanalytical assay methods,

or implementation of our clinical trials;

● we may be unable to demonstrate

to the satisfaction of the FDA or equivalent foreign regulatory authorities that a drug candidate is safe and effective for its proposed

indication or a related companion diagnostic is suitable to identify appropriate patient populations;

● the results of clinical trials

may not meet the level of statistical significance required by the FDA or equivalent foreign regulatory authorities for approval, such

as was the case with our acne product candidate;

● we may be unable to demonstrate

that a product candidate’s clinical and other benefits outweigh its safety risks;

● the FDA or equivalent foreign

regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

● the data collected from clinical

trials of our product candidates may not be sufficient to support the submission of a marketing application or other submission or to

obtain regulatory approval in the United States or elsewhere;

● the FDA or equivalent foreign

regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract

for clinical and commercial supplies;

● the approval policies or regulations

of the FDA or equivalent foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient

for approval.

the FDA or equivalent foreign regulatory authorities may disagree with the design, including study population, dose level, dose regimen, and bioanalytical assay methods, or implementation of our clinical trials;

we may be unable to demonstrate to the satisfaction of the FDA or equivalent foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication or a related companion diagnostic is suitable to identify appropriate patient populations;

the results of clinical trials may not meet the level of statistical significance required by the FDA or equivalent foreign regulatory authorities for approval, such as was the case with our acne product candidate;

we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

the FDA or equivalent foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a marketing application or other submission or to obtain regulatory approval in the United States or elsewhere;

the FDA or equivalent foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

the approval policies or regulations of the FDA or equivalent foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Of the large number of drugs in development, only

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candidates that we develop based on the completed clinical trials.

In the European Union, the safety and efficacy data of our product

candidate for the treatment of CRC will be reviewed by the European Medicines Agency’s, or the EMA’s, Committee for Advanced

Therapies, or CAT, a group of experts in advanced therapy medicinal products.

Our other product candidates would be reviewed by CAT as

well if the EMA were to consider that they also qualify as advanced therapy medicinal products.

In the European Union, the safety and efficacy data of any product

candidate considered by the EMA to qualify as an advanced therapy medicinal product must be reviewed by the EMA’s, Committee for

Advanced Therapies, a group of experts in advanced therapy medicinal products.

Moreover, under PREA, in the United States, and

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Our ability to generate future revenue from product sales depends heavily on our success in:

● completing research and preclinical

and clinical development of our product candidates;

● seeking and obtaining regulatory

and marketing approvals for product candidates for which we complete clinical trials;

● meeting regulatory requirements

for marketing the products;

● developing a sustainable, scalable,

reproducible and transferable manufacturing process for our product candidates;

● launching and commercializing

product candidates for which we obtain regulatory and marketing approval or are otherwise permitted to market, either by establishing

a sales force, marketing and distribution infrastructure or by collaborating with a partner;

● obtaining market acceptance

of any approved products;

● addressing any competing technological

and market developments;

● implementing additional internal

systems and infrastructure, as needed;

● identifying and validating new

product candidates;

● negotiating favorable terms

in any collaboration, licensing or other arrangements into which we may enter;

● maintaining, protecting and

expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;

● attracting, hiring and retaining

qualified personnel.

completing research and preclinical and clinical development of our product candidates;

seeking and obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials;

meeting regulatory requirements for marketing the products;

developing a sustainable, scalable, reproducible and transferable manufacturing process for our product candidates;

launching and commercializing product candidates for which we obtain regulatory and marketing approval or are otherwise permitted to market, either by establishing a sales force, marketing and distribution infrastructure or by collaborating with a partner;

obtaining market acceptance of any approved products;

addressing any competing technological and market developments;

implementing additional internal systems and infrastructure, as needed;

identifying and validating new product candidates;

negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how;

attracting, hiring and retaining qualified personnel.

Even if one or more of the product candidates that

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Preclinical studies of our product candidates,

such as BX004 and BX005, including studies in animal disease models in the case of BX003 and other studies, may not accurately predict

the safety of the product candidate such that further human clinical trials would be allowed to proceed.

In particular, promising preclinical

testing suggesting the potential efficacy of prototype phage products may not predict the ability of these products to address conditions

in the human clinical settings.

For example, while we have studied phage activity in vitro and in vivo , in the case of BX003,

these results may not be replicated when our phage cocktails are administered to human subjects.

Despite promising data in any preclinical

studies, our phage technology may be found not to be efficacious when studied in clinical trials.

such as BX004 and BX005, including studies in animal disease models may not accurately predict the safety of the product candidate such

that further human clinical trials would be allowed to proceed.

In particular, promising preclinical testing suggesting the potential

efficacy of prototype phage products may not predict the ability of these products to address conditions in the human clinical settings.

For example, while we have studied phage activity in vitro and in vivo , these results may not be replicated when our phage

cocktails are administered to human subjects.

Despite promising data in any preclinical studies, our phage technology may be found not

to be efficacious when studied in clinical trials.

To satisfy FDA or equivalent foreign regulatory

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commercial sale.

Our product candidates are subject to significant regulatory

approval requirements, which could delay, prevent or limit our ability to market our product candidates.

Our research and development activities, preclinical

studies, clinical trials and the anticipated manufacturing and marketing of our drug product candidates are subject to extensive regulation

by the FDA and other regulatory agencies in the United States and by comparable authorities in Europe and elsewhere.

To satisfy FDA or

equivalent foreign regulatory approval standards, we must demonstrate in adequate and well controlled clinical trials that our drug product

candidates are safe and effective for their intended use.

The regulatory approval process is expensive and time-consuming, and the timing

of receipt of regulatory approval is difficult to predict.

Given the uncertainties around phage therapy, our product candidates could

require a significantly longer time to gain regulatory approval than expected or may never gain approval.

This is especially so for the

product candidate designed to treat CRC as the phage will be genetically modified, which adds potential complexity to the process, particularly

in the European Union.

We cannot be certain that, even after expending substantial time and financial resources, we will obtain regulatory

approval for any of our product candidates.

A delay or denial of regulatory approval could delay or prevent our ability to generate product

revenue and to achieve profitability.

Regulatory requirements for development of our

product candidates are uncertain and evolving.

Changes in these laws or the current interpretation or application of these laws would

have a significant adverse impact on our ability to develop and commercialize our product candidates.

The legal and regulatory status

of phage therapy remains unclear in many countries, including the European Union.

Changes in regulatory approval policies during the development

period of any of our product candidates, changes in, or the enactment of, additional regulations or statutes, or changes in regulatory

review practices for a submitted product application may cause a delay in obtaining approval or result in the rejection of an application

for regulatory approval.

Regulatory approval, if obtained, may be made subject

to limitations on the indicated uses for which we may market a product, as well as the approved labeling for the product.

These limitations

could adversely affect our potential product revenue.

Regulatory approval may also be conditioned on costly post-marketing follow-up studies.

In addition, the labeling, packaging, adverse event reporting, storage, advertising, promotion and recordkeeping related to the product

will be subject to extensive ongoing regulatory requirements.

Furthermore, for any marketed product, our manufacturer and our manufacturing

facilities will be subject to registration and listing requirements and continual review and periodic inspections by the FDA or other

regulatory authorities.

Failure to comply with applicable regulatory requirements may, among other things, result in fines, suspensions

of regulatory approvals, product recalls, product seizures, operating restrictions and criminal prosecution.

If we encounter difficulties enrolling patients in our clinical

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things, on our ability to enroll a sufficient number of patients, which is a function of many factors, including:

● the therapeutic endpoints chosen

for evaluation;

● the eligibility criteria defined

in the protocol;

● the perceived benefit of the

product candidate under study;

● the size of the patient population

required for analysis of the clinical trial’s therapeutic endpoints;

● our ability to recruit clinical

trial investigators and sites with the appropriate competencies and experience;

● our ability to obtain and maintain

patient consents;

● competition for patients from

clinical trials for other treatments.

the therapeutic endpoints chosen for evaluation;

the eligibility criteria defined in the protocol;

the perceived benefit of the product candidate under study;

the size of the patient population required for analysis of the clinical trial’s therapeutic endpoints;

our ability to recruit clinical trial investigators and sites with the appropriate competencies and experience;

our ability to obtain and maintain patient consents;

competition for patients from clinical trials for other treatments.

We have experienced and may continue to experience

difficulties in enrolling patients in our clinical trials, including due to the impacts of COVID-19, which could increase the costs or

affect the timing or outcome of these clinical trials.

This is particularly true with respect to diseases with relatively small patient

In addition, potential patients for our trials may not be adequately diagnosed or identified with the diseases that we are

targeting or may not meet the entry criteria for our studies.

difficulties in enrolling patients in our clinical trials, which could increase the costs or affect the timing or outcome of these clinical

This is particularly true with respect to diseases with relatively small patient populations.

In addition, potential patients

for our trials may not be adequately diagnosed or identified with the diseases that we are targeting or may not meet the entry criteria

for our studies.

We may not be able to initiate or continue clinical

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reasons, including:

● delays in the development of

manufacturing capabilities for our product candidates to enable their consistent production at clinical trial scale;

● failures in our internal manufacturing

operations that result in our inability to consistently and timely produce bacteriophage in sufficient quantities to support our clinical

● the availability of financial

resources to commence and complete our planned clinical trials;

● delays in reaching a consensus

with clinical investigators on study design;

● delays in reaching a consensus

with regulatory agencies on trial design or in obtaining regulatory approval to commence a trial;

● delays in obtaining clinical

● slower than expected patient

recruitment for participation in clinical trials;

● regulatory constraints or injunctions

(for example, from supervisory authorities in case of noncompliance with cybersecurity and data privacy laws);

● failure by clinical trial sites,

other third parties or us to adhere to clinical trial agreements and/or the trial protocol;

● delays in reaching agreement

on acceptable clinical trial agreement terms with prospective sites or obtaining IRB or independent ethics committee approval;

● adverse safety events experienced

during our clinical trials.

delays in the development of manufacturing capabilities for our product candidates to enable their consistent production at clinical trial scale;

failures in our internal manufacturing operations that result in our inability to consistently and timely produce bacteriophage in sufficient quantities to support our clinical trials;

the availability of financial resources to commence and complete our planned clinical trials;

delays in reaching a consensus with clinical investigators on study design;

delays in reaching a consensus with regulatory agencies on trial design or in obtaining regulatory approval to commence a trial;

delays in obtaining clinical materials;

slower than expected patient recruitment for participation in clinical trials;

regulatory constraints or injunctions (for example, from supervisory authorities in case of noncompliance with cybersecurity and data privacy laws);

failure by clinical trial sites, other third parties or us to adhere to clinical trial agreements and/or the trial protocol;

delays in reaching agreement on acceptable clinical trial agreement terms with prospective sites or obtaining IRB or independent ethics committee approval;

adverse safety events experienced during our clinical trials.

If we do not successfully commence or complete

51 unchanged sentences

then our product development timelines, and the regulatory approval of our product candidates, could be delayed.

We must continue to develop manufacturing processes for our product

candidates, and any delay in doing so, or our inability to do so, would result in delays in our clinical trials.

The manufacturing processes for our product candidates,

and the scale-up of such processes for clinical trials, may present challenges, and there can be no assurance that we will be able to

complete this work in a timely manner, if at all.

Any delay in the development or scale-up of these manufacturing processes could delay

the start of clinical trials and harm our business.

In order to scale-up our manufacturing capacity, we need to either build additional

internal manufacturing capacity, contract with one or more partners, or both.

Our technology and the production process for our equipment

and tools are complex and we may encounter unexpected difficulties in manufacturing our product candidates.

For example, the manufacturing

hosts that we use to produce our phage may contain one or more integrated phage in their genomes that, if we are unable to remove, can

present challenges in manufacturing of the produced phage.

There is no assurance that we will be able to continue to build manufacturing

capacity internally or find one or more suitable partners, or both, to meet the necessary volume and quality requirements.

Manufacturing

and product quality issues may arise as we increase the scale of our production.

Any delay or inability in establishing or expanding our

manufacturing capacity could diminish our ability to develop our product candidates.

In the third quarter of 2019, we established our

own manufacturing facility at our headquarters in Ness Ziona, Israel and we have executed cGMP manufacturing for our first in human clinical

study (IBD project).

must continue to develop manufacturing processes for our product candidates, and any delay in doing so, or our inability to do so, would

result in delays in our clinical trials.

manufacturing processes for our product candidates, and the scale-up of such processes for clinical trials, may present challenges, and

there can be no assurance that we will be able to complete this work in a timely manner, if at all.

Any delay in the development or scale-up

of these manufacturing processes could delay the start of clinical trials and harm our business.

In order to scale-up our manufacturing

capacity, we need to either build additional internal manufacturing capacity, contract with one or more partners, or both.

Our technology

and the production process for our equipment and tools are complex and we may encounter unexpected difficulties in manufacturing our

product candidates.

For example, the manufacturing hosts that we use to produce our phage may contain one or more integrated phage in

their genomes that, if we are unable to remove, can present challenges in manufacturing of the produced phage.

There is no assurance

that we will be able to continue to build manufacturing capacity internally or find one or more suitable partners, or both, to meet the

necessary volume and quality requirements.

Manufacturing and product quality issues may arise as we increase the scale of our production.

Any delay or inability in establishing or expanding our manufacturing capacity could diminish our ability to develop our product candidates.

the third quarter of 2019, we established our own manufacturing facility at our headquarters in Ness Ziona, Israel and we have executed

cGMP manufacturing for our first in human clinical study.

In February 2021, APT consolidated its GMP manufacturing, testing and development

in its Gaithersburg facility.

In March 2021, we moved into a new manufacturing facility at our headquarters in Ness Ziona, Israel.

Our new facility

undergoes ongoing internal inspections to verify proper manufacturing for Phase I and II clinical studies in accordance with cGMP requirements.

In the event this facility does not comply with cGMP standards for the manufacture of our product candidates, we may need to fund

additional modifications to our manufacturing process, conduct additional validation studies or find alternative manufacturing facilities,

any of which would result in significant cost to us as well as a delay of up to several years in obtaining approval for such product candidate.

If we submit marketing applications for any of

our product candidates manufactured at this facility, this manufacturing facility will be subjected to ongoing periodic inspection for

compliance with European, FDA and cGMP regulations.

Compliance with these regulations and standards is complex and costly, and there can

be no assurance that we will be able to comply.

Any failure to comply with applicable regulations could result in sanctions being imposed

(including fines, injunctions and civil penalties), failure of regulatory authorities to grant marketing approval of our product candidates,

delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions

and criminal prosecution.

If our competitors are able to develop and market products that

are more effective, safer or more affordable than ours, or obtain marketing approval before we do, our commercial opportunities may be

Competition in the biotechnology and pharmaceutical

industries is intense and continues to increase.

Some companies that are larger and have significantly more resources than us are aggressively

pursuing development programs for indications that we are pursuing, including traditional therapies and therapies with novel mechanisms

In addition, other companies are developing phage-based products for therapeutic and non-therapeutic uses, and may elect to

use their expertise in phage development and manufacturing to try to develop products that would compete with our products.

We also face potential competition from academic

institutions, government agencies and private and public research institutions engaged in the discovery and development of drugs and therapies.

Many of our competitors have significantly greater financial resources and expertise in research and development, preclinical testing,

conducting clinical trials, obtaining regulatory approvals, manufacturing, sales and marketing than we do.

Smaller or early-stage companies

may also prove to be significant competitors, particularly through collaborative arrangements with large and established pharmaceutical

In the European Union, potential competition also

comes from medicinal preparations made by hospitals or pharmacists and administered without marketing authorizations, generally referred

to as “compounding.” In some member states, national authorities generally promote compounding in order to reduce healthcare

Our competitors may succeed in developing products

that are more effective, have fewer side effects and are safer or more affordable than our product candidates, which would render our

product candidates less competitive or noncompetitive and would prevent the granting or maintenance of an orphan designation.

These competitors

also compete with us to recruit and retain qualified scientific and management personnel, establish clinical trial sites and patient registration

for clinical trials, as well as to acquire technology and technology licenses complementary to our programs or advantageous to our business.

Moreover, competitors that are able to achieve patent protection, obtain regulatory approvals and commence commercial sales of their products

before we do, and competitors that have already done so may enjoy a significant competitive advantage.

We may not be successful in our efforts to identify or discover

additional product candidates.

Although we intend to utilize our technology to

evaluate other therapeutic opportunities in addition to the product candidates that we are currently developing, we may fail to identify

other product candidates for clinical development for a number of reasons.

For example, our research methodology may not be successful

in identifying potential product candidates, or those we identify may be shown to have harmful side effects or other characteristics that

make them unmarketable or unlikely to receive regulatory approval.

In addition, we may not be able to identify phage that eradicate the

target bacteria, including due to sourcing difficulties such as lack of diversity, inability to obtain samples in a timely manner or at

all, or contamination in the samples.

We may also encounter difficulties in designing phage cocktails that meet the requirements of an

investigational therapy, including due to the build-up of resistances in bacteria to our phage, the range of host bacteria that are affected

by our phage, the variety of activity on different bacteria growth states, issues with toxicity in our phage, and the stability, robustness

and ease of manufacturing of our product candidates.

In addition, the designing of synthetically engineered phage may fail to result in

the development of phage with the desired characteristics or behaviors that are suitable for use as viable therapies, or may result in

phage that contain undesired features such as immunogenicity, toxicity and other safety concerns.

A key part of our strategy is to utilize our screening

technology to identify product candidates to pursue in clinical development.

If we fail to identify and develop additional potential product

candidates, we may be unable to grow our business and our results of operations could be materially harmed.

Such product candidates will

require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval

by the FDA and/or applicable foreign regulatory agencies.

All product candidates are prone to the risks of failure that are inherent in

pharmaceutical product development.

Legal requirements as well as ethical and social concerns about

synthetic biology and genetic engineering could limit or prevent the use of our technologies and limit our revenues.

Our technology may include the use of synthetic

biology and genetic engineering.

In some countries, drugs made using genetically modified organisms may be subject to a more stringent

legal regime, which could prove to be complex and very challenging, especially for a small life sciences company.

For example, in the

European Union, the rules on genetically modified organisms would apply in addition to the general rules on medicinal products or cosmetic

new facility undergoes ongoing internal inspections to verify proper manufacturing for Phase I and II clinical studies in accordance

with cGMP requirements.

In the event these facilities do not comply with cGMP standards for the manufacture of our product candidates,

we may need to fund additional modifications to our manufacturing process, conduct additional validation studies or find alternative

manufacturing facilities, any of which would result in significant cost to us as well as a delay of up to several years in obtaining

approval for such product candidate.

we submit marketing applications for any of our product candidates manufactured at this facility, this manufacturing facility will be

subjected to ongoing periodic inspection for compliance with European, FDA and cGMP regulations.

Compliance with these regulations and

standards is complex and costly, and there can be no assurance that we will be able to comply.

Any failure to comply with applicable

regulations could result in sanctions being imposed (including fines, injunctions and civil penalties), failure of regulatory authorities

to grant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or

recalls of product candidates or products, operating restrictions and criminal prosecution.

our competitors are able to develop and market products that are more effective, safer or more affordable than ours, or obtain marketing

approval before we do, our commercial opportunities may be limited.

in the biotechnology and pharmaceutical industries is intense and continues to increase.

Some companies that are larger and have significantly

more resources than us are aggressively pursuing development programs for indications that we are pursuing, including traditional therapies

and therapies with novel mechanisms of action.

In addition, other companies are developing phage-based products for therapeutic and non-therapeutic

uses, and may elect to use their expertise in phage development and manufacturing to try to develop products that would compete with

our products.

also face potential competition from academic institutions, government agencies and private and public research institutions engaged

in the discovery and development of drugs and therapies.

Many of our competitors have significantly greater financial resources and expertise

in research and development, preclinical testing, conducting clinical trials, obtaining regulatory approvals, manufacturing, sales and

marketing than we do.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative

arrangements with large and established pharmaceutical companies.

the European Union, potential competition also comes from medicinal preparations made by hospitals or pharmacists and administered without

marketing authorizations, generally referred to as “compounding.” In some member states, national authorities generally promote

compounding in order to reduce healthcare expenses.

competitors may succeed in developing products that are more effective, have fewer side effects and are safer or more affordable than

our product candidates, which would render our product candidates less competitive or noncompetitive and would prevent the granting or

maintenance of an orphan designation.

These competitors also compete with us to recruit and retain qualified scientific and management

personnel, establish clinical trial sites and patient registration for clinical trials, as well as to acquire technology and technology

licenses complementary to our programs or advantageous to our business.

Moreover, competitors that are able to achieve patent protection,

obtain regulatory approvals and commence commercial sales of their products before we do, and competitors that have already done so may

enjoy a significant competitive advantage.

may not be successful in our efforts to identify or discover additional product candidates.

we intend to utilize our technology to evaluate other therapeutic opportunities in addition to the product candidates that we are currently

developing, we may fail to identify other product candidates for clinical development for a number of reasons.

For example, our research

methodology may not be successful in identifying potential product candidates, or those we identify may be shown to have harmful side

effects or other characteristics that make them unmarketable or unlikely to receive regulatory approval.

In addition, we may not be able

to identify phage that eradicate the target bacteria, including due to sourcing difficulties such as lack of diversity, inability to

obtain samples in a timely manner or at all, or contamination in the samples.

We may also encounter difficulties in designing phage cocktails

that meet the requirements of an investigational therapy, including due to the build-up of resistances in bacteria to our phage, the

range of host bacteria that are affected by our phage, the variety of activity on different bacteria growth states, issues with toxicity

in our phage, and the stability, robustness and ease of manufacturing of our product candidates.

In addition, the designing of synthetically

engineered phage may fail to result in the development of phage with the desired characteristics or behaviors that are suitable for use

as viable therapies, or may result in phage that contain undesired features such as immunogenicity, toxicity and other safety concerns.

key part of our strategy is to utilize our screening technology to identify product candidates to pursue in clinical development.

we fail to identify and develop additional potential product candidates, we may be unable to grow our business and our results of operations

could be materially harmed.

Such product candidates will require additional, time-consuming development efforts prior to commercial sale,

including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory agencies.

All product candidates

are prone to the risks of failure that are inherent in pharmaceutical product development.

requirements as well as ethical and social concerns about synthetic biology and genetic engineering could limit or prevent the use of

our technologies and limit our revenues.

technology may include the use of synthetic biology and genetic engineering.

In some countries, drugs made using genetically modified

organisms may be subject to a more stringent legal regime, which could prove to be complex and very challenging, especially for a small

life sciences company.

For example, in the European Union, the rules on genetically modified organisms would apply in addition to the

general rules on medicinal products or cosmetic products.

The rules on advanced therapy medicinal products may also apply.

Additionally, public perception about the safety

and environmental hazards of, and ethical concerns over, synthetic biology and genetic engineering could influence public acceptance of

our technologies, product candidates and processes.

If we and our collaborators are not able to overcome the legal challenges as well

as the ethical and social concerns relating to synthetic biology and genetic engineering, our technologies, product candidates and processes

may not be accepted.

These challenges and concerns could result in increased expenses, regulatory scrutiny and increased regulation, trade

restrictions on imports of our product candidates, delays or other impediments to our programs or the public acceptance and commercialization

of our products.

We design and produce product candidates with characteristics comparable or superior to those found in naturally occurring

organisms or enzymes in a controlled laboratory;

however, the release of such organisms into uncontrolled environments could have unintended

consequences.

Any adverse effect resulting from such a release could have a material adverse effect on our business, financial condition

or results of operations, and we may have exposure to liability for any resulting harm.

We may expend our limited resources to pursue a particular product

candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is

a greater likelihood of success.

Because we have limited financial and managerial

resources, we intend to focus on developing product candidates for specific indications that we identify as most likely to succeed, in

terms of both their potential for marketing approval and commercialization.

As a result, we may forego or delay pursuit of opportunities

with other product candidates or for other indications that may prove to have greater commercial potential.

For example, we spent significant

time and resources developing our BX001 product candidate, which we discontinued.

Our resource allocation decisions may cause us

to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future research and

development programs and product candidates for specific indications may not yield any commercially viable product candidates.

not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights

to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous

for us to retain sole development and commercialization rights to the product candidate.

We intend to continue to rely on our BOLT (BacteriOphage Lead

to Treatment) proprietary product platform to develop our phage therapies.

Our competitive position could be materially harmed if our

competitors develop similar platforms and develop rival product candidates.

Our BOLT platform enables us to rapidly develop,

manufacture and formulate phage therapy candidates targeting particular pathogenic bacteria and incorporates our experience over the past

six years with process refinement and implementation of technological advancements.

For a given indication, the platform will allow for

the completion of a clinical proof of concept study in patients, meaning Phase 2 results, within approximately 12-18 months from project

however in certain indications the length of clinical proof of concept may be longer depending on the indication, identity

of target bacteria, recruitment rate, cohort size and other factors, and we may not achieve clinical proof of concept on that timeline,

We are initially aiming to complete a clinical proof of concept study in patients within approximately 12-18 months from project

initiation in our cystic fibrosis and atopic dermatitis programs.

We have limited experience with our BOLT platform and may not achieve

the benefits we anticipate.

To the extent we utilize our resources to further develop our BOLT platform, we may become more dependent

on its success.

There is a substantial risk of product liability claims in our

If we do not obtain sufficient liability insurance, a product liability claim could result in substantial liabilities to us.

Our business exposes us to significant potential

product liability risks that are inherent in the development, manufacturing and marketing of human therapeutic products.

Regardless of

merit or eventual outcome, product liability claims may result in:

Additionally,

public perception about the safety and environmental hazards of, and ethical concerns over, synthetic biology and genetic engineering

could influence public acceptance of our technologies, product candidates and processes.

If we and our collaborators are not able to

overcome the legal challenges as well as the ethical and social concerns relating to synthetic biology and genetic engineering, our technologies,

product candidates and processes may not be accepted.

These challenges and concerns could result in increased expenses, regulatory scrutiny

and increased regulation, trade restrictions on imports of our product candidates, delays or other impediments to our programs or the

public acceptance and commercialization of our products.

We design and produce product candidates with characteristics comparable or

superior to those found in naturally occurring organisms or enzymes in a controlled laboratory;

however, the release of such organisms

into uncontrolled environments could have unintended consequences.

Any adverse effect resulting from such a release could have a material

adverse effect on our business, financial condition or results of operations, and we may have exposure to liability for any resulting

may expend our limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates

or indications that may be more profitable or for which there is a greater likelihood of success.

we have limited financial and managerial resources, we intend to focus on developing product candidates for specific indications that

we identify as most likely to succeed, in terms of both their potential for marketing approval and commercialization.

As a result, we

may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial

For example, we spent significant time and resources developing BX001, which we discontinued, and our BX005 product candidates

and CRC development efforts, which we have paused indefinitely.

resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

spending on current and future research and development programs and product candidates for specific indications may not yield any commercially

viable product candidates.

If we do not accurately evaluate the commercial potential or target market for a particular product candidate,

we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in

which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate.

intend to continue to rely on our BOLT proprietary product platform to develop our phage therapies.

Our competitive position could be

materially harmed if our competitors develop similar platforms and develop rival product candidates.

BOLT platform enables us to rapidly develop, manufacture and formulate phage therapy candidates targeting particular pathogenic bacteria

and incorporates our experience over the past six years with process refinement and implementation of technological advancements.

a given indication, the platform will typically allow for the completion of a clinical proof of concept study in patients, meaning Phase

2 results, within approximately 12-18 months from project initiation;

however in certain indications the length of clinical proof of

concept may be longer depending on the indication, identity of target bacteria, recruitment rate, cohort size and other factors, and

we may not achieve clinical proof of concept on that timeline, or at all.

We are initially aiming to complete a clinical proof of concept

study in patients within approximately 12-18 months from project initiation in our CF program.

We have limited experience with our BOLT

platform and may not achieve the benefits we anticipate.

To the extent we utilize our resources to further develop our BOLT platform,

we may become more dependent on its success.

is a substantial risk of product liability claims in our business.

If we do not obtain sufficient liability insurance, a product liability

claim could result in substantial liabilities to us.

business exposes us to significant potential product liability risks that are inherent in the development, manufacturing and marketing

of human therapeutic products.

Regardless of merit or eventual outcome, product liability claims may result in:

delay or failure to complete

6 unchanged sentences

substantial monetary awards

diversion of management or other resources from key aspects of our operations.

If we succeed in marketing products, product liability

claims could result in an FDA or equivalent foreign regulatory agency investigation of the safety or efficacy of our products, our manufacturing

processes and facilities or our marketing programs.

Such investigation could also potentially lead to a recall of our products or more

serious enforcement actions, or limitations on the indications, for which they may be used, or suspension or withdrawal of approval.

We currently only have limited clinical trials

insurance policies that cover clinical trials in certain territories.

We intend to expand our insurance coverage to include the sale of

commercial products if marketing approval is obtained for our product candidates or any other compound that we may develop.

However, insurance

coverage is expensive, and we may not be able to maintain insurance coverage at a reasonable cost or at all, and the insurance coverage

that we have or obtain may not be adequate to cover potential claims or losses.

Our employees, independent contractors, consultants, commercial

partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk of employee fraud or

other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors.

Misconduct by these parties

could include intentional, reckless and/or negligent conduct that fails to comply with the laws of the FDA and other similar foreign regulatory

bodies, provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies, comply with manufacturing

standards we have established, comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct

laws or report financial information or data accurately or to disclose unauthorized activities to us.

If we obtain FDA approval of any

of our product candidates and begin commercializing those products in the United States, our potential exposure under such laws will increase

significantly, and our costs associated with compliance with such laws are also likely to increase.

These laws may impact, among other

things, our current activities with principal investigators and research patients, as well as proposed and future sales, marketing and

education programs.

The FDA and other equivalent foreign regulatory agencies may

implement additional regulations or restrictions on the development and commercialization of products which act on the microbiome, which

may be difficult to predict.

The FDA and equivalent foreign regulatory agencies

in other countries have each expressed interest in further regulating biotechnology products and product candidates, such as those that

act on the human microbiome.

Agencies at both the federal and state level in the United States, as well as the U.S.

congressional committees

and other governments or governing agencies, have also expressed interest in further regulating the biotechnology industry.

may delay or prevent commercialization of some or all of our product candidates.

Adverse developments in non-IND human clinical studies

or clinical trials of microbiome products conducted by others may cause the FDA or other oversight bodies to change the requirements for

approval of any of our product candidates.

These regulatory review agencies and committees and the new requirements or guidelines they

promulgate may lengthen the regulatory review process, require us to perform additional studies or trials, increase our development costs,

lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates

or lead to significant post-approval limitations or restrictions.

As we advance our product candidates, we will be required to consult

with these regulatory agencies and comply with applicable requirements and guidelines.

If we fail to do so, we may be required to delay

or discontinue development of such product candidates.

These additional processes may result in a review and approval process that is

longer than we otherwise would have expected.

Delays as a result of an increased or lengthier regulatory approval process or further restrictions

on the development of our product candidates can be costly and could negatively impact our ability to complete clinical trials and commercialize

our current and future product candidates in a timely manner if at all.

Exchange rate fluctuations between the U.S.

Dollar, the New Israeli

Shekel, the Euro and other foreign currencies, may negatively affect our future expenses.

Our proceeds from sales of our securities are generally

received in U.S.

Our headquarters are located in Israel, where the majority of our general and administrative expenses and research

and development costs are incurred in the New Israeli Shekel, or NIS.

Future expenses may be incurred in foreign currencies such as the

Euro or British Pound.

As a result, our financial results may be affected by fluctuations in the exchange rates of currencies in the countries.

For example, during 2020, we witnessed a strengthening of the average exchange rate of the NIS against the U.S.

Dollar, which increased

Dollar value of Israeli expenses.

If the NIS strengthens against the U.S.

Dollar, as it did in 2020 and 2021, the U.S.

value of our Israeli expenses, mainly personnel and facility-related, will increase.

We use foreign exchange contracts (mainly option

and forward contracts) to hedge balance sheet items from currency exposure.

However, these foreign exchange contracts are not designated

as hedging instruments for accounting purposes and they may not be effective.

Although exposure to currency fluctuations to date has not

had a material adverse effect on our business, there can be no assurance that fluctuations in the future will not have a material adverse

effect on our operating results and financial condition.

Our limited operating history may make it difficult to evaluate

the success of our business to date and to assess our future viability.

Since inception in 2015, BiomX Ltd.

substantially all of its resources to developing product candidates with phage technology through its preclinical programs, building its

intellectual property portfolio, developing a supply chain, planning its business, raising capital and providing general and administrative

support for these operations.

We have not yet demonstrated our ability to successfully complete any clinical study or other pivotal clinical

trials, obtain regulatory approvals, manufacture a commercial-scale product, or arrange for a third-party to do so on our behalf, or conduct

sales and marketing activities necessary for successful product commercialization.

Consequently, any predictions made about our future

success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as an early-stage company, we may

encounter unforeseen expenses, difficulties, complications, delays and other known and unknown circumstances.

As we advance our product

candidates, we will need to transition from a company with a research focus to a company capable of supporting clinical development and,

if successful, commercial activities.

diversion of management or

other resources from key aspects of our operations.

we succeed in marketing products, product liability claims could result in an FDA or equivalent foreign regulatory agency investigation

of the safety or efficacy of our products, our manufacturing processes and facilities or our marketing programs.

Such investigation could

also potentially lead to a recall of our products or more serious enforcement actions, or limitations on the indications, for which they

may be used, or suspension or withdrawal of approval.

currently only have limited clinical trials insurance policies that cover clinical trials in certain territories.

We intend to expand

our insurance coverage to include the sale of commercial products if marketing approval is obtained for our product candidates or any

other compound that we may develop.

However, insurance coverage is expensive, and we may not be able to maintain insurance coverage at

a reasonable cost or at all, and the insurance coverage that we have or obtain may not be adequate to cover potential claims or losses.

employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities,

including noncompliance with regulatory standards and requirements.

are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial

partners and vendors.

Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to comply with

the laws of the FDA and other similar foreign regulatory bodies, provide true, complete and accurate information to the FDA and other

similar foreign regulatory bodies, comply with manufacturing standards we have established, comply with healthcare fraud and abuse laws

in the United States and similar foreign fraudulent misconduct laws or report financial information or data accurately or to disclose

unauthorized activities to us.

If we obtain FDA approval of any of our product candidates and begin commercializing those products in

the United States, our potential exposure under such laws will increase significantly, and our costs associated with compliance with

such laws are also likely to increase.

These laws may impact, among other things, our current activities with principal investigators

and research patients, as well as proposed and future sales, marketing and education programs.

limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.

inception in 2015, BiomX Ltd.

has devoted substantially all of its resources to developing product candidates with phage technology through

its preclinical programs, building its intellectual property portfolio, developing a supply chain, planning its business, raising capital

and providing general and administrative support for these operations.

We have not yet demonstrated our ability to successfully complete

any clinical study or other pivotal clinical trials, obtain regulatory approvals, manufacture a commercial-scale product, or arrange

for a third-party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.

Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating

addition, as an early-stage company, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown

circumstances.

As we advance our product candidates, we will need to transition from a company with a research focus to a company capable

of supporting clinical development and, if successful, commercial activities.

We may not be successful in such a transition.

We may need to grow the size of our organization and may experience

difficulties in managing this growth.

As our research, development, manufacturing and

commercialization plans and strategies develop as a public company, we may need additional managerial, operational, sales, marketing,

financial and other personnel.

Future growth would impose significant added responsibilities on members of management, including:

may need to grow the size of our organization and may experience difficulties in managing this growth.

our research, development, manufacturing and commercialization plans and strategies, we may need additional managerial, operational,

sales, marketing, financial and other personnel.

Future growth would impose significant added responsibilities on members of management,

identifying, recruiting, compensating,

3 unchanged sentences

the clinical and FDA review process for our product candidates;

● improving our operational, financial

and management controls, reporting systems and procedures.

Our future financial performance and our ability

to commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth, and our management

may also have to divert a disproportionate amount of our attention away from day-to-day activities in order to devote a substantial amount

of time to managing these growth activities.

If we are not able to effectively expand our organization

by hiring additional employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the

tasks necessary to further develop and commercialize our product candidates and, accordingly, may not achieve our research, development

and commercialization goals.

We are an “emerging growth company,” and we cannot

be certain that the reduced disclosure requirements applicable to “emerging growth companies” will not make our Common Stock

less attractive to investors.

We are an “emerging growth company,”

as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

For so long as we remain an emerging growth company, we

intend to take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not

emerging growth companies, including, but not limited to, compliance with the auditor attestation requirements of Section 404(b) of the

Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic

reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and

stockholder approval of any golden parachute payments not previously approved.

Further, under the JOBS Act, emerging growth companies

can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards

apply to private companies.

We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards

and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth

We will remain an emerging growth company until the

earliest of (a) the last day of our fiscal year during which we have generated total annual gross revenue of at least $1.235 billion;

(b) the last day of our fiscal year following the fifth anniversary of the completion of our IPO;

more than $1.0 billion in nonconvertible debt securities during the prior three-year period;

or (d) the date on which we are deemed to

be a “large accelerated filer” under the Exchange Act.

We shall cease to be an emerging growth company commencing on

January 1, 2024.

Risks Related to Government Regulation

Breakthrough Therapy Designation or Fast Track Designation by the

FDA, even if granted for any of our product candidates developed for therapeutic indications, may not lead to a faster development, regulatory

review or approval process, and it does not increase the likelihood that any of our product candidates will receive marketing approval

in the United States.

In the United States, we may seek a Breakthrough Therapy Designation for

some of our product candidates, including BX004 or another product candidate under development.

A breakthrough therapy is defined as a

therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease or

condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies

on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

For therapies

that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help

to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens.

Breakthrough designation also provides sponsors with the potential for rolling review of a BLA.

Designation as a breakthrough therapy

is within the discretion of the FDA.

In the European Union, the PRIME (PRIority MEdicines)

status is similar to the Breakthrough Therapy Designation.

The EMA has implemented the PRIME status to support the development and accelerate

the approval of complex, innovative medicinal products addressing an unmet medical need.

The PRIME status enables early dialogue with

the relevant EMA scientific committees and, possibly, some payors and thus reinforces the EMA’s scientific and regulatory support.

The PRIME status, which is granted at the EMA’s discretion, focuses on medicinal products the marketing authorization of which qualifies

for accelerated assessment (medicinal products of major interest from a public health perspective, in particular from a therapeutic innovation

perspective).

Accordingly, even if we believe one of our product

candidates meets the criteria for designation as a breakthrough therapy or for PRIME status, the FDA or EMA, respectively, may disagree

and instead determine not to make such designation.

In any event, the receipt of a Breakthrough Therapy Designation or PRIME status for

a product candidate may not actually result in a faster development process, review or approval compared to therapies considered for approval

under conventional procedures and does not assure ultimate approval.

In addition, even if one or more of our product candidates qualify

as breakthrough therapies or is granted PRIME status, the FDA or EMA, respectively, may later decide that such product candidates no longer

meet the conditions for qualification or decide that the time period for review or approval will not be shortened.

In the United States, we may seek Fast Track Designation

for some of our product candidates for therapeutic indications.

If a therapy is intended for the treatment of a serious or life-threatening

condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply

for Fast Track Designation.

The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular

product candidate is eligible for this designation;

we cannot assure you that the FDA would decide to grant it.

Even if we receive Fast

Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

FDA may withdraw Fast Track Designation if we believe that the designation is no longer supported by data from our clinical development

improving our operational,

financial and management controls, reporting systems and procedures.

future financial performance and our ability to commercialize our product candidates will depend, in part, on our ability to effectively

manage any future growth, and our management may also have to divert a disproportionate amount of our attention away from day-to-day

activities in order to devote a substantial amount of time to managing these growth activities.

we are not able to effectively expand our organization by hiring additional employees and expanding our groups of consultants and contractors,

we may not be able to successfully implement the tasks necessary to further develop and commercialize our product candidates and, accordingly,

may not achieve our research, development and commercialization goals.

Related to Government Regulation

product candidates are subject to significant regulatory approval requirements, which could delay, prevent or limit our ability to market

or develop our product candidates.

research and development activities, preclinical studies, clinical trials and the anticipated manufacturing and marketing of our drug

product candidates are subject to extensive regulation by the FDA and other regulatory agencies in the United States and by comparable

authorities in Europe and elsewhere.

To satisfy FDA or equivalent foreign regulatory approval standards, we must demonstrate in adequate

and well controlled clinical trials that our drug product candidates are safe and effective for their intended use.

The regulatory approval

process is expensive and time-consuming, and the timing of receipt of regulatory approval is difficult to predict.

Given the uncertainties

around phage therapy, our product candidates could require a significantly longer time to gain regulatory approval than expected or may

never gain approval.

We cannot be certain that, even after expending substantial time and financial resources, we will obtain regulatory

approval for any of our product candidates.

A delay or denial of regulatory approval could delay or prevent our ability to generate product

revenue and to achieve profitability.

requirements for development of our product candidates are uncertain and evolving.

Changes in these laws or the current interpretation

or application of these laws would have a significant adverse impact on our ability to develop and commercialize our product candidates.

The legal and regulatory status of phage therapy remains unclear in many countries, including the European Union.

Changes in regulatory

approval policies during the development period of any of our product candidates, changes in, or the enactment of, additional regulations

or statutes, or changes in regulatory review practices for a submitted product application may cause a delay in obtaining approval or

result in the rejection of an application for regulatory approval.

approval, if obtained, may be made subject to limitations on the indicated uses for which we may market a product, as well as the approved

labeling for the product.

These limitations could adversely affect our potential product revenue.

Regulatory approval may also be conditioned

on costly post-marketing follow-up studies.

In addition, the labeling, packaging, adverse event reporting, storage, advertising, promotion

and recordkeeping related to the product will be subject to extensive ongoing regulatory requirements.

Furthermore, for any marketed

product, our manufacturer and our manufacturing facilities will be subject to registration and listing requirements and continual review

and periodic inspections by the FDA or other regulatory authorities.

Failure to comply with applicable regulatory requirements may, among

other things, result in fines, suspensions of regulatory approvals, product recalls, product seizures, operating restrictions and criminal

Therapy Designation or Fast Track Designation by the FDA, even if granted for any of our product candidates developed for therapeutic

indications, may not lead to a faster development, regulatory review or approval process, and it does not increase the likelihood that

any of our product candidates will receive marketing approval in the United States.

the United States, we may seek a Breakthrough Therapy Designation for some of our product candidates, including BX004 or another product

candidate under development.

A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more

other therapies, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy

may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial

treatment effects observed early in clinical development.

For therapies that have been designated as breakthrough therapies, interaction

and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development

while minimizing the number of patients placed in ineffective control regimens.

Breakthrough designation also provides sponsors with

the potential for rolling review of a BLA.

Designation as a breakthrough therapy is within the discretion of the FDA.

the European Union, the PRIME (PRIority MEdicines) status is similar to the Breakthrough Therapy Designation.

The EMA has implemented

the PRIME status to support the development and accelerate the approval of complex, innovative medicinal products addressing an unmet

medical need.

The PRIME status enables early dialogue with the relevant EMA scientific committees and, possibly, some payors and thus

reinforces the EMA’s scientific and regulatory support.

The PRIME status, which is granted at the EMA’s discretion, focuses

on medicinal products the marketing authorization of which qualifies for accelerated assessment (medicinal products of major interest

from a public health perspective, in particular from a therapeutic innovation perspective).

even if we believe one of our product candidates meets the criteria for designation as a breakthrough therapy or for PRIME status, the

FDA or EMA, respectively, may disagree and instead determine not to make such designation.

In any event, the receipt of a Breakthrough

Therapy Designation or PRIME status for a product candidate may not actually result in a faster development process, review or approval

compared to therapies considered for approval under conventional procedures and does not assure ultimate approval.

In addition, even

if one or more of our product candidates qualify as breakthrough therapies or is granted PRIME status, the FDA or EMA, respectively,

may later decide that such product candidates no longer meet the conditions for qualification or decide that the time period for review

or approval will not be shortened.

the United States, we may seek Fast Track Designation for some of our product candidates for therapeutic indications.

If a therapy is

intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical

needs for this condition, the therapy sponsor may apply for Fast Track Designation.

The FDA has broad discretion whether or not to grant

this designation, so even if we believe a particular product candidate is eligible for this designation;

we cannot assure you that the

FDA would decide to grant it.

In August 2023, we obtained Fast Track Designation for BX004 in the United States.

Although we received

Fast Track Designation, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

The FDA may withdraw Fast Track Designation if they believe that the designation is no longer supported by data from our clinical development

Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

Other countries may have adopted schemes designed

to ensure an accelerated approval of drugs that are especially important for patients.

For example, in the European Union, the EMA may

agree to an accelerated assessment (150 days instead of 210 days) for medicinal products of major interest from a public health perspective,

in particular from a therapeutic innovation perspective).

Furthermore, competent regulatory authorities may grant market authorizations

“under exceptional circumstances,” in cases where all the required safety and efficacy data have not been and will not be

collected, to medicinal products designed for unmet needs or orphan medicinal products.

Although a marketing authorization under exceptional

circumstances is definitive, the risk-benefit balance of the medicinal product must be reviewed annually and the marketing authorization

is withdrawn if it becomes negative.

Moreover, under the centralized procedure, the European Commission may grant “conditional marketing

authorizations” in cases where all the required safety and efficacy data are not yet available.

The conditional marketing authorization

is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures.

It is valid for one year

and has to be renewed annually until fulfillment of all the conditions.

If the conditions are not fulfilled within the timeframe set by

the EMA, the marketing authorization ceases to be renewed.

As with Fast Track Designation, the competent regulatory authorities in the

European Union have broad discretion whether or not to grant such an accelerated assessment or approval and, even if such assessment or

approval is granted, we may not experience a faster development process, review or approval compared to conventional procedures.

We may fail to obtain and maintain orphan drug designations from

the FDA or equivalent foreign regulatory agencies for our current and future therapeutic product candidates, as applicable.

In the United States, under the Orphan Drug Act,

the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as one

occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United

States where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United

countries may have adopted schemes designed to ensure an accelerated approval of drugs that are especially important for patients.

example, in the European Union, the EMA may agree to an accelerated assessment (150 days instead of 210 days) for medicinal products

of major interest from a public health perspective, in particular from a therapeutic innovation perspective).

Furthermore, competent

regulatory authorities may grant market authorizations “under exceptional circumstances,” in cases where all the required

safety and efficacy data have not been and will not be collected, to medicinal products designed for unmet needs or orphan medicinal

Although a marketing authorization under exceptional circumstances is definitive, the risk-benefit balance of the medicinal

product must be reviewed annually and the marketing authorization is withdrawn if it becomes negative.

Moreover, under the centralized

procedure, the European Commission may grant “conditional marketing authorizations” in cases where all the required safety

and efficacy data are not yet available.

The conditional marketing authorization is subject to conditions to be fulfilled for generating

the missing data or ensuring increased safety measures.

It is valid for one year and has to be renewed annually until fulfillment of

all the conditions.

If the conditions are not fulfilled within the timeframe set by the EMA, the marketing authorization ceases to be

As with Fast Track Designation, the competent regulatory authorities in the European Union have broad discretion whether or

not to grant such an accelerated assessment or approval and, even if such assessment or approval is granted, we may not experience a

faster development process, review or approval compared to conventional procedures.

may fail to obtain and maintain orphan drug designations from the FDA or equivalent foreign regulatory agencies for our current and future

therapeutic product candidates, as applicable.

the United States, under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare

disease or condition, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient

population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug or

biologic will be recovered from sales in the United States.

In December 2023, we obtained orphan drug designation for BX004 in the United

In the United States, the orphan drug designation entitles a party to financial incentives, such as opportunities for grant funding

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or where the original manufacturer is unable to assure sufficient product quantity.

In addition, exclusive marketing rights in the

United States may be limited if we seek approval for an indication broader than the orphan-designated indication or may be lost if the

FDA later determines that the request for designation was materially defective, or if we are unable to assure sufficient quantities of

the product to meet the needs of patients with the orphan-designated disease or condition.

Further, even if we obtain orphan drug exclusivity

for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active

moieties may receive and be approved for the same condition, and only the first applicant to receive approval will receive the benefits

of marketing exclusivity.

Even after an orphan-designated product is approved, the FDA can subsequently approve a later drug with the

same active moiety for the same condition if the FDA concludes that the later drug is clinically superior if it is shown to be safer,

more effective or makes a major contribution to patient care.

Orphan drug designation neither shortens the development time or regulatory

review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

In addition, while we may seek the

orphan drug designation for our product candidates, we may never receive such designation.

An orphan drug legal regime also exists in the

European Union.

The EMA’s Committee for Orphan Medicinal Products, or COMP, gives opinions, and the European Commission takes decisions,

on the granting of the orphan drug designation to the development of products that are intended for the diagnosis, prevention or treatment

of (i) a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Economic

Area (European Union plus Iceland, Liechtenstein and Norway);

or (ii) a life-threatening, seriously debilitating or serious and chronic

condition when, without incentives, it is unlikely that sales of the drug in the European Economic Area would be sufficient to justify

the necessary investment in developing the drug or biological product.

The granting of the orphan designation requires that there is no

satisfactory method of diagnosis, prevention or treatment, or, if such a method exists, that the future medicine is to be of significant

benefit to those affected by the condition.

The test for that later condition is stringent, because the future product must be compared

with all existing therapies for the rare condition, including surgical operations, already authorized medicinal products and compounded

preparations (subject to certain conditions).

At the time of marketing authorization, the orphan designation is reviewed again by the

COMP in view of the maintenance of the orphan status.

If the designation criteria are no longer met, the European Commission withdraws

the orphan designation.

Maintenance of the orphan designation at the time of marketing authorization means that all the drugs/biologicals

authorized since the granting of the designation become relevant for determining the lack of satisfactory therapy or the significant benefit.

If obtained, the orphan drug designation would

entitle us to financial incentives, such as reductions of fees or fee waivers and 10 years of market exclusivity.

Market exclusivity precludes

the EMA or the national competent authorities from validating a marketing authorization application, and the European Commission or a

national competent authority from granting a marketing authorization, for a same or similar drug/biological and the same therapeutic indication.

The 10-year period may be reduced to six years if the orphan designation criteria are no longer met, including where it is shown that

the product is not sufficiently profitable to justify maintenance of market exclusivity.

The orphan exclusivity may also be lost vis-à-vis

another drug/biological in cases where the manufacturer is unable to assure sufficient quantity of the drug to meet patient needs or if

that other product is proved to be clinically superior to the approved orphan product.

A drug/biological is clinically superior if it

is safer, more effective or makes a major contribution to patient care.

Even if we receive regulatory approval of any product candidates

for therapeutic indications, we will be subject to ongoing regulatory compliance obligations and continued regulatory review, which may

result in significant additional expense.

Additionally, any of our product candidates, if approved, could be subject to labeling and other

restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience

unanticipated problems with our product candidates.

If any of our product candidates is approved for

therapeutic indications, we will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution,

advertising, promotion, sampling, recordkeeping, export, import, conduct of post-marketing studies and submission of safety, efficacy

and other post-market information, including both federal and state requirements in the United States and requirements of equivalent foreign

regulatory agencies.

In addition, we will be subject to continued compliance with cGMP and GCP requirements for any clinical trials that

we conduct post-approval.

Manufacturers and manufacturers’ facilities

are required to comply with extensive FDA and equivalent foreign regulatory agency requirements, including ensuring that quality control

and manufacturing procedures conform to cGMP regulations.

As such, we and our contract manufacturers will be subject to continual review

and inspections to assess compliance with cGMP and adherence to commitments made in any NDA, other marketing applications and previous

responses to inspection observations.

Accordingly, we and others with whom we work must continue to expend time, money, and effort in

all areas of regulatory compliance, including manufacturing, production and quality control.

The FDA or equivalent foreign regulatory agencies

have significant post-marketing authority, including, for example, the authority to require labeling changes based on new safety information

and to require post-marketing studies or clinical trials to evaluate serious safety risks related to the use of a drug.

Any regulatory

approvals that we receive for our product candidates may be subject to limitations on the approved indicated uses for which the product

may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase

4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate.

The FDA or equivalent foreign regulatory

agencies may also require a REMS program as a condition of approval of our product candidates, which could entail requirements for long-term

patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution

methods, patient registries and other risk minimization tools.

In addition, if the FDA or an equivalent foreign regulatory agency approves

our product candidates, we will have to comply with requirements, including submissions of safety and other post-marketing information

and reports and registration.

The FDA or equivalent foreign regulatory agencies

may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems

occur after the product reaches the market.

Later discovery of previously unknown problems with our product candidates, including adverse

events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply

with regulatory requirements may result in revisions to the approved labeling to add new safety information, the imposition of post-market

studies or clinical trials to assess new safety risks, or the imposition of distribution restrictions or other restrictions under a REMS

addition, exclusive marketing rights in the United States may be limited if we seek approval for an indication broader than the orphan-designated

indication or may be lost if the FDA later determines that the request for designation was materially defective, or if we are unable

to assure sufficient quantities of the product to meet the needs of patients with the orphan-designated disease or condition.

even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because

different drugs with different active moieties may receive and be approved for the same condition.

Even after an orphan-designated product

is approved, the FDA can subsequently approve a later drug with the same active moiety for the same condition if the FDA concludes that

the later drug is clinically superior if it is shown to be safer, more effective or makes a major contribution to patient care.

drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory

review or approval process.

In addition, while we may seek the orphan drug designation for our product candidates, we may never receive

such designation.

orphan drug legal regime also exists in the European Union.

The EMA’s Committee for Orphan Medicinal Products, or COMP, gives opinions,

and the European Commission takes decisions, on the granting of the orphan drug designation to the development of products that are intended

for the diagnosis, prevention or treatment of (i) a life-threatening or chronically debilitating condition affecting not more than five

in 10,000 persons in the European Economic Area (comprising the European Union, Iceland, Liechtenstein and Norway);

or (ii) a life-threatening,

seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European

Economic Area would be sufficient to justify the necessary investment in developing the drug or biological product.

The granting of the

orphan designation requires that there is no satisfactory method of diagnosis, prevention or treatment, or, if such a method exists,

that the future medicine is to be of significant benefit to those affected by the condition.

The test for that later condition is stringent,

because the future product must be compared with all existing therapies for the rare condition, including surgical operations, already

authorized medicinal products and compounded preparations (subject to certain conditions).

At the time of marketing authorization, the

orphan designation is reviewed again by the COMP in view of the maintenance of the orphan status.

If the designation criteria are no

longer met, the European Commission withdraws the orphan designation.

Maintenance of the orphan designation at the time of marketing

authorization means that all the drugs/biologicals authorized since the granting of the designation become relevant for determining the

lack of satisfactory therapy or the significant benefit.

obtained, the orphan drug designation would entitle us to financial incentives, such as reductions of fees or fee waivers and 10 years

of market exclusivity.

Market exclusivity precludes the EMA or the national competent authorities from validating a marketing authorization

application, and the European Commission or a national competent authority from granting a marketing authorization, for a same or similar

drug/biological and the same therapeutic indication.

The 10-year period may be reduced to six years if the orphan designation criteria

are no longer met, including where it is shown that the product is not sufficiently profitable to justify maintenance of market exclusivity.

The orphan exclusivity may also be lost vis-à-vis another drug/biological in cases where the manufacturer is unable to assure

sufficient quantity of the drug to meet patient needs or if that other product is proved to be clinically superior to the approved orphan

A drug/biological is clinically superior if it is safer, more effective or makes a major contribution to patient care.

to comply with health and data protection laws and regulations could lead to claims, government enforcement actions (which could include

civil or criminal penalties), regulatory actions, private litigation and/or adverse publicity and could negatively affect our operating

results and business.

may be subject to federal, state and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and

In the United States, numerous federal and state laws and regulations, including federal health information privacy laws,

state consumer privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer

protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of

health-related and other personal information could apply to our operations or the operations of our collaborators.

In addition, we may

obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject

to privacy and security requirements under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health of

Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use or disclose individually

identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

requirements may also be imposed by international data protection laws.

In this context, Regulation 2016/679 of the GDPR (in addition

to many other international data protection laws) may have an impact on our operations when we collect and/or process personal data of

individuals located in the European Union.

The GDPR has applied since May 25, 2018 (replacing previously applicable data protection frameworks)

and has an extraterritorial reach.

The GDPR allows members states to introduce specific requirements in relation to certain areas, including

processing of special categories of data, and we may face further restrictions and non-compliance risks under such national frameworks.

We have not yet assessed whether its activities might be caught by the GDPR.

of the types of data we collect and process, which may involve health, biometric and genetic data, we may face high risks for non-compliance

with the GDPR rules (or local declinations of GDPR-rules across the different European Union Member States), as these types of data are

considered as special categories of data and are granted higher protection.

The risks are further increased considering the diverging

approach in the European Union as to the rules, requirements and frameworks in relation to the processing of personal data in clinical

trials (in matters such as the choice of the legal basis for the processing of data, the possible uses of the personal data collected,

etc.) and the interplay with other relevant frameworks.

The GDPR introduced stringent data protection requirements in the European Union,

as well as potential fines for noncompliant companies of up to the greater of €20 million or 4% of annual worldwide turnover.

authorities also have the ability to restrict our processing activities if those are deemed not to be in compliance with the GDPR (or

local declinations);

this may significantly impact the way we conduct our activities.

The GDPR imposes numerous requirements for the

collection, use and disclosure of personal data, including high standards for consent to be valid, and specific information to be provided

to individuals about how their personal data is used, the obligation to notify regulators and (in some cases) to communicate to affected

individuals of personal data breaches, extensive new internal privacy governance requirements and obligations to allow individuals to

exercise their strengthened privacy rights (e.g., the right to access, correct and delete their personal data, to withdraw their consent,

etc.), and obligations when contracting with third parties such as service providers, CROs, etc.

In addition, the GDPR includes restrictions

on data transfers outside the EEA.

The actual mechanisms made available under GDPR to transfer such personal data have received heightened

regulatory and judicial scrutiny.

If we cannot rely on existing mechanisms for transferring personal data from the EEA, the United Kingdom,

or other jurisdictions, we may be unable to transfer personal data in those regions.

Further, the United Kingdom’s vote in favor

of exiting the European Union, often referred to as “Brexit,” has created uncertainty as to whether or not the United Kingdom

data protection legislation will depart from the GDPR and how data transfers to and from the United Kingdom will be regulated.

and international data protection laws and regulations could require us to take on more onerous obligations in our contracts,

restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.

laws and regulations could limit our ability to use and share personal or other data, thereby increasing our costs and harming our business

and financial condition.

Failure to comply with U.S.

and international data protection laws and regulations could result in claims, government

enforcement actions (which could include civil or criminal penalties), regulatory actions, private litigation and/or adverse publicity

and could negatively affect our operating results and business.

Moreover, clinical trial subjects about whom we or our potential collaborators

obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose

the information.

Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached

our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse

publicity that could harm our business.

Finally, we may be required to disclose personal data pursuant to demands from government agencies,

from law enforcement agencies, and from intelligence agencies.

This disclosure may result in a failure or perceived failure by us to

comply with data privacy laws, rules, and regulations and could result in proceedings or actions against us in the same or other jurisdictions,

and could have an adverse impact on our reputation and brand.

relationships with healthcare providers, physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse

and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational

harm and diminished profits and future earnings.

providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription

of pharmaceutical products.

Arrangements with third-party payors and customers can expose pharmaceutical manufacturers to broadly applicable

fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the FCA,

and foreign equivalent legislation, which may constrain the business or financial arrangements and relationships through which such companies

sell, market and distribute pharmaceutical products.

In particular, the promotion, sales and marketing of healthcare items and services,

as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks,

self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing

and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally.

subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

The applicable federal, state and foreign healthcare laws and regulations laws that may affect our ability to operate include, but are

not limited to:

the federal Anti-Kickback Statute, which prohibits,

among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe

or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of

an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made,

in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.

A person or entity can be found

guilty of violating the statute without actual knowledge of the statute or specific intent to violate it.

In addition, a claim including

items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes

The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one

hand and prescribers, purchasers and formulary managers on the other hand.

There are a number of statutory exceptions and regulatory

safe harbors protecting some common activities from prosecution;

federal civil and criminal false claims laws, including

the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false

or fraudulent claims for payment to, or approval by Medicare, Medicaid or other federal healthcare programs, knowingly making, using

or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit

money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation

to pay money to the federal government.

Manufacturers can be held liable under the FCA even when they do not submit claims directly

to government payors if they are deemed to “cause” the submission of false or fraudulent claims.

The FCA also permits

a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations

of the FCA and to share in any monetary recovery;

HIPAA, which created new federal criminal statutes

that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or

obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under

the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully

falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection

with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Similar to the federal

Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific

intent to violate it;

the federal Physician Payment Sunshine Act, created

under the Patient Protection and Affordable Care Act and its implementing regulations, which require manufacturers of drugs, devices,

biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance

Program (with certain exceptions) to report annually to the United States Department of Health and Human Services information related

to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors),

certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants,

certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment

interests held by physicians and their immediate family members;

federal consumer protection and unfair competition

laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

analogous state and foreign laws and regulations, such

as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare

items or services reimbursed by nongovernmental third-party payors, including private insurers, and may be broader in scope than

their federal equivalents;

state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s

voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict

payments that may be made to healthcare providers;

and state and foreign laws that require drug manufacturers to report information

related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

European Union and other foreign provisions.

distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive recordkeeping, licensing,

storage, security requirements intended to prevent the unauthorized sale of pharmaceutical products and, in some foreign countries, including

the European Union countries, mandatory anti-counterfeit features.

scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform,

especially in light of the lack of applicable precedent and regulations.

Federal and state enforcement bodies have recently increased

their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions,

convictions and settlements in the healthcare industry.

Ensuring business arrangements comply with applicable healthcare laws, as well

as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s

attention from the business.

is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent inappropriate conduct

may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other

actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.

Efforts to ensure that our business arrangements

will comply with applicable healthcare laws may involve substantial costs.

It is possible that governmental and enforcement authorities

will conclude that our business practices may not comply with current or future statutes, regulations or case law interpreting applicable

fraud and abuse or other healthcare laws and regulations.

The failure to comply with any of these laws or regulatory requirements could

subject us to possible legal or regulatory action.

Depending on the circumstances, failure to meet applicable regulatory requirements

can result in civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion

from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations,

as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement

to resolve allegations of noncompliance with these laws.

Any action for violation of these laws, even if successfully defended, could

cause a pharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of

the business.

Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an

addition, the approval and commercialization of any of our product candidates outside the United States will also likely subject us to

foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

FDA and other equivalent foreign regulatory agencies may implement additional regulations or restrictions on the development and commercialization

of products which act on the microbiome, which may be difficult to predict.

FDA and equivalent foreign regulatory agencies in other countries have each expressed interest in further regulating biotechnology products

and product candidates, such as those that act on the human microbiome.

Agencies at both the federal and state level in the United States,

as well as the U.S.

congressional committees and other governments or governing agencies, have also expressed interest in further regulating

the biotechnology industry.

Such action may delay or prevent commercialization of some or all of our product candidates.

Adverse developments

in non-IND human clinical studies or clinical trials of microbiome products conducted by others may cause the FDA or other oversight

bodies to change the requirements for approval of any of our product candidates.

These regulatory review agencies and committees and

the new requirements or guidelines they promulgate may lengthen the regulatory review process, require us to perform additional studies

or trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and

commercialization of our product candidates or lead to significant post-approval limitations or restrictions.

As we advance our product

candidates, we will be required to consult with these regulatory agencies and comply with applicable requirements and guidelines.

we fail to do so, we may be required to delay or discontinue development of such product candidates.

These additional processes may result

in a review and approval process that is longer than we otherwise would have expected.

Delays as a result of an increased or lengthier

regulatory approval process or further restrictions on the development of our product candidates can be costly and could negatively impact

our ability to complete clinical trials and commercialize our current and future product candidates in a timely manner if at all.

if we receive regulatory approval of any product candidates for therapeutic indications, we will be subject to ongoing regulatory compliance

obligations and continued regulatory review, which may result in significant additional expense.

Additionally, any of our product candidates,

if approved, could be subject to labeling and other restrictions and market withdrawal, and we may be subject to penalties if we fail

to comply with regulatory requirements or experience unanticipated problems with our product candidates.

any of our product candidates is approved for therapeutic indications, we will be subject to ongoing regulatory requirements for manufacturing,

labeling, packaging, storage, distribution, advertising, promotion, sampling, recordkeeping, export, import, conduct of post-marketing

studies and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United

States and requirements of equivalent foreign regulatory agencies.

In addition, we will be subject to continued compliance with cGMP

and GCP requirements for any clinical trials that we conduct post-approval.

Manufacturers

and manufacturers’ facilities are required to comply with extensive FDA and equivalent foreign regulatory agency requirements,

including ensuring that quality control and manufacturing procedures conform to cGMP regulations.

As such, we and our contract manufacturers

will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA, other

marketing applications and previous responses to inspection observations.

Accordingly, we and others with whom we work must continue

to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

FDA or equivalent foreign regulatory agencies have significant post-marketing authority, including, for example, the authority to require

labeling changes based on new safety information and to require post-marketing studies or clinical trials to evaluate serious safety

risks related to the use of a drug.

Any regulatory approvals that we receive for our product candidates may be subject to limitations

on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially

costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate.

The FDA or equivalent foreign regulatory agencies may also require a REMS program as a condition of approval of our product candidates,

which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements

to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

In addition, if the

FDA or an equivalent foreign regulatory agency approves our product candidates, we will have to comply with requirements, including submissions

of safety and other post-marketing information and reports and registration.

FDA or equivalent foreign regulatory agencies may impose consent decrees or withdraw approval if compliance with regulatory requirements

and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems

with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or

manufacturing processes, or failure to comply with regulatory requirements may result in revisions to the approved labeling to add new

safety information, the imposition of post-market studies or clinical trials to assess new safety risks, or the imposition of distribution

restrictions or other restrictions under a REMS program.

Other potential consequences include, among other things:

● restrictions on the marketing

or manufacturing of our products, withdrawal of products from the market, or voluntary or mandatory product recalls;

● fines, warning or untitled enforcement

letters, or holds on clinical trials;

● refusal by the FDA or equivalent

foreign regulatory agencies to approve pending applications or supplements to approved applications filed by us or the suspension or

revocation of license approvals;

● product seizure or detention

or refusal to permit the import or export of our product candidates;

● injunctions or the imposition

of civil or criminal penalties.

The FDA or equivalent foreign regulatory agencies

strictly regulate the marketing, labeling, advertising and promotion of drug products that are placed on the market.

Products may be promoted

only for the approved indications and in accordance with the provisions of the approved label or other regulatory marketing pathway.

FDA and equivalent foreign regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses,

and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

The policies of the FDA

or equivalent foreign regulatory agencies may change, and additional government regulations may be enacted that could prevent, limit or

delay regulatory approval of our product candidates.

If we are slow or unable to adapt to changes in existing requirements or the adoption

of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may

have obtained, which would adversely affect our business, prospects and the ability to achieve or sustain profitability.

The policies of the FDA or equivalent foreign regulatory

agencies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our

product candidates.

We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation

or administrative or executive action, either in the United States or abroad.

If we are slow or unable to adapt to changes in existing

requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject

to enforcement action, and we may not achieve or sustain profitability.

Noncompliance by us or any future collaborator

with regulatory requirements, including safety monitoring or pharmacovigilance requirements, can also result in significant financial

We may conduct clinical trials for our product candidates outside

the United States, and the FDA may not accept data from such trials.

We have and may continue to conduct certain clinical

trials or a portion of our clinical trials for our product candidates outside the U.S.

The acceptance of study data from clinical trials

conducted outside the U.S.

or another jurisdiction by the FDA or comparable foreign regulatory authority may be subject to certain conditions

or may not be accepted at all.

In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing

approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable

restrictions on the marketing or manufacturing of our

products, withdrawal of products from the market, or voluntary or mandatory product recalls;

fines, warning or untitled enforcement letters, or

holds on clinical trials;

refusal by the FDA or equivalent foreign regulatory

agencies to approve pending applications or supplements to approved applications filed by us or the suspension or revocation of license

product seizure or detention or refusal to permit the

import or export of our product candidates;

injunctions or the imposition of civil or criminal

FDA or equivalent foreign regulatory agencies strictly regulate the marketing, labeling, advertising and promotion of drug products that

are placed on the market.

Products may be promoted only for the approved indications and in accordance with the provisions of the approved

label or other regulatory marketing pathway.

The FDA and equivalent foreign regulatory agencies actively enforce the laws and regulations

prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to

significant liability.

The policies of the FDA or equivalent foreign regulatory agencies may change, and additional government regulations

may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

If we are slow or unable to adapt to

changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance,

we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and the ability to

achieve or sustain profitability.

policies of the FDA or equivalent foreign regulatory agencies may change, and additional government regulations may be enacted that could

prevent, limit or delay regulatory approval of our product candidates.

We also cannot predict the likelihood, nature or extent of government

regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able

to maintain regulatory compliance, we may be subject to enforcement action, and we may not achieve or sustain profitability.

Noncompliance

by us or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance requirements, can also

result in significant financial penalties.

may conduct clinical trials for our product candidates outside the United States, and the FDA may not accept data from such trials.

have and may continue to conduct certain clinical trials or a portion of our clinical trials for our product candidates outside the U.S.

The acceptance of study data from clinical trials conducted outside the U.S.

or another jurisdiction by the FDA or comparable foreign

regulatory authority may be subject to certain conditions or may not be accepted at all.

In cases where data from foreign clinical trials

are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the

basis of foreign data alone unless (i) the data are applicable to the U.S.

population and U.S.

medical practice;

(ii) the trials were performed by clinical investigators of recognized competence and

pursuant to GCP regulations;

and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the

FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate

In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept

the data as support for an application for marketing approval unless the study is well-designed and well-conducted in accordance with

GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary.

regulatory authorities have similar approval requirements.

In addition, such foreign trials would be subject to the applicable local laws

of the foreign jurisdictions where the trials are conducted.

There can be no assurance that the FDA or any comparable foreign regulatory

authority will accept data from trials conducted outside of the U.S.

(ii) the trials were

performed by clinical investigators of recognized competence and pursuant to GCP regulations;

and (iii) the data may be considered valid

without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate

the data through an on-site inspection or other appropriate means.

In addition, even where the foreign study data are not intended to

serve as the sole basis for approval, the FDA will not accept the data as support for an application for marketing approval unless the

study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study

through an onsite inspection if deemed necessary.

Many foreign regulatory authorities have similar approval requirements.

such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.

can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the

or the applicable jurisdiction.

If the FDA or any comparable foreign

regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming,

and which may result in current or future product candidates that we may develop not receiving approval for commercialization in the applicable

jurisdiction.

Any products that we may develop may become subject to unfavorable

pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which could make it difficult for us to sell

any product candidates or therapies profitably.

The regulations that govern pricing for new medical

products vary widely from country to country.

As a result, we might obtain regulatory approval for a product in a particular country but

then be subject to pricing regulations in that country that delay the commercial launch of the product and negatively impact the revenue

we are able to generate from the sale of the product in that country.

In addition, our ability to commercialize any approved products

successfully will depend in part on the extent to which reimbursement for these products will be available from government health administration

authorities, private health insurers and other organizations.

Even if we succeed in bringing one or more therapeutic products to market,

these products may not be considered cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell

them on a competitive basis.

If the price we are able to charge for therapeutic products is inadequate in light of our development and

other costs, our future profitability could be adversely affected.

Ongoing health care legislative and regulatory reform measures

may have a material adverse effect on our business and results of operations.

Changes in regulations, statutes or the interpretation

of existing regulations could impact our business in the future by requiring, for example, (i) changes to our manufacturing arrangements,

(ii) additions or modifications to product labeling, (iii) the recall or discontinuation of our products, or (iv) additional record-keeping

requirements.

If any such changes were to be imposed, they could adversely affect the operation of our business.

In the United States, there have been and continue

to be a number of legislative initiatives to contain health care costs.

For example, in March 2010, the ACA was passed, which substantially

changed the way health care is financed by both governmental and private insurers and significantly impacted the United States pharmaceutical

The ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars;

addressed a new

methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused,

instilled, implanted or injected;

increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program;

and extended the rebate program to individuals enrolled in Medicaid managed care organizations.

It also established annual fees and taxes

on manufacturers of certain branded prescription drugs and creates a new Medicare Part D coverage gap discount program in which manufacturers

must now agree to offer 50% point of sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their

coverage gap period as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Since its enactment, there have been judicial,

executive and Congressional challenges to certain aspects of the ACA.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent

judicial challenge to the ACA without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court’s decision,

President Biden issued an executive order initiating a special enrollment period from February 15, 2021 through August 15, 2021 for purposes

of obtaining health insurance coverage through the ACA marketplace.

The executive order also instructed certain governmental agencies

to review and reconsider their existing policies and rules that limit access to healthcare.

More recently, on March 11, 2021, President

Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at

100% of a drug’s average manufacturer price, beginning January 1, 2024.

It is unclear how other healthcare reform measures of the

Biden administration, if any, will impact our business.

These laws and future state and federal health

care reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other health care

funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or

the frequency with which any such product candidate is prescribed or used.

A similar movement is observed in the European

Union countries.

Criteria for pricing and reimbursement, which vary from country to country, are regularly amended and tightened in order

to reduce the draw on the budget allocated to national health insurance systems.

Moreover, the system of reference pricing (the price

in a country calculated on the basis of prices in other countries with typically lower prices) leads to price reductions in countries

that traditionally granted high prices.

Disruptions at the FDA and other government agencies caused by

funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or

otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, which could

negatively impact our business.

The ability of the FDA to review and or approve

new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy

changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise

affect the FDA’s ability to perform routine functions.

Average review times at the FDA have fluctuated in recent years as a result.

In addition, government funding of other government agencies that fund research and development activities is subject to the political

process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other regulatory authorities may also slow the time necessary

for new drugs and biologics to be reviewed and/or approved by necessary regulatory authorities, which would adversely affect our business.

If the FDA or any comparable foreign regulatory authority does not accept such data, it would result

in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates

that we may develop not receiving approval for commercialization in the applicable jurisdiction.

products that we may develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare

reform initiatives, which could make it difficult for us to sell any product candidates or therapies profitably.

regulations that govern pricing for new medical products vary widely from country to country.

As a result, we might obtain regulatory

approval for a product in a particular country but then be subject to pricing regulations in that country that delay the commercial launch

of the product and negatively impact the revenue we are able to generate from the sale of the product in that country.

In addition, our

ability to commercialize any approved products successfully will depend in part on the extent to which reimbursement for these products

will be available from government health administration authorities, private health insurers and other organizations.

Even if we succeed

in bringing one or more therapeutic products to market, these products may not be considered cost-effective, and the amount reimbursed

for any products may be insufficient to allow us to sell them on a competitive basis.

If the price we are able to charge for therapeutic

products is inadequate in light of our development and other costs, our future profitability could be adversely affected.

health care legislative and regulatory reform measures may have a material adverse effect on our business and results of operations.

in regulations, statutes or the interpretation of existing regulations could impact our business in the future by requiring, for example,

(i) changes to our manufacturing arrangements, (ii) additions or modifications to product labeling, (iii) the recall or discontinuation

of our products, or (iv) additional record-keeping requirements.

If any such changes were to be imposed, they could adversely affect

the operation of our business.

the United States, there have been and continue to be a number of legislative initiatives to contain health care costs.

in March 2010, the ACA was passed, which substantially changed the way health care is financed by both governmental and private insurers

and significantly impacted the United States pharmaceutical industry.

The ACA, among other things, subjected biological products to potential

competition by lower-cost biosimilars;

addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate

Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

increased the minimum Medicaid rebates

owed by manufacturers under the Medicaid Drug Rebate Program;

and extended the rebate program to individuals enrolled in Medicaid managed

care organizations.

It also established annual fees and taxes on manufacturers of certain branded prescription drugs and creates a new

Medicare Part D coverage gap discount program in which manufacturers must now agree to offer 50% point of sale discounts off negotiated

prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer’s

outpatient drugs to be covered under Medicare Part D.

its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.

On June 17, 2021, the

Supreme Court dismissed the most recent judicial challenge to the ACA without specifically ruling on the constitutionality of the

Prior to the Supreme Court’s decision, President Biden issued an executive order initiating a special enrollment period from

February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace.

The executive

order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare.

More recently, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory

Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, beginning January 1, 2024.

It is unclear

how other healthcare reform measures of the Biden administration, if any, will impact our business.

laws and future state and federal health care reform measures may be adopted in the future, any of which may result in additional reductions

in Medicare and other health care funding and otherwise affect the prices we may obtain for any of our product candidates for which we

may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

similar movement is observed in the European Union countries.

Criteria for pricing and reimbursement, which vary from country to country,

are regularly amended and tightened in order to reduce the draw on the budget allocated to national health insurance systems.

the system of reference pricing (the price in a country calculated on the basis of prices in other countries with typically lower prices)

leads to price reductions in countries that traditionally granted high prices.

at the FDA and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain

or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized

in a timely manner or at all, which could negatively impact our business.

ability of the FDA to review and or approve new products can be affected by a variety of factors, including government budget and funding

levels, statutory, regulatory, and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of

user fees, and other events that may otherwise affect the FDA’s ability to perform routine functions.

Average review times at the

FDA have fluctuated in recent years as a result.

In addition, government funding of other government agencies that fund research and

development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other

regulatory authorities may also slow the time necessary for new drugs and biologics to be reviewed and/or approved by necessary regulatory

authorities, which would adversely affect our business.

For example, over the last several years, the U.S.

government has shut down several times and certain regulatory authorities, such as

the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the global pandemic

of COVID-19, on March 10, 2020 the FDA announced its intention to postpone most foreign inspections of manufacturing facilities and products

through April 2020, and subsequently, on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing

Subsequently, on July 10, 2020 the FDA announced its intention to resume certain on-site inspections of domestic manufacturing

facilities subject to a risk-based prioritization system.

The FDA intends to use this risk-based assessment system to identify the categories

of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory

Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the

COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns continue to prevent.

Regulatory authorities

outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic.

On February 7,

2022, the FDA announced that domestic inspections across all commodities will resume due to the decline in COVID-19 cases in the U.S.

Previously planned foreign surveillance inspections that have received country clearance and are within the Centers for Disease Control

and Prevention’s Level 1 or Level 2 COVID-19 travel recommendation will also proceed.

Planning for additional foreign surveillance

inspections is ongoing, with an anticipated goal of conducting foreign prioritized inspections starting in April 2022.

If a prolonged

government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their

regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory

authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We are subject to certain U.S.

and foreign anticorruption, anti-money

laundering, export control, sanctions and other trade laws and regulations.

government has shut down several

times and certain regulatory authorities, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

are subject to certain U.S.

and foreign anticorruption, anti-money laundering, export control, sanctions and other trade laws and regulations.

We can face serious consequences for violations.

Among other matters, U.S.

and foreign anticorruption,

anti-money laundering, export control, sanctions and other trade laws and regulations, which are collectively referred to as Trade Laws,

prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors

and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper

payments or anything else of value to or from recipients in the public or private sector.

Violations of Trade Laws can result in substantial

criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud

litigation, reputational harm, and other consequences.

We have direct or indirect interactions with officials and employees of government

agencies or government-affiliated hospitals, universities and other organizations.

We also expect our non-U.S.

activities to increase

We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations and

other regulatory approvals, and we can be held liable for the corrupt or other illegal activities of our personnel, agents or partners,

even if we do not explicitly authorize or have prior knowledge of such activities.

Risks Related to our Licensed and Co-Owned Intellectual Property

The license agreements we maintain, including the Yeda 2015 License

Agreement, with Yeda are important to our business.

If we or the other parties to our license agreements fail to adequately perform under

the license agreements, or if we or they terminate the license agreements, the development, testing, manufacture, production and sale

of our phage-based therapeutic product candidates would be delayed or terminated, and our business would be adversely affected.

The Yeda 2015 License Agreement provides for an

exclusive worldwide license to certain know-how and research information related to the development, testing, manufacture, production

and sale of microbiome-based therapeutic product candidates, including candidates specified in the agreement, which are used in our phage

discovery platform, as well as patents, research and other rights to phage product candidates resulting from the work of the consultants

identified in the agreement and further research that we funded.

The License Agreement terminates upon the later of the expiration of

the last of the patents covered under the License Agreement and the expiry of a continuous 15-year period during which there has not been

a first commercial sale of any product in any country.

Yeda may also terminate the agreement if we fail to observe certain diligence and

development requirements and milestones as described in the License Agreement.

we or Yeda may terminate the agreement for the material

uncured breach of the other party after a notice period or the other party’s winding up, bankruptcy, insolvency, dissolution or

other similar discontinuation of business.

Upon termination of the agreement, other than due to the passage of time, we are required to

grant to Yeda a nonexclusive, irrevocable, perpetual, fully paid-up, sublicensable, worldwide license in respect of our rights in know-how

and research results as described in the Yeda 2015 License Agreement, provided that, if Yeda subsequently grants a license to a third

party that utilizes our rights, we are entitled to share in the net proceeds actually received by Yeda arising out of that license, subject

to a cap based on the development expenses that we incur in connection with the License Agreement.

For more information on the License

Agreement, see “ Business—Material Agreements—License Agreements—License Agreement with Yeda.

We also maintain additional license agreements:

with Keio and JSR, pursuant to which we were granted an exclusive, royalty-bearing, worldwide, perpetual sublicense by JSR to certain patent rights related to our IBD program.

Specifically, these patent rights relate to bacterial targets that have been observed to be related to IBD and the phage that were observed to eradicate these bacterial targets;

with Keio and JSR, pursuant to which we were granted an exclusive, royalty-bearing, worldwide, perpetual sublicense by JSR to certain patent rights related to PSC program.

Specifically, these patent rights relate to bacterial targets that have been observed to be related to PSC and the phage that were observed to eradicate these bacterial targets.

Termination of the license agreements could cause

significant delays in our product and commercialization efforts that could prevent us from commercializing our product candidates, including

our microbiome-based therapeutic product candidates, without first expanding our internal capabilities or entering into other agreements

with third parties.

Any alternative collaboration or license could also be on less favorable terms to us.

We are highly dependent on intellectual property licensed from

third parties, and termination or limitation of any of these licenses could result in the loss of significant rights and materially harm

our business.

We currently rely on licenses from third-party

collaborators for certain aspects of our technology and for certain of our existing programs.

In particular, we received exclusive, royalty-bearing

licenses to certain patents held by third parties, including Yeda, Keio and JSR.

Our license agreement with Yeda provide license to certain

know-how and research information related to the development, testing, manufacture, production and sale of microbiome-based therapeutic

product candidates that are used in our phage discovery platform, as well as patents, research and other rights to phage product candidates

resulting from the work of the consultants identified in the agreement and further research that we funded.

Our license agreements with

Keio and JSR provide licenses to patents related to, among other things, IBD and PSC programs.

Pursuant to these license agreements, we

are required to pay annual license fees, as well as a contingent consideration comprised of milestone and royalty payments, which depend

on the achievement of future milestones and potential revenue from products.

If we fail to comply with our obligations under

our license agreements, including payment terms, our licensors may have the right to terminate our license agreements, in which event

we may not be able to develop, manufacture, market or sell the products covered by those license agreements.

We may also face other penalties

under our license agreements if we do not meet our contractual obligations.

Such an occurrence could materially adversely affect the value

of our products being developed under any such license agreements.

Termination of one or more of our license agreements, or reduction

or elimination of our rights under these license agreements, may result in us having to negotiate new or reinstated license agreements,

which may not be available to us on equally favorable terms, or at all, which may mean we are unable to commercialize the affected product

In the future, we may rely upon additional licenses

to certain patent rights and proprietary technology from third parties that are important or necessary to the development of our product

candidates and proprietary product platform.

Patent rights that we in-license in the future may be subject to a reservation of rights

by one or more third parties.

As a result, any such third party may have certain rights to such intellectual property.

In addition, subject to the terms of any such license

agreements, we may not have the right to control the preparation, filing, prosecution and maintenance, and we may not have the right to

control the enforcement and defense, of patents and patent applications covering the technology that we license from third parties.

cannot be certain that our in-licensed patent applications (and any patents issuing therefrom) that are controlled by our licensors will

be prepared, filed, prosecuted, maintained, enforced and defended in a manner consistent with the best interests of our business.

licensors fail to prosecute, maintain, enforce and defend such patents rights, or lose rights to those patent applications (or any patents

issuing therefrom), the rights we have licensed may be reduced or eliminated, our right to develop and commercialize any of our product

candidates and proprietary product platform technology that are subject of such licensed rights could be adversely affected, and we may

not be able to prevent competitors from making, using and selling competing products.

Moreover, we cannot be certain that such activities

by our potential future licensors will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable

patents or other intellectual property rights.

In addition, even where we may have the right to control the prosecution of patents and

patent applications that we may license to and from third parties, we may still be adversely affected or prejudiced by actions or inactions

of our potential future licensees, licensors and their counsel that took place prior to the date of assumption of control over patent

The patent position of biopharmaceutical companies,

including ours and our licensors’, is generally uncertain and involves complex legal and factual considerations and, therefore,

validity and enforceability cannot be predicted with certainty.

Our licensed and co-owned intellectual property may be challenged, deemed

unenforceable, invalidated or circumvented.

We and our licensors will be able to protect our intellectual property rights from unauthorized

use by third parties only to the extent that these rights (and the products and services they cover) are protected by valid and enforceable

patents, copyrights or trademarks, or are effectively maintained as trade secrets.

Any patents obtained by our licensors or us, may

be challenged by re-examination or otherwise invalidated or eventually found unenforceable.

Both the patent application process and the

process of managing patent disputes can be time consuming and expensive.

If we or one of our licensors were to initiate legal proceedings

against a third party to enforce a patent relating to one of our products, the defendant in such litigation could counterclaim that the

asserted patents are invalid and/or unenforceable.

In patent litigation in the U.S., defendant counterclaims alleging invalidity or unenforceability

are common, as are validity challenges by the defendant against the subject patent or related patents before the USPTO.

Grounds for a

validity challenge could be an alleged failure to meet any of several statutory patentability requirements, including lack of novelty,

obviousness, non-enablement, failure to meet the written description requirement, indefiniteness, and/or failure to claim patentable subject

Grounds for an unenforceability assertion could be an allegation that someone connected to prosecution of the patent/s at issue

intentionally withheld material information from the USPTO or made a misleading statement during prosecution.

Additional grounds for an

unenforceability assertion include an allegation of misuse or anticompetitive use of patent rights, and an allegation of incorrect inventorship

with deceptive intent.

Third parties may also raise similar claims before the USPTO, even outside the context of litigation.

of any assertion of invalidity and/or unenforceability is unpredictable.

If a defendant or third party were to prevail on a legal assertion

of invalidity and/or unenforceability, We and our licensors would lose at least part, and perhaps all, of the claims of the challenged

Such a loss of patent protection could have a material adverse impact on our business.

We are dependent on patents and proprietary technology.

fail to adequately protect this intellectual property or if we otherwise do not have exclusivity for the marketing of our products, our

ability to commercialize products could suffer.

Our commercial success will depend in part on our

ability to obtain and maintain patent protection sufficient to prevent others from marketing our product candidates, as well as to defend

and enforce these patents against infringement and to operate without infringing the proprietary rights of others.

Protection of our product

candidates from unauthorized use by third parties will depend on having valid and enforceable patents that cover our product candidates

or their manufacture or use or on having effective trade secret protection.

If our patent applications do not result in issued patents

or if our patents are found to be invalid, we will lose the ability to exclude others from making, using or selling the inventions claimed

other matters, U.S.

and foreign anticorruption, anti-money laundering, export control, sanctions and other trade laws and regulations,

which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal

counsel, accountants, consultants, contractors and other partners from authorizing, promising, offering, providing, soliciting or receiving,

directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector.

Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment,

tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

We have direct or indirect interactions

with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations.

expect our non-U.S.

activities to increase over time.

We plan to engage third parties for clinical trials and/or to obtain necessary

permits, licenses, patent registrations and other regulatory approvals, and we can be held liable for the corrupt or other illegal activities

of our personnel, agents or partners, even if we do not explicitly authorize or have prior knowledge of such activities.

Related to our Licensed and Co-Owned Intellectual Property

license agreements we maintain, including the Yeda 2015 License Agreement, with Yeda are important to our business.

If we or the other

parties to our license agreements fail to adequately perform under the license agreements, or if we or they terminate the license agreements,

the development, testing, manufacture, production and sale of our phage-based therapeutic product candidates would be delayed or terminated,

and our business would be adversely affected.

Yeda 2015 License Agreement provides for an exclusive worldwide license to certain know-how and research information related to the development,

testing, manufacture, production and sale of phage-based therapeutic product candidates, including candidates specified in the agreement,

which are used in our phage discovery platform, as well as patents, research and other rights to phage product candidates resulting from

the work of the consultants identified in the agreement and further research that we funded.

The Yeda 2015 License Agreement terminates

upon the later of the expiration of the last of the patents covered under the Yeda 2015 License Agreement and the expiry of a continuous

15-year period during which there has not been a first commercial sale of any product in any country.

Yeda may also terminate the agreement

if we fail to observe certain diligence and development requirements and milestones as described in the Yeda 2015 License Agreement.

We or Yeda may terminate the agreement for the material uncured breach of the other party after a notice period or the other party’s

winding up, bankruptcy, insolvency, dissolution or other similar discontinuation of business.

Upon termination of the agreement, other

than due to the passage of time, we are required to grant to Yeda a nonexclusive, irrevocable, perpetual, fully paid-up, sublicensable,

worldwide license in respect of our rights in know-how and research results as described in the Yeda 2015 License Agreement, provided

that, if Yeda subsequently grants a license to a third party that utilizes our rights, we are entitled to share in the net proceeds actually

received by Yeda arising out of that license, subject to a cap based on the development expenses that we incur in connection with the

Yeda 2015 License Agreement.

For more information on the Yeda 2015 License Agreement, see “ Business—Material Agreements—License

Agreements—License Agreement with Yeda.

of our license agreements could cause significant delays in our product and commercialization efforts that could prevent us from commercializing

our product candidates, including our phage-based therapeutic product candidates, without first expanding our internal capabilities or

entering into other agreements with third parties.

Any alternative collaboration or license could also be on less favorable terms to

are highly dependent on intellectual property licensed from third parties, and termination or limitation of any of these licenses could

result in the loss of significant rights and materially harm our business.

currently rely on licenses from third-party collaborators for certain aspects of our technology and for certain of our existing programs.

In particular, we received exclusive, royalty-bearing licenses to certain patents held by third parties, including Yeda.

The Yeda 2015

License Agreement provide license to certain know-how and research information related to the development, testing, manufacture, production

and sale of phage-based therapeutic product candidates that are used in our phage discovery platform, as well as patents, research and

other rights to phage product candidates resulting from the work of the consultants identified in the agreement and further research

that we funded.

we fail to comply with our obligations under our license agreements, including payment terms, our licensors may have the right to terminate

our license agreements, in which event we may not be able to develop, manufacture, market or sell the products covered by those license

We may also face other penalties under our license agreements if we do not meet our contractual obligations.

Such an occurrence

could materially adversely affect the value of our products being developed under any such license agreements.

Termination of one or

more of our license agreements, or reduction or elimination of our rights under these license agreements, may result in us having to

negotiate new or reinstated license agreements, which may not be available to us on equally favorable terms, or at all, which may mean

we are unable to commercialize the affected product candidates.

the future, we may rely upon additional licenses to certain patent rights and proprietary technology from third parties that are important

or necessary to the development of our product candidates and proprietary product platform.

Patent rights that we in-license in the future

may be subject to a reservation of rights by one or more third parties.

As a result, any such third party may have certain rights to

such intellectual property.

addition, subject to the terms of any such license agreements, we may not have the right to control the preparation, filing, prosecution

and maintenance, and we may not have the right to control the enforcement and defense, of patents and patent applications covering the

technology that we license from third parties.

We cannot be certain that our in-licensed patent applications (and any patents issuing

therefrom) that are controlled by our licensors will be prepared, filed, prosecuted, maintained, enforced and defended in a manner consistent

with the best interests of our business.

If our licensors fail to prosecute, maintain, enforce and defend such patents rights, or lose

rights to those patent applications (or any patents issuing therefrom), the rights we have licensed may be reduced or eliminated, our

right to develop and commercialize any of our product candidates and proprietary product platform technology that are subject of such

licensed rights could be adversely affected, and we may not be able to prevent competitors from making, using and selling competing products.

Moreover, we cannot be certain that such activities by our potential future licensors will be conducted in compliance with applicable

laws and regulations or will result in valid and enforceable patents or other intellectual property rights.

In addition, even where we

may have the right to control the prosecution of patents and patent applications that we may license to and from third parties, we may

still be adversely affected or prejudiced by actions or inactions of our potential future licensees, licensors and their counsel that

took place prior to the date of assumption of control over patent prosecution.

patent position of biopharmaceutical companies, including ours and our licensors’, is generally uncertain and involves complex

legal and factual considerations and, therefore, validity and enforceability cannot be predicted with certainty.

Our licensed and co-owned

intellectual property may be challenged, deemed unenforceable, invalidated or circumvented.

We and our licensors will be able to protect

our intellectual property rights from unauthorized use by third parties only to the extent that these rights (and the products and services

they cover) are protected by valid and enforceable patents, copyrights or trademarks, or are effectively maintained as trade secrets.

patents obtained by our licensors or us, may be challenged by re-examination or otherwise invalidated or eventually found unenforceable.

Both the patent application process and the process of managing patent disputes can be time consuming and expensive.

If we or one of

our licensors were to initiate legal proceedings against a third party to enforce a patent relating to one of our products, the defendant

in such litigation could counterclaim that the asserted patents are invalid and/or unenforceable.

In patent litigation in the U.S., defendant

counterclaims alleging invalidity or unenforceability are common, as are validity challenges by the defendant against the subject patent

or related patents before the USPTO.

Grounds for a validity challenge could be an alleged failure to meet any of several statutory patentability

requirements, including lack of novelty, obviousness, non-enablement, failure to meet the written description requirement, indefiniteness,

and/or failure to claim patentable subject matter.

Grounds for an unenforceability assertion could be an allegation that someone connected

to prosecution of the patent/s at issue intentionally withheld material information from the USPTO or made a misleading statement during

Additional grounds for an unenforceability assertion include an allegation of misuse or anticompetitive use of patent rights,

and an allegation of incorrect inventorship with deceptive intent.

Third parties may also raise similar claims before the USPTO, even

outside the context of litigation.

The outcome of any assertion of invalidity and/or unenforceability is unpredictable.

If a defendant

or third party were to prevail on a legal assertion of invalidity and/or unenforceability, we and our licensors would lose at least part,

and perhaps all, of the claims of the challenged patent/s.

Such a loss of patent protection could have a material adverse impact on our

are dependent on patents and proprietary technology.

If we fail to adequately protect this intellectual property or if we otherwise do

not have exclusivity for the marketing of our products, our ability to commercialize products could suffer.

commercial success will depend in part on our ability to obtain and maintain patent protection sufficient to prevent others from marketing

our product candidates, as well as to defend and enforce these patents against infringement and to operate without infringing the proprietary

rights of others.

Protection of our product candidates from unauthorized use by third parties will depend on having valid and enforceable

patents that cover our product candidates or their manufacture or use or on having effective trade secret protection.

If our patent applications

do not result in issued patents or if our patents are found to be invalid, we will lose the ability to exclude others from making, using

or selling the inventions claimed therein.

We have a limited number of patents and pending patent applications.

The patent positions of biotechnology companies

can be uncertain and involve complex legal and factual questions.

This is due to inconsistent application of policies and changes in policy

relating to the examination and enforcement of biotechnology patents to date on a global scale.

The laws of some countries may not protect

intellectual property rights to the same extent as the laws of countries having well-established patent systems, and those countries may

lack adequate rules and procedures for defending our intellectual property rights.

Also, changes in either patent laws or in the interpretations

of patent laws may diminish the value of our intellectual property.

We are not able to guarantee that all of our patent applications will

result in the issuance of patents, and we cannot predict the breadth of claims that may be allowed in our patent applications or in the

patent applications we may license from others.

The Leahy-Smith America Invents Act, or the America

Invents Act, provides for proceedings involving post-issuance patent review procedures, such as inter partes review, or IPR, and post-grant

review, that allow third parties to challenge the validity of an issued patent in front of the USPTO Patent Trial and Appeal Board.

proceeding has different eligibility criteria and different patentability challenges that can be raised.

IPRs permit any person (except

a party who has been litigating the patent for more than a year) to challenge the validity of the patent on the grounds that it was anticipated

or made obvious by prior art.

Patents covering pharmaceutical products have been subject to attack in IPRs from generic drug companies

and from hedge funds.

If it is within nine months of the issuance of the challenged patent, a third party can petition the USPTO for post-grant

review, which can be based on any invalidity grounds and is not limited to prior art patents or printed publications.

In post-issuance proceedings, USPTO rules and regulations

generally tend to favor patent challengers over patent owners.

For example, unlike in district court litigation, claims challenged in

post-issuance proceedings are given their broadest reasonable meaning, which increases the chance a claim might be invalidated by prior

art or lack support in the patent specification.

As another example, unlike in district court litigation, there is no presumption of validity

for an issued patent, and thus a challenger’s burden to prove invalidity is by a preponderance of the evidence, as opposed to the

heightened clear and convincing evidence standard.

As a result of these rules and others, statistics released by the USPTO show a high

percentage of claims being invalidated in post-issuance proceedings.

Moreover, with few exceptions, there is no standing requirement to

petition the USPTO for inter partes review or post-grant review.

In other words, companies that have not been charged with infringement

or that lack commercial interest in the patented subject matter can still petition the USPTO for review of an issued patent.

where we have issued patents, our rights under those patents may be challenged and ultimately not provide us with sufficient protection

against competitive products or processes.

The degree of future protection for our proprietary

rights is uncertain, because legal means afford only limited protection and may not adequately protect our rights or permit us to gain

or keep our competitive advantage.

● we might not be the first to

file patent applications for our inventions;

● others may independently develop

similar or alternative product candidates to any of our product candidates that fall outside the scope of our patents;

● our pending patent applications

may not result in issued patents;

● our issued patents may not provide

a basis for commercially viable products or may not provide us with any competitive advantages or may be challenged by third parties;

patent positions of biotechnology companies can be uncertain and involve complex legal and factual questions.

This is due to inconsistent

application of policies and changes in policy relating to the examination and enforcement of biotechnology patents to date on a global

The laws of some countries may not protect intellectual property rights to the same extent as the laws of countries having well-established

patent systems, and those countries may lack adequate rules and procedures for defending our intellectual property rights.

Also, changes

in either patent laws or in the interpretations of patent laws may diminish the value of our intellectual property.

We are not able to

guarantee that all of our patent applications will result in the issuance of patents, and we cannot predict the breadth of claims that

may be allowed in our patent applications or in the patent applications we may license from others.

Leahy-Smith America Invents Act provides for proceedings involving post-issuance patent review procedures, such as inter partes review,

or IPR, and post-grant review, that allow third parties to challenge the validity of an issued patent in front of the USPTO Patent Trial

and Appeal Board.

Each proceeding has different eligibility criteria and different patentability challenges that can be raised.

permit any person (except a party who has been litigating the patent for more than a year) to challenge the validity of the patent on

the grounds that it was anticipated or made obvious by prior art.

Patents covering pharmaceutical products have been subject to attack

in IPRs from generic drug companies and from hedge funds.

If it is within nine months of the issuance of the challenged patent, a third

party can petition the USPTO for post-grant review, which can be based on any invalidity grounds and is not limited to prior art patents

or printed publications.

post-issuance proceedings, USPTO rules and regulations generally tend to favor patent challengers over patent owners.

For example, unlike

in district court litigation, claims challenged in post-issuance proceedings are given their broadest reasonable meaning, which increases

the chance a claim might be invalidated by prior art or lack support in the patent specification.

As another example, unlike in district

court litigation, there is no presumption of validity for an issued patent, and thus a challenger’s burden to prove invalidity

is by a preponderance of the evidence, as opposed to the heightened clear and convincing evidence standard.

As a result of these rules

and others, statistics released by the USPTO show a high percentage of claims being invalidated in post-issuance proceedings.

with few exceptions, there is no standing requirement to petition the USPTO for inter partes review or post-grant review.

In other words,

companies that have not been charged with infringement or that lack commercial interest in the patented subject matter can still petition

the USPTO for review of an issued patent.

Thus, even where we have issued patents, our rights under those patents may be challenged and

ultimately not provide us with sufficient protection against competitive products or processes.

degree of future protection for our proprietary rights is uncertain, because legal means afford only limited protection and may not adequately

protect our rights or permit us to gain or keep our competitive advantage.

we might not be the first to file patent applications

for our inventions;

others may independently develop similar or alternative

product candidates to any of our product candidates that fall outside the scope of our patents;

our pending patent applications may not result in issued

our issued patents may not provide a basis for commercially

viable products or may not provide us with any competitive advantages or may be challenged by third parties;

others may design around our

3 unchanged sentences

we are dependent upon the diligence

of our appointed agents in national jurisdictions, acting for and on our behalf, which control the prosecution of pending domestic and

foreign patent applications and maintain granted domestic and foreign patents.

An issued patent does not guarantee us the right

to practice the patented technology or commercialize the patented product.

Third parties may have blocking patents that could be used

to prevent us from commercializing our patented products and practicing our patented technology.

Our issued patents and those that may

be issued in the future may be challenged, invalidated or circumvented, which could limit our ability to prevent competitors from marketing

the same or related product candidates or could limit the length of the term of patent protection of our product candidates.

because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before

any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following

commercialization, thereby reducing any advantage of the patent.

Patent term extensions may not be available for these patents.

Our rights to develop and commercialize our product candidates

and proprietary product platform may be subject, in part, to the terms and conditions of current and future licenses granted to us by

Some of our licensed rights could provide us with

freedom to operate for aspects of our products and services.

We may need to obtain additional licenses from others to advance our research,

development and commercialization activities.

Disputes may arise between us and our licensors

regarding intellectual property subject to a license agreement, including:

of our appointed agents in national jurisdictions, acting for and on our behalf, which control the prosecution of pending domestic

and foreign patent applications and maintain granted domestic and foreign patents.

issued patent does not guarantee us the right to practice the patented technology or commercialize the patented product.

Third parties

may have blocking patents that could be used to prevent us from commercializing our patented products and practicing our patented technology.

Our issued patents and those that may be issued in the future may be challenged, invalidated or circumvented, which could limit our ability

to prevent competitors from marketing the same or related product candidates or could limit the length of the term of patent protection

of our product candidates.

Moreover, because of the extensive time required for development, testing and regulatory review of a potential

product, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in

force for only a short period following commercialization, thereby reducing any advantage of the patent.

Patent term extensions may not

be available for these patents.

rights to develop and commercialize our product candidates and proprietary product platform may be subject, in part, to the terms and

conditions of current and future licenses granted to us by others.

of our licensed rights could provide us with freedom to operate for aspects of our products and services.

We may need to obtain additional

licenses from others to advance our research, development and commercialization activities.

may arise between us and our licensors regarding intellectual property subject to a license agreement, including:

the scope of rights granted

under the license agreement and other interpretation-related issues;

● whether, and the extent to which,

our products, services, technology and processes infringe on the intellectual property of the licensor that is not subject to the license

our right to sublicense patent and other rights to third parties under collaborative development relationships;

whether, and the extent to

which, our products, services, technology and processes infringe on the intellectual property of the licensor that is not subject

to the license agreement;

our right to sublicense patent

and other rights to third parties under collaborative development relationships;

our diligence obligations under

4 unchanged sentences

patented technology.

If we do not prevail in such disputes, we may

lose any or all of our rights under such license agreements.

In addition, the agreements under which we currently

license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible

to multiple interpretations.

The resolution of any contract interpretation disagreement that may arise could narrow what we believe to

be the scope of our rights to the relevant intellectual property or technology or could increase what we believe to be our financial or

other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition,

results of operations and prospects.

Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability

to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize

any affected products or services, which could have a material adverse effect on our business, financial conditions, results of operations

and prospects.

Absent the license agreements, we may infringe

patents subject to those agreements, and, if the license agreements are terminated, we may be subject to litigation by the licensor.

could result in substantial costs to us and distract our management.

If we do not prevail, we may be required to pay damages, including

treble damages, attorneys’ fees, costs and expenses and royalties.

We may also be enjoined from selling our products or services,

which could adversely affect our ability to offer products or services, our ability to continue operations, and our financial condition.

If we infringe the rights of third parties, we could be prevented

from selling products, forced to pay damages and/or royalties, and forced to defend against litigation.

We do not believe that the products we are currently

developing infringe upon the rights of any third parties or are infringed upon by third parties.

However, there can be no assurance that

our technology will not be found in the future to infringe upon the rights of others or be infringed upon by others.

Moreover, patent

applications are in some cases maintained in secrecy until patents are issued.

The publication of discoveries in the scientific or patent

literature frequently occurs much later than the date on which the underlying discoveries were made and patent applications were filed.

Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result

in issued patents that our products or product candidates infringe.

For example, pending patent applications may exist that provide support

or can be amended to provide support for a claim that results in an issued patent that is infringed by one or more of our products.

such a case, others may assert infringement claims against us, and should we be found to infringe these patents or impermissibly use their

intellectual property, we might be forced to pay damages, potentially including treble damages, if we are found to have willfully infringed

on such third parties’ patent rights.

In addition to any damages we might have to pay,

we may also be required to obtain licenses from the holders of this intellectual property, enter into royalty agreements, or redesign

our products so as not to use this intellectual property.

Each of these penalties may prove to be uneconomical or otherwise impossible.

We may fail to obtain any such licenses or intellectual property rights on commercially reasonable terms.

Even if we are able to obtain

a license, it may be non-exclusive, thereby giving our competitors access to the same licensed technologies.

In that event, we may be

required to spend significant time and resources to develop or license replacement technologies.

If we are unable to do so, we may be

unable to develop or commercialize the affected products, which could materially harm our business.

Conversely, we may not be able to

pursue claims against third parties that infringe on our licensed or co-owned technology.

Thus, our licensed and co-owned technology may

not provide adequate protection against competitors.

The pharmaceutical industry is characterized by

extensive litigation regarding patents and other intellectual property rights.

Moreover, the cost to us of any litigation or other proceeding

relating to our licensed and/or co-owned intellectual property rights, even if resolved in our favor, could be substantial.

Any such litigation

would divert our management efforts, and we may not have sufficient resources to bring any such action to a successful conclusion.

Uncertainties

resulting from the initiation and continuation of any litigation could limit our ability to continue operations.

Additionally, because our pipeline may involve

additional development candidates that could require the use of proprietary rights held by third parties, the growth of our business could

depend in part on our ability to acquire, in-license or use these proprietary rights.

In addition, our development candidates may require

specific formulations to work effectively and efficiently and these rights may be held by others.

We may be unable to acquire or in-license

any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify.

licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies

are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.

These established

companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization

capabilities.

For example, we sometimes collaborate with U.S.

and foreign academic institutions to accelerate our preclinical research or development under written agreements with these institutions.

Typically, these institutions provide us with an option to negotiate a license to any of the institution’s rights in technology

resulting from the collaboration.

Regardless of such right of first negotiation for intellectual property, we may be unable to negotiate

a license within the specified time frame or under terms that are acceptable to us.

If we are unable to do so, the institution may offer

the intellectual property rights to other parties, potentially blocking our ability to pursue our program.

In addition, companies that perceive us to be a

competitor may be unwilling to assign or license rights to us.

We also may be unable to license or acquire third-party intellectual property

rights on terms that would allow us to make an appropriate return on our investment.

If we are unable to successfully obtain rights to

require third-party intellectual property rights, our business, financial condition and prospects for growth could suffer.

We may not be successful in obtaining, through acquisitions,

in-licenses or otherwise, necessary rights to our product candidates, proprietary product platform technologies or other technologies.

We currently have rights to certain intellectual

property, through licenses from third parties, to develop our product candidates and proprietary product platform technologies.

Some healthcare

companies and academic institutions are competing with us in the field of microbiome therapies and may have patents and/or have filed

and are likely filing patent applications potentially relevant to our business.

In order to avoid infringing these third-party patents,

we may find it necessary or prudent to obtain licenses to such patents from such third-party intellectual property holders.

require licenses from third parties for certain technologies that we may be evaluating for use with our current or future product candidates.

However, we may be unable to secure such licenses or otherwise acquire or in-license any compositions, methods of use, processes or other

intellectual property rights from third parties that we identify as necessary for our current or future product candidates and our proprietary

product platform at a reasonable cost or on reasonable terms, if at all.

The licensing or acquisition of third-party intellectual property

rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual

property rights that we may consider attractive or necessary.

These established companies may have a competitive advantage over us due

to their size, capital resources and greater clinical development and commercialization capabilities.

In addition, companies that perceive

us to be a competitor may be unwilling to assign or license rights to us.

We also may be unable to license or acquire third-party intellectual

property rights on terms that would allow us to make an appropriate return on our investment or at all.

In the event that we try to obtain rights to required

third-party intellectual property rights and is ultimately unsuccessful, we may be required to expend significant time and resources to

redesign our technology, product candidates or the methods for manufacturing them or to develop or license replacement technology, all

of which may not be feasible on a technical or commercial basis.

If we are unable to do so, we may be unable to develop or commercialize

the affected product candidates or continue to utilize our existing proprietary product platform technology, which could significantly

harm our business, financial condition, results of operations and prospects.

We rely on our proprietary product platform to identify microbiome

Our competitive position could be materially harmed if our competitors develop a similar platform and develop rival product

We rely on know-how, inventions and other proprietary

information to strengthen our competitive position.

We consider know-how to be our primary intellectual property with respect to our proprietary

product platform.

Our clinical trials allow us to collect clinical data, which we use as a feedback loop to make improvements to our proprietary

product platform.

In particular, we anticipate that, with respect to this proprietary product platform, this data may over time be disseminated

within the industry through independent development, the publication of journal articles describing the method and the movement of skilled

We cannot rule out that our competitors may have

or obtain the knowledge necessary to analyze and characterize similar data to our known data for the purpose of identifying and developing

products that could compete with any of our product candidates.

Our competitors may also have significantly greater financial, product

development, technical and human resources access to date.

Further, our competitors may have significantly greater experience in using

translational science methods to identify and develop product candidates.

We may not be able to prohibit our competitors

from using technology or methods that are the same as or similar to our proprietary product platform to develop their own product candidates.

If our competitors develop associated therapies, our ability to develop and market a promising product or product candidate may diminish

substantially, which could have a material adverse effect on our business, financial condition, prospects and results of operations.

We rely on trade secrets and other forms of non-patent intellectual

property protection.

If we are unable to protect our trade secrets, other companies may be able to compete more effectively against us.

We rely on trade secrets to protect certain aspects

of our technology, including our proprietary processes for manufacturing and purifying bacteriophage.

Trade secrets are difficult to protect,

especially in the pharmaceutical industry, where much of the information about a product must be made public during the regulatory approval

Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific

collaborators and other advisors may unintentionally or willfully disclose our information to competitors.

Enforcing a claim that a third

party illegally obtained and is using our trade secret information is expensive and time-consuming, and the outcome is unpredictable.

In addition, courts outside the United States may be less willing to or may not protect trade secrets.

Moreover, our competitors may independently

develop equivalent knowledge, methods and know-how.

If we are sued for infringing intellectual property rights of

third parties or if we are forced to engage in an interference proceeding, it will be costly and time-consuming, and an unfavorable outcome

in that litigation or interference would have a material adverse effect on our business.

Our ability to commercialize our product candidates

depends on our ability to develop, manufacture, market and sell our product candidates without infringing the proprietary rights of third

we do not prevail in such disputes, we may lose any or all of our rights under such license agreements.

addition, the agreements under which we currently license intellectual property or technology from third parties are complex, and certain

provisions in such agreements may be susceptible to multiple interpretations.

The resolution of any contract interpretation disagreement

that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology or could

increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material

adverse effect on our business, financial condition, results of operations and prospects.

Moreover, if disputes over intellectual property

that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms,

we may be unable to successfully develop and commercialize any affected products or services, which could have a material adverse effect

on our business, financial conditions, results of operations and prospects.

the license agreements, we may infringe patents subject to those agreements, and, if the license agreements are terminated, we may be

subject to litigation by the licensor.

Litigation could result in substantial costs to us and distract our management.

If we do not prevail,

we may be required to pay damages, including treble damages, attorneys’ fees, costs and expenses and royalties.

We may also be

enjoined from selling our products or services, which could adversely affect our ability to offer products or services, our ability to

continue operations, and our financial condition.

we infringe the rights of third parties, we could be prevented from selling products, forced to pay damages and/or royalties, and forced

to defend against litigation.

do not believe that the products we are currently developing infringe upon the rights of any third parties or are infringed upon by third

However, there can be no assurance that our technology will not be found in the future to infringe upon the rights of others

or be infringed upon by others.

Moreover, patent applications are in some cases maintained in secrecy until patents are issued.

The publication

of discoveries in the scientific or patent literature frequently occurs much later than the date on which the underlying discoveries

were made and patent applications were filed.

Because patents can take many years to issue, there may be currently pending applications

of which we are unaware that may later result in issued patents that our products or product candidates infringe.

For example, pending

patent applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent

that is infringed by one or more of our products.

In such a case, others may assert infringement claims against us, and should we be

found to infringe these patents or impermissibly use their intellectual property, we might be forced to pay damages, potentially including

treble damages, if we are found to have willfully infringed on such third parties’ patent rights.

addition to any damages we might have to pay, we may also be required to obtain licenses from the holders of this intellectual property,

enter into royalty agreements, or redesign our products so as not to use this intellectual property.

Each of these penalties may prove

to be uneconomical or otherwise impossible.

We may fail to obtain any such licenses or intellectual property rights on commercially reasonable

Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same licensed technologies.

In that event, we may be required to spend significant time and resources to develop or license replacement technologies.

If we are unable

to do so, we may be unable to develop or commercialize the affected products, which could materially harm our business.

Conversely, we

may not be able to pursue claims against third parties that infringe on our licensed or co-owned technology.

Thus, our licensed and co-owned

technology may not provide adequate protection against competitors.

pharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights.

the cost to us of any litigation or other proceeding relating to our licensed and/or co-owned intellectual property rights, even if resolved

in our favor, could be substantial.

Any such litigation would divert our management efforts, and we may not have sufficient resources

to bring any such action to a successful conclusion.

Uncertainties resulting from the initiation and continuation of any litigation could

limit our ability to continue operations.

Additionally,

because our pipeline may involve additional development candidates that could require the use of proprietary rights held by third parties,

the growth of our business could depend in part on our ability to acquire, in-license or use these proprietary rights.

In addition, our

development candidates may require specific formulations to work effectively and efficiently and these rights may be held by others.

We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights

from third parties that we identify.

The licensing and acquisition of third-party intellectual property rights is a competitive area,

and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights

that we may consider attractive.

These established companies may have a competitive advantage over us due to their size, cash resources,

and greater clinical development and commercialization capabilities.

example, we sometimes collaborate with U.S.

and foreign academic institutions to accelerate our preclinical research or development under

written agreements with these institutions.

Typically, these institutions provide us with an option to negotiate a license to any of

the institution’s rights in technology resulting from the collaboration.

Regardless of such right of first negotiation for intellectual

property, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us.

unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue

addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.

We also may be unable to

license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment.

If we are unable to successfully obtain rights to require third-party intellectual property rights, our business, financial condition

and prospects for growth could suffer.

may not be successful in obtaining, through acquisitions, in-licenses or otherwise, necessary rights to our product candidates, proprietary

product platform technologies or other technologies.

currently have rights to certain intellectual property, through licenses from third parties, to develop our product candidates and proprietary

product platform technologies.

Some healthcare companies and academic institutions are competing with us in the field of phage-based

therapies and may have patents and/or have filed and are likely filing patent applications potentially relevant to our business.

to avoid infringing these third-party patents, we may find it necessary or prudent to obtain licenses to such patents from such third-party

intellectual property holders.

We may also require licenses from third parties for certain technologies that we may be evaluating for

use with our current or future product candidates.

However, we may be unable to secure such licenses or otherwise acquire or in-license

any compositions, methods of use, processes or other intellectual property rights from third parties that we identify as necessary for

our current or future product candidates and our proprietary product platform at a reasonable cost or on reasonable terms, if at all.

The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies

may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary.

established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development

and commercialization capabilities.

In addition, companies that perceive us to be a competitor may be unwilling to assign or license

rights to us.

We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make

an appropriate return on our investment or at all.

the event that we try to obtain rights to required third-party intellectual property rights and are ultimately unsuccessful, we may be

required to expend significant time and resources to redesign our technology, product candidates or the methods for manufacturing them

or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis.

If we are unable

to do so, we may be unable to develop or commercialize the affected product candidates or continue to utilize our existing proprietary

product platform technology, which could significantly harm our business, financial condition, results of operations and prospects.

rely on our proprietary product platform to identify phage-based therapies.

Our competitive position could be materially harmed if our

competitors develop a similar platform and develop rival product candidates.

rely on know-how, inventions and other proprietary information to strengthen our competitive position.

We consider know-how to be our

primary intellectual property with respect to our proprietary product platform.

Our clinical trials allow us to collect clinical data,

which we use as a feedback loop to make improvements to our proprietary product platform.

In particular, we anticipate that, with respect

to this proprietary product platform, this data may over time be disseminated within the industry through independent development, the

publication of journal articles describing the method and the movement of skilled personnel.

cannot rule out that our competitors may have or obtain the knowledge necessary to analyze and characterize similar data to our known

data for the purpose of identifying and developing products that could compete with any of our product candidates.

Our competitors may

also have significantly greater financial, product development, technical and human resources access to date.

Further, our competitors

may have significantly greater experience in using translational science methods to identify and develop product candidates.

may not be able to prohibit our competitors from using technology or methods that are the same as or similar to our proprietary product

platform to develop their own product candidates.

If our competitors develop associated therapies, our ability to develop and market

a promising product or product candidate may diminish substantially, which could have a material adverse effect on our business, financial

condition, prospects and results of operations.

rely on trade secrets and other forms of non-patent intellectual property protection.

If we are unable to protect our trade secrets,

other companies may be able to compete more effectively against us.

rely on trade secrets to protect certain aspects of our technology, including our proprietary processes for manufacturing and purifying

bacteriophage.

Trade secrets are difficult to protect, especially in the pharmaceutical industry, where much of the information about

a product must be made public during the regulatory approval process.

Although we use reasonable efforts to protect our trade secrets,

our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose

our information to competitors.

Enforcing a claim that a third party illegally obtained and is using our trade secret information is

expensive and time-consuming, and the outcome is unpredictable.

In addition, courts outside the United States may be less willing to

or may not protect trade secrets.

Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

we are sued for infringing intellectual property rights of third parties or if we are forced to engage in an interference proceeding,

it will be costly and time-consuming, and an unfavorable outcome in that litigation or interference would have a material adverse effect

on our business.

ability to commercialize our product candidates depends on our ability to develop, manufacture, market and sell our product candidates

without infringing the proprietary rights of third parties.

Numerous U.S.

and foreign patents and patent applications, which are owned by third parties, exist in the general field of anti-infective

products or in fields that otherwise may relate to our product candidates.

If we are shown to infringe, we could be enjoined from the

use or sale of the claimed invention if we are unable to prove that the patent is invalid.

In addition, because patent applications can

take many years to issue, there may be currently pending patent applications, unknown to us, that may later result in issued patents that

our product candidates may infringe or that may trigger an interference proceeding regarding one of our owned or licensed patents or applications.

There could also be existing patents of which we are not aware that our product candidates may inadvertently infringe or that may become

involved in an interference proceeding.

The biotechnology and pharmaceutical industries

are characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement.

so long as our product candidates are in clinical trials, we believe our clinical activities fall within the scope of the exemptions provided

Section 271(e) in the United States, which exempts from patent infringement liability activities reasonably related to the

development and submission of information to the FDA.

As our clinical investigational drug product candidates progress toward commercialization,

the possibility of a patent infringement claim against us increases.

While we attempt to ensure that our active clinical investigational

drugs and the methods we employ to manufacture them, as well as the methods for their use we intend to promote, do not infringe other

parties’ patents and other proprietary rights, we cannot be certain they do not, and competitors or other parties may assert that

we infringe their proprietary rights in any event.

We may be exposed to future litigation based on

claims that our product candidates, the methods we employ to manufacture them or the uses for which we intend to promote them infringe

the intellectual property rights of others.

Our ability to manufacture and commercialize our product candidates may depend on our ability

to demonstrate that the manufacturing processes we employ and the use of our product candidates do not infringe third-party patents.

third-party patents were found to cover our product candidates or their use or manufacture, we could be required to pay damages or be

enjoined and therefore unable to commercialize our product candidates, unless we obtained a license.

A license may not be available to

us on acceptable terms, if at all.

We may become subject to claims for remuneration or royalties

for assigned service invention rights by our employees, which could result in litigation and adversely affect our business.

A significant portion of our intellectual property

has been developed by our employees in the course of their employment for us.

Under the Israeli Patent Law, 5727-1967, or the Patent Law,

inventions conceived by an employee during the term and as part of the scope of his or her employment with a company are regarded as “service

inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service

invention rights.

The Patent Law also provides that, if there is no such agreement between an employer and an employee, the Israeli Compensation

and Royalties Committee, or the Committee, a body constituted under the Patent Law, shall determine whether the employee is entitled to

remuneration for his or her inventions.

We generally enter into assignment of invention agreements with our employees pursuant to which

such individuals assign to us all rights to any inventions created in the scope of their employment or engagement with us.

employees have agreed to assign to our service invention rights, we may face claims demanding remuneration in consideration for assigned

As a consequence of such claims, we could be required to pay additional remuneration or royalties to our current or former

employees or be forced to litigate such claims, which could negatively affect our business.

Risks Related to Our Reliance on Third Parties

We rely, and continue to rely, on third parties to conduct our

clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such

We continue to rely on third parties, such as contract

research organizations, or CROs, and clinical investigators, to conduct and manage our clinical trials.

Our reliance on these third parties for research

and development activities will reduce our control over these activities but does not relieve us of our responsibilities.

we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and

protocols for the trial.

Moreover, the FDA requires us to comply with GCPs for conducting, recording and reporting the results of clinical

trials to assure that data and reported results are credible and accurate and that the rights, safety and welfare of trial participants

are protected.

Other countries’ regulatory agencies also have requirements for clinical trials with which we must comply.

also required to register ongoing clinical trials and post the results of completed clinical trials in a government-sponsored database,

clinicaltrials.gov, within specified time frames.

Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions.

Furthermore, these third parties may also have

relationships with other entities, some of which may be our competitors.

If these third parties do not successfully carry out their contractual

duties, do not meet expected deadlines, experience work stoppages, terminate their agreements with us or need to be replaced, or do not

conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we may need to enter into new arrangements

with alternative third parties, which could be difficult, costly or impossible, and our clinical trials may be extended, delayed, terminated

or need to be repeated.

If any of the foregoing occurs, we may not be able to obtain, or may be delayed in obtaining, marketing approvals

for our product candidates and may not be able to, or may be delayed in our efforts to, successfully commercialize our product candidates.

We also rely on other third parties to store and

distribute drug supplies for our clinical trials.

Any performance failure on the part of our distributors could delay clinical development

or marketing approval of our product candidates or commercialization of our products, producing additional losses and depriving us of

potential product revenue.

Third-party relationships are important to our business.

are unable to maintain our collaborations or enter into new relationships, or if these relationships are not successful, our business

could be adversely affected.

We have limited capabilities for product development

and do not yet have any capability for sales, marketing or distribution.

Accordingly, we enter into relationships with other companies

and academic institutions to provide us with important technology, and we may receive additional technology and funding under these and

other collaborations in the future.

The relationships we enter into may pose a number of risks, including the following:

and foreign patents and patent applications, which are owned

by third parties, exist in the general field of anti-infective products or in fields that otherwise may relate to our product candidates.

If we are shown to infringe, we could be enjoined from the use or sale of the claimed invention if we are unable to prove that the patent

In addition, because patent applications can take many years to issue, there may be currently pending patent applications,

unknown to us, that may later result in issued patents that our product candidates may infringe or that may trigger an interference proceeding

regarding one of our owned or licensed patents or applications.

There could also be existing patents of which we are not aware that our

product candidates may inadvertently infringe or that may become involved in an interference proceeding.

biotechnology and pharmaceutical industries are characterized by the existence of a large number of patents and frequent litigation based

on allegations of patent infringement.

For so long as our product candidates are in clinical trials, we believe our clinical activities

fall within the scope of the exemptions provided by 35 U.S.C.

Section 271(e) in the United States, which exempts from patent infringement

liability activities reasonably related to the development and submission of information to the FDA.

As our clinical investigational

drug product candidates progress toward commercialization, the possibility of a patent infringement claim against us increases.

we attempt to ensure that our active clinical investigational drugs and the methods we employ to manufacture them, as well as the methods

for their use we intend to promote, do not infringe other parties’ patents and other proprietary rights, we cannot be certain they

do not, and competitors or other parties may assert that we infringe their proprietary rights in any event.

may be exposed to future litigation based on claims that our product candidates, the methods we employ to manufacture them or the uses

for which we intend to promote them infringe the intellectual property rights of others.

Our ability to manufacture and commercialize

our product candidates may depend on our ability to demonstrate that the manufacturing processes we employ and the use of our product

candidates do not infringe third-party patents.

If third-party patents were found to cover our product candidates or their use or manufacture,

we could be required to pay damages or be enjoined and therefore unable to commercialize our product candidates, unless we obtained a

A license may not be available to us on acceptable terms, if at all.

may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result

in litigation and adversely affect our business.

significant portion of our intellectual property has been developed by our employees in the course of their employment for us.

the Israeli Patent Law, 5727-1967, or the Patent Law, inventions conceived by an employee during the term and as part of the scope of

his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific

agreement between the employee and employer giving the employee service invention rights.

The Patent Law also provides that, if there

is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee, a body constituted under

the Patent Law, shall determine whether the employee is entitled to remuneration for his or her inventions.

We generally enter into assignment

of invention agreements with our employees pursuant to which such individuals assign to us all rights to any inventions created in the

scope of their employment or engagement with us.

Although our employees have agreed to assign to our service invention rights, we may

face claims demanding remuneration in consideration for assigned inventions.

As a consequence of such claims, we could be required to

pay additional remuneration or royalties to our current or former employees or be forced to litigate such claims, which could negatively

affect our business.

Related to Our Reliance on Third Parties

rely, and continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily,

including failing to meet deadlines for the completion of such trials.

continue to rely on third parties, such as contract research organizations, or CROs, and clinical investigators, to conduct and manage

our clinical trials.

reliance on these third parties for research and development activities will reduce our control over these activities but does not relieve

us of our responsibilities.

For example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance

with the general investigational plan and protocols for the trial.

Moreover, the FDA requires us to comply with GCPs for conducting,

recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the

rights, safety and welfare of trial participants are protected.

Other countries’ regulatory agencies also have requirements for

clinical trials with which we must comply.

We are also required to register ongoing clinical trials and post the results of completed

clinical trials in a government-sponsored database, clinicaltrials.gov, within specified time frames.

Failure to do so can result in

fines, adverse publicity, and civil and criminal sanctions.

these third parties may also have relationships with other entities, some of which may be our competitors.

If these third parties do

not successfully carry out their contractual duties, do not meet expected deadlines, experience work stoppages, terminate their agreements

with us or need to be replaced, or do not conduct our clinical trials in accordance with regulatory requirements or our stated protocols,

we may need to enter into new arrangements with alternative third parties, which could be difficult, costly or impossible, and our clinical

trials may be extended, delayed, terminated or need to be repeated.

If any of the foregoing occurs, we may not be able to obtain, or

may be delayed in obtaining, marketing approvals for our product candidates and may not be able to, or may be delayed in our efforts

to, successfully commercialize our product candidates.

also rely on other third parties to store and distribute drug supplies for our clinical trials.

Any performance failure on the part of

our distributors could delay clinical development or marketing approval of our product candidates or commercialization of our products,

producing additional losses and depriving us of potential product revenue.

relationships are important to our business.

If we are unable to maintain our collaborations or enter into new relationships, or if these

relationships are not successful, our business could be adversely affected.

have limited capabilities for product development and do not yet have any capability for sales, marketing or distribution.

we enter into relationships with other companies and academic institutions to provide us with important technology, and we may receive

additional technology and funding under these and other collaborations in the future.

The relationships we enter into may pose a number

of risks, including the following:

third parties have, and future

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may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue

or renew development or commercialization programs based on clinical trial results, changes in the third parties’ strategic focus

or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities;

● third parties may delay clinical

trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct

new clinical trials or require a new formulation of a product candidate for clinical testing;

● current and future third parties

could independently develop, or develop with third parties, products that compete directly or indirectly with our products and product

candidates if the third parties believe that the competitive products are more likely to be successfully developed or can be commercialized

under terms that are more economically attractive than ours;

● product candidates discovered

in collaboration with us may be viewed by our current or future third parties as competitive with their own product candidates or products,

which may cause such third parties to cease to devote resources to the commercialization of our product candidates;

● current and future third parties

may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product

candidate or product;

● current and future third parties

with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient

resources to the marketing and distribution of such product or products;

● disagreements with current or

future third parties, including disagreements over proprietary rights, contract interpretation or the preferred course of development,

might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional

responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming

and expensive;

● current and future third parties

may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite

litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

● current and future third parties

may infringe the intellectual property rights of others, which may expose us to litigation and potential liability;

● current and future third parties

may infringe regulatory frameworks (such as but not limited to cybersecurity and/or privacy frameworks), which may expose us to litigation

and potential liability or require or lead us to terminate relationships with them;

● if a current or future third

party is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of

any product candidate licensed to it by us;

● current and future relationships

may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development

or commercialization of the applicable product candidates.

or renew development or commercialization programs based on clinical trial results, changes in the third parties’ strategic

focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities;

third parties may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

current and future third parties could independently develop, or develop with third parties, products that compete directly or indirectly with our products and product candidates if the third parties believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;

product candidates discovered in collaboration with us may be viewed by our current or future third parties as competitive with their own product candidates or products, which may cause such third parties to cease to devote resources to the commercialization of our product candidates;

current and future third parties may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product;

current and future third parties with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;

disagreements with current or future third parties, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

current and future third parties may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;

current and future third parties may infringe the intellectual property rights of others, which may expose us to litigation and potential liability;

current and future third parties may infringe regulatory frameworks (such as but not limited to cybersecurity and/or privacy frameworks), which may expose us to litigation and potential liability or require or lead us to terminate relationships with them;

if a current or future third party is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by us;

current and future relationships may be terminated by the collaborator, and, if terminated, we could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

If our relationships do not result in the successful

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Risks Related to Our Operations in Israel

Our headquarters, research and development and other significant

operations are located in Israel, and, therefore, our results may be adversely affected by political, economic and military instability

in Israel, including the recent war with Hamas and other terrorist organizations from the Gaza Strip.

Our executive offices and research and development

facilities are located in Israel.

In addition, the majority of our key employees and all of our officers are residents of Israel.

political, geopolitical, economic and military conditions in Israel may directly affect our business.

Since the establishment of the State

of Israel in 1948, a number of armed conflicts have taken place between Israel and its neighboring Arab countries, the Hamas (an Islamist

terrorist militia and political group that controls the Gaza strip), the Hezbollah (an Islamist terrorist militia and political group

based in Lebanon) and other terrorist organizations active in the region.

These conflicts have involved missile strikes, hostile infiltrations

and terrorism against civilian targets in various parts of Israel, which have negatively affected business conditions in Israel.

Any hostilities

involving Israel or the interruption or curtailment of trade between Israel and its trading partners could negatively affect business

conditions in Israel in general and our business in particular, and adversely affect our product development, operations and results of

In October 2023, Hamas terrorists infiltrated Israel’s

southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.

Hamas also launched extensive

rocket attacks on Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas

within the State of Israel.

These attacks resulted in extensive deaths, injuries and kidnapping of civilians and soldiers.

Following the

attack, Israel’s security cabinet declared war against Hamas and a military campaign against these terrorist organizations commenced

in parallel to their continued rocket and terror attacks.

In addition, since the commencement of these events, there have been continued

hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization) and southern border (with the Houthi

movement in Yemen, as described below).

It is possible that hostilities with Hezbollah in Lebanon will escalate, and that other terrorist

organizations, including Palestinian military organizations in the West Bank as well as other hostile countries, such as Iran, will join

the hostilities.

Such clashes may escalate in the future into a greater regional conflict.

In connection with the Israeli security cabinet’s declaration

of war against Hamas and possible hostilities with other organizations, several hundred thousand Israeli military reservists were drafted

to perform immediate military service, including 9 employees, none of whom are management or key employees, who were called up for reserve

service, of which 4 have since returned to work full time and their pre-war military reserve duty.

So long as the war continues, our personnel

may be called up for reserve service, whether for an extended periods or periodically for short-term periods.

Military service call ups

that result in absences of personnel for an extended period of time may materially and adversely affect our business, prospects, financial

condition and results of operations.

Since the war broke out on October 7, 2023,

our operations have not been adversely affected by this situation, and we have not experienced disruptions to our business operations.

As such, our product and business development activities remain on track.

However, the intensity and duration of Israel’s current

war against Hamas is difficult to predict at this stage, as are such war’s economic implications on our business and operations

and on Israel’s economy in general.

If the war extends for a long period of time or expands to other fronts, such as Lebanon, Syria

and the West Bank, our operations may be adversely affected.

Any armed conflicts, terrorist activities or political

instability in the region could adversely affect business conditions, could harm our results of operations and the market price of our

Common Stock, and could make it more difficult for us to raise capital.

Our commercial insurance does not cover losses

that may occur as a result of an event associated with the security situation in the Middle East.

Although the Israeli government has

in the past covered the reinstatement value of certain damages that were caused by terrorist attacks or acts of war, we cannot assure

you that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred.

Any losses or damages incurred by us could have a material adverse effect on our business.

Finally, political conditions within Israel may

affect our operations.

Israel has held five general elections between 2019 and 2022, and prior to October 2023, the Israeli government

pursued extensive changes to Israel’s judicial system, which sparked extensive political debate and unrest.

To date, these initiatives

have been substantially put on hold.

Actual or perceived political instability in Israel or any negative changes in the political environment,

may individually or in the aggregate adversely affect the Israeli economy and, in turn, our business, financial condition, results of

operations and growth prospects.

Our operations may be disrupted as a result of the obligation

of management or key personnel to perform military service.

As of the date hereof, we currently have 99 full-time

employees, of which 64 are located in Israel, including 5 members of our senior management.

Certain of our employees and consultants in

Israel, including members of our senior management, may be obligated to perform military reserve duty generally until they reach the age

of 40 (or older, for officers or other citizens who hold certain positions in the Israeli armed forces reserves) and, in the event of

a military conflict, may be called to active duty.

In response to increases in terrorist activity, there have been periods of significant

call-ups of military reservists.

It is possible that there will be similar large-scale military reserve duty call-ups in

Our operations could be disrupted by the absence of a significant number of our officers, directors, employees and consultants.

Such disruption could materially adversely affect our business and operations.

The Israeli government grants we have received for research and

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We, therefore, must comply

with the requirements of the Israel Encouragement of Research and Development in Industries, or the Research Law.

For the years ended

December 31, 2022 and 2021, we recorded grants totaling $1.1 million and $3.7 million, from the IIA, respectively.

The grants represented

6.1% and 13.7% of our gross research and development expenditures for the years ended December 31, 2022 and 2021, respectively.

with the requirements of Israel’s Law for the Encouragement of Research and Development in Industries, or the Research Law.

the years ended December 31, 2023 and 2022, we recorded grants totaling $1.0 million and $1.1 million, from the IIA, respectively.

grants represented 7.3% and 6.1% of our gross research and development expenditures for the years ended December 31, 2023 and 2022, respectively.

Under the Research Law, we are required to manufacture

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IIA grants is sold or out licensed to a non-Israeli entity, the maximum aggregate royalties paid generally would not exceed 100% of the

grants made to us, plus annual interest equal to the 12-month LIBOR rate applicable to dollar deposits, as published on the first business

day of each calendar year.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced in July 2017 that

it will no longer persuade or require banks to submit rates for LIBOR after 2021.

In September 2021, the Bank of Israel, which

determines annual interest rates, published a directive which stated that annual interest at a variable rate linked to the LIBOR rate

for loans in U.S.

dollars will be replaced by the Secured Overnight Financing Rate, or the SOFR, in June 2023.

While it is not currently

possible to determine precisely whether, or to what extent, the replacement of LIBOR with SOFR would affect us, the implementation of

SOFR may increase our financial liabilities to the IIA.

Management continues to monitor the status and discussions regarding SOFR.

We are not yet able to reasonably estimate the expected impact.

As of December 31, 2022, the balance of the principal and interest

in respect of our commitments for future payments to the IIA totaled approximately $6.6 million.

As part of funding our current and planned

product development activities, we have submitted follow-up grant applications for additional grants.

grants made to us, plus annual interest equal to the 12-month Secured Overnight Financing Rate, or SOFR, applicable to dollar deposits,

as published on the first trading day of each calendar year.

As of December 31, 2023, the balance of the principal and interest in respect

of our commitments for future payments to the IIA totaled approximately $7.9 million.

As part of funding our current and planned product

development activities, we may submit follow-up grant applications for additional grants.

These grants have funded some of our personnel,

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negatively impact our ability to develop our product candidates.

Potential political, economic and military instability in the

State of Israel, where the majority of our senior management and our research and development facilities are located, may adversely affect

our results of operations.

Our headquarters and principal offices and most

of our operations are located in the State of Israel.

In addition, all but one of our key employees and officers are residents of Israel.

Accordingly, political, economic and military conditions in Israel directly affect our business.

Any hostilities involving Israel or the interruption

or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition

of Israel, could affect adversely our operations.

Ongoing and revived hostilities or other Israeli political or economic factors could

harm our operations, product development and results of operations.

Although Israel has entered into various agreements

with Egypt, Jordan, the Palestinian Authority and with various states in the Persian Gulf, there has been a continuous unrest and terrorist

activity with varying levels of severity, the most recent of which was the armed conflict with Hamas in May 2021.

In addition, Israel

faces threats from more distant neighbors, in particular, Iran.

Our insurance policies do not cover us for the damages incurred in connection

with these conflicts or for any resulting disruption in our operations.

The Israeli government, as a matter of law, provides coverage

for the reinstatement value of direct damages that are caused by terrorist attacks or acts of war;

however, the government may cease providing

such coverage or the coverage might not be enough to cover potential damages.

In the event that hostilities disrupt the ongoing operation

of our facilities or the airports and seaports on which we depend to import and export our supplies and products, our operations may be

materially adversely affected.

Several countries, principally in the Middle East,

still restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with

Israel and Israeli companies, whether as a result of hostilities in the region or otherwise.

In addition, there have been increased efforts

by activists to cause companies, research institutions and consumers to boycott Israeli goods and cooperation with Israeli-related entities

based on Israeli government policies.

Such actions, particularly if they become more widespread, may adversely impact our ability to cooperate

with research institutions and collaborate with other third parties.

Any hostilities involving Israel, any interruption or curtailment

of trade or scientific cooperation between Israel and its present partners, or a significant downturn in the economic or financial condition

of Israel could adversely affect our business, financial condition and results of operations.

We may also be targeted by cyber terrorists

specifically because we are an Israeli-related company.

Notwithstanding such boycotts and other hostile

actions, in August 2020, an agreement for the normalization of relations between Israel and the United Arab Emirates, or UAE, was reached

and in September 2020 the Abraham Accords Peace Treaty was signed at the White House.

The Accords officially established diplomatic relations

between Israel and the UAE.

This was shortly followed by an agreement for the normalization of ties between Israel and the Kingdom of

Bahrain, which was signed in a Joint Communique between Israel and Bahrain in Manama, Bahrain in November 2020.

In December 2020, Israel

and Morocco established full diplomatic relations.

And in January 2021, Sudan acceded to the Abraham Accords during the visit of then-U.S.

Treasury Secretary Steven Mnuchin to Khartoum.

These agreements have led to other trade and military alliances between Israel and neighboring

Arab countries.

In addition, the Israeli government is currently

pursuing extensive changes to Israel’s judicial system.

This has sparked extensive political debate.

In response to the foregoing

developments, many individuals, organizations and institutions, both within and outside of Israel, have voiced concerns that the proposed

changes may negatively impact the business environment in Israel, including due to reluctance of foreign investors to invest or transact

business in Israel, increased currency fluctuations, downgrades in credit rating, increased interest rates, increased volatility in security

markets, and other changes in macroeconomic conditions.

To the extent that any of these negative developments do occur, they may have

an adverse effect on our business, our results of operations and our ability to hire and preserve our employees and to raise additional

Exchange rate fluctuations between the U.S.

Dollar, the New Israeli

Shekel, the Euro and other foreign currencies, may negatively affect our future expenses.

Our proceeds from sales of our securities are generally

received in U.S.

Our headquarters are located in Israel, where the majority of our general and administrative expenses and research

and development costs are incurred in the New Israeli Shekel, or NIS.

Future expenses may be incurred in foreign currencies such as the

Euro or British Pound.

As a result, our financial results may be affected by fluctuations in the exchange rates of currencies in the countries.

For example, during 2020, we witnessed a strengthening of the average exchange rate of the NIS against the U.S.

Dollar, which increased

Dollar value of Israeli expenses.

If the NIS strengthens against the U.S.

Dollar, as it did in 2020 and 2021, the U.S.

value of our Israeli expenses, mainly personnel and facility-related, will increase.

We use foreign exchange contracts (mainly option

and forward contracts) to hedge balance sheet items from currency exposure.

However, these foreign exchange contracts are not designated

as hedging instruments for accounting purposes and they may not be effective.

Although exposure to currency fluctuations to date has not

had a material adverse effect on our business, there can be no assurance that fluctuations in the future will not have a material adverse

effect on our operating results and financial condition.

Under applicable employment laws, we may not be able to enforce

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trade secrets or other intellectual property.

Our operations may be disrupted by the obligations of personnel

to perform military service.

Some of our employees based in Israel may be called

upon to perform annual military reserve duty and, in emergency circumstances, could be called to immediate and unlimited active duty.

Our operations could be disrupted by the absence of a significant number of our employees related to military service or the absence for

extended periods of one or more of our executive officers or other key employees.

Such disruption could materially adversely affect our

business and results of operations.

The tax benefits that are available to us if and when we generate

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be eligible for certain tax benefits provided to “Technologic Preferred Enterprise” and/or “Preferred Enterprise”

as defined under the Encouragement of Capital Investment Law -1959, or the “Law, and its regulations, as amended and, accordingly,

could be subject to a reduced corporate tax rate on its income that will meet the provisions of the Law (ranging between 7.5%-16%).

the extent that we are not eligible to obtain such statuses, our Israeli taxable income would be subject to regular Israeli corporate

as defined under the Encouragement of Capital Investment Law -1959, the Law, and its regulations, as amended and, accordingly, could be

subject to a reduced corporate tax rate on its income that will meet the provisions of the Law (ranging between 7.5%-16%).

To the extent

that we are not eligible to obtain such statuses, our Israeli taxable income would be subject to regular Israeli corporate tax rates.

The standard corporate tax rate for Israeli companies is 23%.

The benefits available to us in accordance to the Law and its

regulations are subject to the fulfillment of conditions stipulated in the Law and the regulations.

Further, in the future, these tax

benefits may be reduced or discontinued.

The benefits available to us in accordance to the Law and its regulations

are subject to the fulfillment of conditions stipulated in the Law and the regulations.

Further, in the future, these tax benefits may

be reduced or discontinued.

It may be difficult to enforce a U.S.

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A significant number of shares of our Common Stock are subject

to issuance upon exercise of outstanding warrants and options, which upon such exercise may result in dilution to our security holders.

to issuance upon exercise of outstanding warrants and options or conversion of our Convertible Preferred Stock, which upon such exercise

or conversion, as applicable, may result in dilution to our security holders.

As of December 31, 2023, we had an aggregate of

warrants outstanding to purchase an aggregate of up to 9,215,475 shares of Common Stock with a weighted average exercise price of $9.51,

certain of which are included in our outstanding units, certain of which were issued in private placements and certain of which are traded

on the NYSE American under the symbol “PHGE.WS,” or the Outstanding Warrants, in each case subject to adjustment.

To the extent

such warrants are exercised, additional shares of our Common Stock will be issued, which will result in dilution to the then existing

holders of Common Stock and increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such

shares in the public market could adversely affect the market price of our Common Stock.

25,363,688 warrants outstanding to purchase an aggregate of up to 20,926,189 shares of Common Stock with a weighted average exercise price

of $2.60, certain of which, or the Unit Warrants are included in our outstanding units, each consisting of one share of Common Stock and

one warrant exercisable for one-half of one share of Common Stock, or the Units, certain of which were issued in private placements, or

Private Warrants, certain of which, or the Pre-funded Warrants, were issued in the February 2023 PIPE, and certain of which, or the Public

Warrants, were previously traded on NYSE American under the symbol “PHGE.WS,” and are currently quoted on OTC Pink under the

symbol “PHGEW”.

Unit Warrants, Private Warrants, Pre-funded Warrants and Public Warrants, collectively, or the Outstanding

Warrants, in each case subject to adjustment.

To the extent such Outstanding Warrants are exercised, additional shares of our Common Stock

will be issued, which will result in dilution to the then existing holders of Common Stock and increase the number of shares eligible

for resale in the public market.

Sales of substantial numbers of such shares in the public market could adversely affect the market price

of our Common Stock.

In addition, as of December 31, 2023, we had outstanding

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144 under the Securities Act with respect to shares held by our affiliates), which will result in dilution to our security holders.

plan to grant additional options and warrants in the future.

The issuance of additional securities could also have an adverse effect on

the market price of our Common Stock.

Furthermore, (i) in connection with the Acquisition,

in addition to issuance of Common Stock, we issued (a) an aggregate of 40,470 shares of Convertible Preferred Stock, which, in the event

our stockholders approve the conversion of the Convertible Preferred Stock at the Stockholder Meeting, will be convertible into an aggregate

of up to 40,470,000 shares of our Common Stock, and (b) warrants, or Merger Warrants, which, in the event our stockholders approve the

exercise of the Merger Warrants at the Stockholder Meeting, will be exercisable for an aggregate of 2,416,497 shares of Common Stock,

and (ii) in connection with the March 2024 PIPE, we issued (x) an aggregate of 216,417 shares of Convertible Preferred Stock, which, in

the event our stockholders approve the conversion of the Convertible Preferred Stock at the Stockholder Meeting, will be convertible into

an aggregate of up to 216,417,000 shares of Common Stock, and (y) Private Placement Warrants, which, in the event our stockholders approve

the exercise of the Private Placement Warrants at the Stockholder Meeting, will be exercisable for an aggregate of 108,208,500 shares

of our Common Stock.

Additionally, as partial compensation to the placement agents for the March 2024 PIPE, we issued warrants, or Placement

Agent Warrants, and collectively with the Merger Warrants and the Private Placement Warrants, the Warrants, which, in the event our stockholders

approve the conversion of the Placement Agent Warrants at the Stockholder Meeting, will be exercisable for up to an aggregate of 9,523,809

shares of Common Stock.

To the extent any of the Convertible Preferred Stock is converted or any of the Warrants are exercised, additional

shares of Common Stock will be issued that, subject to applicable securities laws, will generally be eligible for resale in the public

market (subject to limitations under Rule 144 under the Securities Act with respect to shares held by our affiliates).

Sales of substantial

numbers of such shares in the public market could adversely affect the market price of our Common Stock.

We plan to grant additional options, subject to

stockholder approval at the Stockholder Meeting and may issue additional warrants and shares of preferred stock in the future.

the issuance of additional shares of our Common Stock upon exercise of such securities, as applicable, will result in dilution to the

then existing holders of Common Stock and could also have an adverse effect on the market price of our Common Stock.

We have never paid dividends on our Common Stock, and we do not

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if any, of our Common Stock will be our stockholders’ sole source of gain for the foreseeable future.

We may be unable to maintain the listing of our securities in

Our Common Stock and certain of our warrants currently

trade on the NYSE American.

If our Common Stock or warrants are subsequently delisted, we could face significant material adverse consequences,

● a limited availability of market

quotations for our securities;

● reduced liquidity with respect

to our securities;

● a determination that our shares

are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting

in a reduced level of trading activity in the secondary trading market for our securities;

● a limited amount of news and

analyst coverage for the post-transaction company;

● a decreased ability to issue

additional securities or obtain additional financing in the future.

Our Public Warrants have been delisted, and we may be unable

to maintain the listing of our securities in the future.

Our Common Stock and Units trade on NYSE American.

Our Public Warrants previously traded on NYSE American but were delisted in June 2023 and since then have been quoted on OTC Pink.

a result of the delisting of our Public Warrants, the holders thereof have experienced a limited availability of market quotations and

reduced liquidity with respect to their Public Warrants.

If our Common Stock or Units are subsequently delisted, we could face significant

material adverse consequences, including:

a limited availability of market quotations for our securities;

reduced liquidity with respect to our securities;

a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities;

a limited amount of news and analyst coverage for the Company;

a decreased ability to issue additional securities or obtain additional financing in the future.

The market price of our Common Stock and other securities may

be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our Common Stock.

The stock markets in general and the markets for

biotechnology stocks have experienced extreme volatility.

The market for the common stock of smaller companies such as ours is characterized

by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities

exchange and have large public floats, and our share price is more volatile than the shares of such larger, more established companies

for the indefinite future.

In addition to the factors discussed in this “Risk

Factors” section, price declines in our Common Stock (and other securities) could also result from general market and economic conditions

and a variety of other factors, including:

adverse results or delays in our clinical trials;

adverse actions taken by regulatory agencies with respect to our product candidates, clinical trials or the manufacturing processes of our product candidates;

announcements of technological innovations, patents or new products by our competitors;

regulatory developments in the United States and foreign countries;

any lawsuit involving us or our product candidates;

announcements concerning our competitors, or the biotechnology or pharmaceutical industries in general;

developments concerning any strategic alliances or acquisitions we may enter into;

actual or anticipated variations in our operating results;

changes in recommendations by securities analysts or lack of analyst coverage;

deviations in our operating results from the estimates of analysts;

our inability, or the perception by investors that we will be unable, to continue to meet all applicable requirements for continued listing of our Common Stock on NYSE American, and the possible delisting of our Common Stock;

sales of our Common Stock by our executive officers, directors and principal stockholders or sales of substantial amounts of Common Stock;

loss of any of our key scientific or management personnel.

Additionally, market prices for securities of biotechnology

companies historically have been very volatile.

The market for these securities has from time to time experienced significant price and

volume fluctuations for reasons unrelated to the operating performance of any one company.

Furthermore, our business may be adversely

impacted by risks, or the public perception of the risks, related to a pandemic or other health crisis, such as the COVID-19 or as a result

of the Israel-Hamas War or the Russian invasion of Ukraine and the resulting world sanctions on Russia, Belarus, and related parties.

A significant outbreak of contagious diseases could result in a widespread health crisis that could adversely affect the economies and

financial markets of many countries, resulting in an economic downturn.

In the past, following periods of volatility in

the market price of a particular company’s securities, litigation has often been brought against that company.

Any such lawsuit

could consume resources and management time and attention, which could adversely affect our business.

As a “smaller reporting company” we are permitted

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in product development and harm our business.

Additionally, our recent acquisition of APT and its integration into the Company’s

business may increase the likelihood that employees depart in the foreseeable future.

Our continued ability to attract, retain and motivate

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and financial results could be materially and adversely affected.

Failure to comply with health and data protection laws and regulations

could lead to claims, government enforcement actions (which could include civil or criminal penalties), regulatory actions, private litigation

and/or adverse publicity and could negatively affect our operating results and business.

We may be subject to federal, state and foreign

data protection laws and regulations (i.e., laws and regulations that address privacy and security).

In the United States, numerous federal

and state laws and regulations, including federal health information privacy laws, state consumer privacy laws, state data breach notification

laws, state health information privacy laws and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission

Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations

or the operations of our collaborators.

In addition, we may obtain health information from third parties (including research institutions

from which we obtain clinical trial data) that are subject to privacy and security requirements under the Health Insurance Portability

and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health of 2009, or

Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use or disclose individually

identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

Additional requirements may also be imposed by

international data protection laws.

In this context, Regulation 2016/679 of the GDPR (in addition to many other international data protection

laws) may have an impact on our operations when we collect and/or process personal data of individuals located in the European Union.

The GDPR has applied since May 25, 2018 (replacing previously applicable data protection frameworks) and has an extraterritorial reach.

The GDPR allows members states to introduce specific requirements in relation to certain areas, including processing of special categories

of data, and we may face further restrictions and non-compliance risks under such national frameworks.

We have not yet assessed whether

its activities might be caught by the GDPR.

Because of the types of data we collect and process,

which may involve health, biometric and genetic data, we may face high risks for non-compliance with the GDPR rules (or local declinations

of GDPR-rules across the different European Union Member States), as these types of data are considered as special categories of data

and are granted higher protection.

The risks are further increased considering the diverging approach in the European Union as to the

rules, requirements and frameworks in relation to the processing of personal data in clinical trials (in matters such as the choice of

the legal basis for the processing of data, the possible uses of the personal data collected, etc.) and the interplay with other relevant

The GDPR introduced stringent data protection requirements in the European Union, as well as potential fines for noncompliant

companies of up to the greater of €20 million or 4% of annual worldwide turnover.

Supervisory authorities also have the ability to

restrict our processing activities if those are deemed not to be in compliance with the GDPR (or local declinations);

this may significantly

impact the way we conduct our activities.

The GDPR imposes numerous requirements for the collection, use and disclosure of personal data,

including high standards for consent to be valid, and specific information to be provided to individuals about how their personal data

is used, the obligation to notify regulators and (in some cases) to communicate to affected individuals of personal data breaches, extensive

new internal privacy governance requirements and obligations to allow individuals to exercise their strengthened privacy rights (e.g.,

the right to access, correct and delete their personal data, to withdraw their consent, etc.), and obligations when contracting with third

parties such as service providers, CROs, etc.

In addition, the GDPR includes restrictions on data transfers outside the European Economic

Area, or EEA.

The actual mechanisms made available under GDPR to transfer such personal data have received heightened regulatory and judicial

If we cannot rely on existing mechanisms for transferring personal data from the EEA, the United Kingdom, or other jurisdictions,

we may be unable to transfer personal data in those regions.

Further, the United Kingdom’s vote in favor of exiting the European

Union, often referred to as “Brexit,” has created uncertainty as to whether or not the United Kingdom data protection legislation

will depart from the GDPR and how data transfers to and from the United Kingdom will be regulated.

Compliance with U.S.

and international data protection

laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose

data, or in some cases, impact our ability to operate in certain jurisdictions.

Such laws and regulations could limit our ability to use

and share personal or other data, thereby increasing our costs and harming our business and financial condition.

Failure to comply with

and international data protection laws and regulations could result in claims, government enforcement actions (which could include

civil or criminal penalties), regulatory actions, private litigation and/or adverse publicity and could negatively affect our operating

results and business.

Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the

providers who share this information with us, may contractually limit our ability to use and disclose the information.

Claims that we

have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations,

even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm

our business.

Finally, we may be required to disclose personal data pursuant to demands from government agencies, from law enforcement

agencies, and from intelligence agencies.

This disclosure may result in a failure or perceived failure by us to comply with data privacy

laws, rules, and regulations and could result in proceedings or actions against us in the same or other jurisdictions, and could have

an adverse impact on our reputation and brand.

Our relationships with healthcare providers, physicians and third-party

payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to

criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and third-party

payors in the United States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products.

with third-party payors and customers can expose pharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare

laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, or FCA, and foreign

equivalent legislation, which may constrain the business or financial arrangements and relationships through which such companies sell,

market and distribute pharmaceutical products.

In particular, the promotion, sales and marketing of healthcare items and services, as

well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks,

self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing

and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally.

subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

The applicable federal, state and foreign healthcare laws and regulations laws that may affect our ability to operate include, but are

not limited to:

● the federal Anti-Kickback Statute,

which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any

kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the

referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may

be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs.

A person or entity can

be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it.

In addition, a claim

including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for

purposes of the FCA.

The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on

the one hand and prescribers, purchasers and formulary managers on the other hand.

There are a number of statutory exceptions and regulatory

safe harbors protecting some common activities from prosecution;

● federal civil and criminal false

claims laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to

be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid or other federal healthcare programs, knowingly

making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay

or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing

an obligation to pay money to the federal government.

Manufacturers can be held liable under the FCA even when they do not submit claims

directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims.

The FCA also permits

a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations

of the FCA and to share in any monetary recovery;

● HIPAA, which created new federal

criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit

program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or

under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and

willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection

with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.

Similar to the federal Anti-Kickback

Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate

the federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the United States Department of Health and Human Services information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified registered nurse anesthetists and certified nurse midwives) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by nongovernmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents;

state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers;

and state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

European Union and other foreign provisions.

The distribution of pharmaceutical products is

subject to additional requirements and regulations, including extensive recordkeeping, licensing, storage, security requirements intended

to prevent the unauthorized sale of pharmaceutical products and, in some foreign countries, including the European Union countries, mandatory

anti-counterfeit features.

The scope and enforcement of each of these laws

is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable

precedent and regulations.

Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare

companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare

Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government

authorities, can be time- and resource-consuming and can divert a company’s attention from the business.

It is not always possible to identify and deter

employee misconduct, and the precautions we take to detect and prevent inappropriate conduct may not be effective in controlling unknown

or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure

to be in compliance with such laws or regulations.

Efforts to ensure that our business arrangements will comply with applicable healthcare

laws may involve substantial costs.

It is possible that governmental and enforcement authorities will conclude that our business practices

may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws

and regulations.

The failure to comply with any of these laws or regulatory requirements could subject us to possible legal or regulatory

Depending on the circumstances, failure to meet applicable regulatory requirements can result in civil, criminal and administrative

penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from participation in federal and state funded healthcare

programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight

if we become subject to a corporate integrity agreement or other agreement to resolve allegations of noncompliance with these laws.

action for violation of these laws, even if successfully defended, could cause a pharmaceutical manufacturer to incur significant legal

expenses and divert management’s attention from the operation of the business.

Prohibitions or restrictions on sales or withdrawal

of future marketed products could materially affect business in an adverse way.

In addition, the approval and commercialization

of any of our product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws mentioned

above, among other foreign laws.

If we engage in future acquisitions or strategic partnerships,

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us to other risks.

We may evaluate various acquisition opportunities

and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies or businesses.

On March 15, 2024, we acquired APT.

We may evaluate

various additional acquisition opportunities and strategic partnerships, including licensing or acquiring complementary products, intellectual

property rights, technologies or businesses.

Any potential acquisition or strategic partnership may entail numerous risks, including:

● increased operating expenses

and cash requirements;

● the assumption of additional

indebtedness or contingent liabilities;

increased operating expenses and cash requirements;

the assumption of additional indebtedness or contingent liabilities;

the issuance of our equity securities;

● assimilation of operations,

intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;

● the diversion of our management’s

attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;

● retention of key employees,

the loss of key personnel and uncertainties in our ability to maintain key business relationships;

● risks and uncertainties associated

with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and

marketing approvals;

● our inability to generate revenue

from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated

acquisition and maintenance costs.

Our business and operations might be adversely affected by security

breaches, including any cybersecurity incidents.

We depend on the efficient and uninterrupted operation

of our computer and communications systems, and those of our consultants, contractors and vendors, which we use for, among other things,

sensitive company data, including our intellectual property, financial data and other proprietary business information.

While certain of our operations have business continuity

and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related interruptions, our IT

infrastructure and the IT infrastructure of our consultants, contractors and vendors are vulnerable to damage from cyberattacks, computer

viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events.

We could experience failures in

our information systems and computer servers, which could result in an interruption of our normal business operations and require substantial

expenditure of financial and administrative resources to remedy.

System failures, accidents or security breaches can cause interruptions

in our operations and can result in a material disruption of our targeted phage therapies, product candidates and other business operations.

The loss of data from completed or future studies or clinical trials could result in delays in our research, development or regulatory

approval efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security

breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary

information, we could incur regulatory investigations and redresses, penalties and liabilities and the development of our product candidates

could be delayed or otherwise adversely affected.

Even though we believe we carry commercially reasonable

business interruption and liability insurance, we might suffer losses as a result of business interruptions that exceed the coverage available

under our insurance policies or for which we do not have coverage.

For example, we are not insured against terrorist attacks or cyberattacks.

Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results.

any such event could delay the development of our product candidates.

In the ordinary course of our business, we collect

and store sensitive data, including intellectual property, clinical trial data, proprietary business information, personal data and personally

identifiable information of our clinical trial subjects and employees, in our data centers and on our networks.

The secure processing,

maintenance and transmission of this information is critical to our operations.

Attacks upon information technology systems are increasing

in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups

and individuals with a wide range of motives and expertise.

As a result of the COVID-19 pandemic, we may also face increased cybersecurity

risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional

opportunities for cybercriminals to exploit vulnerabilities.

Because the techniques used to obtain unauthorized access to, or to sabotage,

systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques

or implement adequate preventative measures.

We may also experience security breaches that may remain undetected for an extended period.

Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or internal bad actors,

or breached due to employee error, a technical vulnerability, malfeasance or other disruptions.

We have experienced and expect to continue

to experience actual and attempted cyber-attacks of our IT networks, such as through phishing scams and ransomware.

Although none of these

actual or attempted cyber-attacks has had a material adverse impact on our operations or financial condition, we cannot guarantee that

any such incidents will not have such an impact in the future.

assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;

the diversion of our management’s attention from our existing product programs and initiatives in pursuing such a strategic merger or acquisition;

retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships;

risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals;

our inability to generate revenue from acquired technology and/or products sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

Our business and operations would suffer

in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security.

Despite the implementation of security measures,

our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural

disasters, terrorism, war, telecommunication and electrical failures, cyber-attacks or cyber-intrusions over the Internet, attachments

to emails, persons inside our organization, or persons with access to systems inside our organization.

The risk of a security breach or

disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists,

has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development

For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in

our clinical trial efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or

security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary

information, we could incur material legal claims and liability, and damage to our reputation, and the further development of our product

candidates could be delayed.

We also maintain compliance programs to address the potential applicability of restrictions against trading

while in possession of material, nonpublic information generally and in connection with a cyber-security breach.

However, a breakdown

in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber

incidents in a timely manner and could have a material adverse effect on our financial position and value of our stock.

We incur significant costs operating as a public company.

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In addition, the Sarbanes-Oxley Act, as well as rules

subsequently adopted by the SEC and the NYSE American to implement provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform

subsequently adopted by the SEC and NYSE American to implement provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform

and Consumer Protection Act, or the Dodd-Frank Act, and the Public Company Accounting Oversight Board impose significant requirements

1 unchanged sentence

in corporate governance practices.

These expenses will likely increase in the future, particularly after we cease to be an “emerging

growth company” if we are also no longer a “smaller reporting company” as a result of additional corporate governance

and disclosure requirements under the Sarbanes-Oxley Act, the Dodd-Frank Act, and SEC rules and regulations.

These expenses will likely increase in the future, particularly if we cease to be a “smaller

reporting company”, as a result of additional corporate governance and disclosure requirements under the Sarbanes-Oxley Act, the

Dodd-Frank Act, and SEC rules and regulations.

The rules and regulations applicable to public

2 unchanged sentences

any net income and may require us to reduce costs in other areas of our business.

Sales of a substantial number of shares of our Common Stock in

the public market by our existing stockholders could cause our stock price to decline.

Sales of a substantial number of shares of our

Common Stock in the public market or the perception that these sales might occur, could depress the market price of our Common Stock and

could impair our ability to raise capital through the sale of additional equity securities.

For example, if the second part of the PIPE

is completed, we will issue a significant amount of additional new shares of our Common Stock that, once registered for re-sale, will

be freely tradeable.

For example, if the second part of the PIPE is completed, we will issue a significant amount of additional new shares

of our Common Stock that, once registered for re-sale, will be freely tradeable.

We are unable to predict the effect that sales may have

on the prevailing market price of our Common Stock.

The market price of our Common Stock and other securities may

be volatile and fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

The stock markets in general and the markets for

biotechnology stocks have experienced extreme volatility.

The market for the common stock of smaller companies such as ours is characterized

by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities

exchange and have large public floats, and our share price is more volatile than the shares of such larger, more established companies

for the indefinite future.

In addition to the factors discussed in this “Risk

Factors” section, price declines in our Common Stock (and other securities) could also result from general market and economic conditions

and a variety of other factors, including:

● adverse results or delays in

our clinical trials;

● adverse actions taken by regulatory

agencies with respect to our product candidates, clinical trials or the manufacturing processes of our product candidates;

● announcements of technological

innovations, patents or new products by our competitors;

● regulatory developments in the

United States and foreign countries;

● any lawsuit involving us or

our product candidates;

● announcements concerning our

competitors, or the biotechnology or pharmaceutical industries in general;

● developments concerning any

strategic alliances or acquisitions we may enter into;

● actual or anticipated variations

in our operating results;

● changes in recommendations by

securities analysts or lack of analyst coverage;

deviations in our operating results from the estimates of analysts;

● our inability, or the perception

by investors that we will be unable, to continue to meet all applicable requirements for continued listing of our Common Stock on the

NYSE American, and the possible delisting of our Common Stock;

● sales of our Common Stock by

our executive officers, directors and principal stockholders or sales of substantial amounts of Common Stock;

● loss of any of our key scientific

or management personnel.

Additionally, market prices for securities of biotechnology

companies historically have been very volatile.

The market for these securities has from time to time experienced significant price and

volume fluctuations for reasons unrelated to the operating performance of any one company.

Furthermore, our business may be adversely

impacted by risks, or the public perception of the risks, related to a pandemic or other health crisis, such as the COVID-19 or as a result

of the Russian invasion of Ukraine and world sanctions on Russia, Belarus, and related parties.

A significant outbreak of contagious diseases

could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting

in an economic downturn.

In the past, following periods of volatility in

the market price of a particular company’s securities, litigation has often been brought against that company.

Any such lawsuit

could consume resources and management time and attention, which could adversely affect our business.

If securities or industry analysts do not publish research or

publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our Common Stock will depend

in part on the research and reports that securities or industry analysts publish about us, our business, our market or our competitors.

Securities and industry analysts do not currently, and may never, publish research on us.

If no securities or industry analysts commence

coverage of our company, our stock price and trading volume could be negatively impacted.

If any of the analysts who may cover us change

their recommendation regarding our stock adversely, provide more favorable relative recommendations about our competitors or publishes

inaccurate or unfavorable research about our business, our stock price would likely decline.

If any analyst who may cover us ceases coverage

of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading

volume to decline.

UNRESOLVED STAFF COMMENTS

Not applicable.

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What changed 10-K

Item 1A. Risk Factors