What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-04-04 compared with 2023-03-29 · 267 added, 233 removed, 330 unchanged (60% of the section changed)

3 unchanged sentences

financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto contained

elsewhere in this report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements

that involve risks and uncertainties.

elsewhere in this Annual Report.

The analysis of the financial condition and results of operations excludes APT as it was acquired after

December 31, 2023.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that

involve risks and uncertainties.

Our actual results may differ materially from those discussed in any forward-looking statement because

1 unchanged sentence

and “Risk Factors” in this Annual Report.

We are a clinical stage microbiome product discovery

company developing products using both natural and engineered phage technologies designed to target and destroy specific harmful bacteria

associated with chronic diseases, such as CF and AD.

Bacteriophage or phage are bacterial, species-specific, strain-limited viruses that

infect, amplify and kill the target bacteria and are considered inert to mammalian cells.

By utilizing proprietary combinations of naturally

occurring phage and by creating novel phage using synthetic biology, we develop phage-based therapies intended to address both large-market

and orphan diseases.

We are a clinical stage product discovery company

developing products using both natural and engineered phage technologies designed to target and kill specific harmful bacteria associated

with chronic diseases, such as CF and DFO.

Bacteriophage or phage are bacterial, species-specific, strain-limited viruses that infect,

amplify and kill the target bacteria and are considered inert to mammalian cells.

By utilizing proprietary combinations of naturally occurring

phage and by creating novel phage using synthetic biology, we develop phage-based therapies intended to address both large-market and

orphan diseases.

Since BiomX Ltd.’s inception in 2015, we

6 unchanged sentences

To date, we have

funded our operations with proceeds from sales of Common Stock, preferred shares, warrants, governmental grants, collaboration agreements

Through December 31, 2022, we had received gross proceeds of approximately $146 million from sales of our securities.

we received approximately $1,134,000 from our collaboration agreements and recorded a reduction from research and development expenses

funded our operations with proceeds from sales of our Common Stock, preferred shares and warrants, governmental grants, collaboration

agreements and debt.

As of December 31, 2023, we had received gross proceeds of approximately $154 million from sales of our securities.

In addition, as of December 31, 2023, we have received $2.0 million from our collaboration agreements and recorded a reduction from research

and development expenses of $2.2 million.

The remainder of $0.2 million was received in January 2024.

In addition, through December 31,

2023, we had received an aggregate of $8.0 million in the form of grants from the IIA, of which $1.1 million had been received as of December

In addition, we have incurred significant operating

4 unchanged sentences

As of December 31, 2023, we

had an accumulated deficit of $136.8 million and expect that for the foreseeable future we will continue to incur significant expenses

as we advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval of

our product candidates.

In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant

commercialization expenses related to product manufacturing, marketing, sales and distribution.

We may also incur expenses in connection

with in-licensing or acquiring additional product candidates.

Because of the numerous risks and uncertainties associated

with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve

or maintain profitability.

had an accumulated deficit of $163 million and expect that for the foreseeable future we will continue to incur significant expenses as

we advance our product candidates from discovery through preclinical development and clinical trials and seek regulatory approval of our

product candidates.

In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization

expenses related to product manufacturing, marketing, sales and distribution.

We may also incur expenses in connection with in-licensing

or acquiring additional product candidates.

Because of the numerous risks and uncertainties

associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able

to achieve or maintain profitability.

Even if we are able to generate product sales, we may not become profitable.

If we fail to become profitable

or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced

to reduce or terminate our operations.

We may implement cost reduction strategies, which may include amending, delaying, limiting, reducing

or terminating one or more of our programs or ongoing or planned clinical trials of our product candidates.

In May 2022, we announced,

as part of our corporate restructuring plan, or the Corporate Restructuring, our intention to reduce our operating costs, including a

50% reduction in personnel, while prioritizing our ongoing CF program.

If we fail to become

profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels

and be forced to reduce or terminate our operations.

We may implement cost reduction strategies, which may include amending, delaying,

limiting, reducing or terminating one or more of our programs or ongoing or planned clinical trials of our product candidates.

2022, we announced, as part of our corporate restructuring plan (the “Corporate Restructuring”), our intention to reduce our

operating costs, including a 50% reduction in personnel, while prioritizing our ongoing CF program.

On December 31, 2023, we had cash, cash equivalents

and restricted cash of $15.9 million.

We believe that our existing cash and cash equivalents and short-term deposits, will enable us to

fund our operating expenses and capital expenditure requirements until at least the middle of 2024, as discussed further below under “-Liquidity

and Capital Resources”

Our financial statements contain an explanatory paragraph regarding substantial doubt about our

ability to continue as a going concern for at least one year until April 3, 2025, as discussed further below under “-Liquidity and

Capital Resources”.

On March 6, 2024 we entered

into a merger agreement with APT and certain other parties, as a result of which APT became our wholly-owned subsidiary, effective as

of March 15, 2024, or the Acquisition.

The Acquisition was structured as a stock-for-stock transaction whereby all outstanding equity

interests of APT were exchanged in a merger for an aggregate of 9,164,968 shares of BiomX common stock, 40,470 shares of Series X Preferred

Stock, convertible upon stockholder approval into 40,470,000 shares of BiomX common stock, and warrants, or the Merger Warrants, exercisable

for 2,166,497 shares of BiomX common stock.

Upon the consummation of the Acquisition, a successor-in-interest of APT became a wholly-owned

subsidiary of BiomX.

The Merger Warrants will be exercisable at any time after the date of the receipt of BiomX stockholder approval of

their exercise at an exercise price of $5.00 per share and will expire on January 28, 2027.

Concurrently with the consummation

of the Acquisition, BiomX consummated a private placement financing, or the March 2024 PIPE, with existing and new investors, resulting

in aggregate gross proceeds of approximately $50 million, in which the investors purchased (i) an aggregate of 216,417 shares of Series

X Preferred Stock, convertible upon stockholder approval into an aggregate of up to 216,417,000 shares of BiomX common stock, and (ii)

warrants, or the Private Placement Warrants, to purchase up to an aggregate of 108,208,500 shares of BiomX common stock, at a combined

purchase price of $231.10 per share of Series X Preferred Stock and an accompanying Private Placement Warrant to purchase 500 shares of

BiomX common stock.

The Private Placement Warrants will be exercisable any time after the date of the receipt of BiomX stockholder approval,

at an exercise price of $0.2311 per share, and will expire on the 24-month anniversary of the initial exercisability date.

Immediately following the

Acquisition, and without taking into account the shares of Convertible Preferred Stock issued in the March 2024 PIPE, and assuming conversion

of all of the Convertible Preferred Stock into Common Stock, our stockholders (including holders of the Pre-Funded Warrants, as defined

below) prior to the Acquisition owned approximately 55% of the share capital of the Company and APT’s stockholders prior to the

Acquisition owned approximately 45% of the share capital of the Company.

Components of Our Consolidated Results of Operations

31 unchanged sentences

USD In thousands

BX001 (discontinued in 2021)

Salaries and related benefits (including stock-based compensation)

Rent and related expenses

Infrastructure & other unallocated research and development or R&D expenses

Infrastructure & other unallocated or R&D expenses

Less grants from the IIA and consideration from collaboration agreements

Total research and development expenses, net

Research and development activities are central to

our business.

Research and development activities are central

to our business.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier

9 unchanged sentences

General and administrative expenses consist primarily

of salaries, related benefits, travel and stock-based compensation expenses for personnel in executive, finance, corporate, business development

of salaries, related benefits and stock-based compensation expenses for personnel in executive, finance, corporate, business development

and administrative functions.

5 unchanged sentences

as operating related costs.

We believe that our general and administrative expenses

may increase in the future as we increase our headcount to support our continued research activities and development of our product candidates.

We also anticipate that we will continue to incur significant accounting, audit, legal, regulatory, compliance, directors’ and officers’

insurance costs as well as investor and public relations expenses associated with being a public company.

We anticipate the additional

costs for these services will increase our general and administrative expenses in the future.

Additionally, if and when we believe a regulatory

approval of a product candidate appears likely, we anticipate an increase in payroll and expenses as a result of our preparation for commercial

operations, especially as it relates to the sales and marketing of our product candidate.

We believe that our general and administrative

expenses may increase in the future as we integrate the APT operations and support our continued research activities and development of

our product candidates.

We also anticipate that we will continue to incur significant accounting, audit, legal, regulatory, compliance,

directors’ and officers’ insurance costs as well as investor and public relations expenses associated with being a public

We anticipate the additional costs for these services will increase our general and administrative expenses in the future.

Additionally,

if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in payroll and expenses

as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidate.

Amortization of intangible assets

Intangible assets consist of in-process research

and development, amortized for a period of three years, that started on January 1, 2020.

and development, amortized for a period of three years, that started on January 1, 2020 and ended on December 31, 2022.

Other income consists of proceeds from sub-leasing

1 unchanged sentence

Interest expenses

Interest expense consists of interest incurred

under the Hercules Loan Agreement.

Interest expense consists of interest incurred under the Hercules Loan

Agreement (as defined below(.

We entered into a Loan and Security Agreement with Hercules Capital, Inc., or Hercules, with respect to

a venture debt facility, or the Hercules Loan Agreement.

Under the Hercules Loan Agreement, Hercules provided the Company with access

to a term loan with an aggregate principal amount of up to $30 million, or the Term Loan Facility.

On March 19, 2024, the Company prepaid

all of the remaining loan under the Term Loan Facility in a total of $10,428 thousands.

The prepayment included an end of term charge

of $983 thousands and accrued interest of $69 thousands.

Financial expenses, net

12 unchanged sentences

Interest expenses

Financial income, net

Finance income, net

R&D expenses, net (net of grants received

1 unchanged sentence

million for the year ended December 31, 2022.

The decrease of $6.5 million, or 29%, in the year ended December 31, 2022 compared to the

The increase of $0.5 million, or 3%, in the year ended December 31, 2023 compared to the

prior year, is primarily due to the following:

a decrease of $4.9 million in salaries and related expenses and stock-based compensation expenses due to a reduction in workforce, as a result of the Corporate Restructuring;

● a decrease of $1.0 million due

to delays in the development of BX005, the product candidate for the treatment of AD;

● a decrease of $1.2 million due

to the pause in the development of BX003, the product candidate for the treatment of IBD and PSC;

● a decrease of $1.8 million due

to the discontinuation in the development of BX001, the product candidate for the treatment of acne;

These were partially offset by a decrease in IIA grants of $2.6 million.

We recorded grants from the IIA totaling $1.1 million and $3.7 million for the years ended December 31, 2022 and December 31, 2021, respectively.

Amortization of intangible assets remained consistent

from 2021 to 2022.

General and administrative expenses were $9.5 million

for the year ended December 31, 2022, compared to $11.3 million for the year ended December 31, 2021.

The decrease of $1.8 million, or

16%, is primarily due to the following:

● a decrease of $0.9 million in

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

● a decrease of $0.5 million in

recruitment and employee related expenses due to the Corporate Restructuring;

an increase of $5.3 million primarily due to increased expenses related to conducting the clinical trial of our CF product candidate, BX004;

a decrease of $3.1 million in salaries and related expenses and stock-based compensation expenses mainly due to the workforce reduction resulting from the Corporate Restructuring ,as well as, the appreciation of the U.S.

dollar against the NIS, which led to reduced salaries and related expenses in our Israeli subsidiary;

a decrease of $0.9 million due to pausing in the development of BX005, the product candidate for the treatment of AD;

a decrease of $1.0 million due to increased consideration from research collaborations, which resulted in reduced expenses;

We recorded grants from the IIA totaling $1.1 million

for each of the years ended December 31, 2023 and December 31, 2022.

Amortization of intangible assets ended on December

31, 2022, as the intangible asset was fully amortized.

General and administrative expenses were $8.7

million for the year ended December 31, 2023, compared to $9.5 million for the year ended December 31, 2022.

The decrease of $0.8

million, or 8%, is primarily due to a decrease of $0.9 million in the Company’s directors’ and officers’ insurance

Interest expenses were $2.4 million for the year

ended December 31, 2023, compared to $2.1 million for the year ended December 31, 2022.

The increase of $0.3 million, or 14%, is due to

the increase of the U.S.

prime rate, which led to increased interest payments under the Hercules Loan Agreement.

Finance income, net was $1.2 million for the year

ended December 31, 2023, compared to $0.9 million for the year ended December 31, 2022.

The increase of $0.3 million, or 33% is primarily

due to rising interest rates, leading to an increase in interest income on our bank deposits.

Such increase was partly offset by a decrease

due to the appreciation of the U.S.

dollar against the NIS, which resulted in higher exchange rate expenses.

Other income was $0.4 million for the year

ended December 31, 2023, compared to $0.1 million for the year ended December 31, 2022.

The increase of $0.3 million, or 300%, is due

interest payments accrued under the Hercules Loan Agreement, entered into in August 2021, in addition to the increase of the U.S.

Financial income, net was $902,000 for the year

ended December 31, 2022, compared to $2,000 for the year ended December 31, 2021.

The increase of $900,000 is primarily due to appreciation

dollar against the NIS and due to the rising interest rates, which resulted in higher interest income.

Other income was $134,000 for the year ended

December 31, 2022.

The Company had no other income for the year ended December 31, 2021.

The increase of $134,000, or 100%, is due to

a sublease agreement for a portion of our office space in Ness Ziona, Israel entered into in August 2022 following our Corporate Restructuring.

to receipt of proceeds from a sublease agreement for a portion of our office space in Ness Ziona, Israel entered into in August 2022 following

our Corporate Restructuring.

Liquidity and Capital Resources

Sources of Liquidity

Since BiomX Ltd.’s inception in 2015, we

have not generated any revenue from sales of our products and have incurred significant operating losses and negative cash flows from

our operations.

We have funded our operations to date primarily with proceeds from the sale of our Common Stock, preferred shares and

warrants, venture debt, IIA grants and funds from collaboration agreements and through the Business Combination.

We have never generated any revenue from sales

of our products and have incurred significant operating losses and negative cash flows from our operations.

We have funded our operations

to date primarily with proceeds from the sale of our Common Stock, preferred shares and warrants, venture debt, IIA grants and funds from

collaboration agreements and through the business combination between Chardan Healthcare Acquisition Corp., a special purpose acquisition

company, and BiomX Ltd., pursuant to which Chardan Healthcare Acquisition Corp.

changed its name to BiomX Inc.

Through December 31, 2023,

we had received gross cash proceeds of approximately $154 million from sales of our Common Stock and preferred shares.

In August 2021,

we borrowed $15.0 million under the Hercules Loan Agreement.

In addition, in 2022 and 2021 we received approximately $1.9 million

and $3.2 million from our collaboration agreements and grants from the IIA, respectively.

In addition, we received approximately $1.9 million from our collaboration

agreements and grants from the IIA for each of the years ended December 31, 2023 and December 31, 2022.

Cash in excess of immediate requirements is invested

3 unchanged sentences

In addition, on December 4, 2020, we entered into

the Sale Agreement, with 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.

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

Through December 31, 2022, we sold an aggregate of 983,184 shares of Common Stock pursuant to the Sale Agreement for aggregate gross proceeds

of $5.7 million.

From January 1, 2023 through March 24, 2023, we did not sell any shares.

Subject to any limitations on aggregate amounts

as a result of the value of our Common Stock owned by non-affiliates that are imposed by SEC regulations, 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.

On August 16, 2021 we entered into the Hercules Loan

Agreement with Hercules, with respect to a venture debt facility.

Under the Hercules Loan Agreement, Hercules provided the Company with

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

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

obligated to make any sales of Common Stock under the Sale Agreement.

Through December 31, 2023, we sold an aggregate of 983,384 shares

of Common Stock pursuant to the Sale Agreement for aggregate gross proceeds of $5.8 million.

We terminated the Sale Agreement on December

On August 16, 2021 we entered into the Hercules

Loan Agreement with Hercules, with respect to a venture debt facility.

Under the Hercules Loan Agreement, Hercules provided the us with

access to a term loan with an aggregate principal amount of up to $30 million, available in three tranches, subject to certain terms and

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

occurrence of specified milestones and continuing through December 31, 2022, we could receive a loan in the aggregate principal amount

of up to $10 million.

However, such milestones for such tranche and for the extension of the period of interest only payments to September

1, 2023 did not occur by December 31, 2022 and have expired.

Additionally, upon the occurrence of specified milestones and continuing

through September 30, 2023, we might be entitled to borrow a loan in the aggregate principal amount of up to $5 million.

However, we do

not expect that such milestones will occur by September 30, 2023.

The Company is required to make interest only payments through

March 1, 2023, and is required to repay the principal balance and interest in monthly installments through September 1, 2025.

The first tranche of $15 million was advanced to us on the date the Hercules Loan Agreement was executed.

The milestones

for the second and third tranches were not reached and have expired.

and accordingly we never received additional amounts under the Hercules

Loan Agreement.

We were required to make interest-only payments through March 1, 2023, and we were required to repay the principal balance

and interest in monthly installments through September 1, 2025.

On March 19, 2024, we voluntarily prepaid the outstanding amount under

the Hercules Loan Agreement and such agreement expired.

On February 22, 2023, we entered into a securities

purchase agreement to issue and sell an aggregate of 30,608,163 shares of its common stock (or pre-funded warrants, and collectively,

the “Securities”) at a price of $0.245 per share or $0.244 per pre-funded warrant, through a private investment in public

equity, also referred to as PIPE, financing.

The gross proceeds from this offering are expected to be approximately $7.5 million, before

deducting issuance costs.

The financing is expected to close in two parts.

The first closing, which covers 5,975,918 Securities for gross

proceeds of $1.5 million, occurred on February 27, 2023.

The second closing for the remaining Securities, which is contingent upon approval

of the issuance of the additional Securities by our stockholders in accordance with NYSE American rules, is expected to take place in

the second quarter of 2023.

We believe that our existing cash resources will be

sufficient to meet our capital requirements and fund our operations for at least until the middle of 2024.

In the future, in addition

to the remaining funds under the PIPE, we will likely require or desire additional funds to support our operating expenses and capital

requirements or for other purposes, such as acquisitions, and may seek to raise such additional funds through public or private equity

or debt financings or collaborative agreements or from other sources, as we are doing now with the Sale Agreement and the Hercules Loan

If certain disruptions due to, for instance, the Russia–Ukraine military conflict, or the Israeli political instability

persists and deepens, we could experience an inability to access additional capital, which could in the future negatively affect our capacity

to support our operating expenses and capital requirements or to make investments for other purposes, such as acquisitions.

purchase agreement to issue and sell an aggregate of 15,997,448 shares of our Common Stock and 14,610,714 pre-funded warrants, or the

Pre-Funded Warrants, and collectively, the Securities, at a price of $0.245 per share and $0.244 per Pre-Funded Warrant, through a private

placement pursuant to an exemption from registration requirements under the Securities Act, or the February 2023 PIPE.

The gross proceeds

from the February 2023 PIPE were approximately $7.5 million, before deducting issuance costs.

The offering closed in two parts.

closing, which resulted in the issuance of 3,199,491 shares of Common Stock and 2,776,428 Pre-Funded Warrants for gross proceeds of $1.5

million, occurred on February 27, 2023.

Such Pre-Funded Warrants became exercisable on February 27, 2023, at an exercise price of $0.001

per share of Common Stock and have no expiration date.

At the first closing, we raised net proceeds of $1.3 million, after deducting issuance

costs of $0.2 million.

On April 24, 2023, our stockholders approved the issuance of up to 24,632,243 shares of Common Stock, including

shares underlying Pre-Funded Warrants, in accordance with NYSE American rules.

On May 4, 2023, we completed the second closing of the

February 2023 PIPE and issued an aggregate of 12,797,957 shares of Common Stock and 11,834,286 Pre-Funded Warrants.

Such Pre-Funded Warrants

became exercisable on May 4, 2023, at an exercise price of $0.001 per share of Common Stock and have no expiration date.

At the second

closing, we raised net proceeds of $5.9 million, after deducting issuance costs of $0.1 million.

As of December 31, 2023, no Pre-Funded

Warrants had been exercised.

On December 7, 2023, we filed a shelf registration

statement on Form S-3, which was declared effective by the SEC on January 2, 2024.

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

ATM Agreement, with 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 Wainwright.

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

From January 1, 2024 through March 26, 2024, we issued 75,179 shares of Common Stock pursuant to the ATM Agreement for aggregate

gross proceeds of $19 thousand.

On March 15, 2024, in connection with the Acquisition,

we consummated the March 2024 PIPE, pursuant to which we sold an aggregate of 216,417 shares of Convertible Preferred Stock and Private

Placement Warrants to purchase up to an aggregate of 108,208,500 shares of Common Stock for aggregate gross proceeds of approximately

Our financial statements contain an explanatory

paragraph regarding substantial doubt about our ability to continue as a going concern for at least one year until April 3, 2025.

future, we will likely require or desire additional funds to support our operating expenses and capital requirements or for other purposes,

such as acquisitions, and may seek to raise such additional funds through public or private equity or debt financings or collaborative

agreements or from other sources, as we are doing now with the ATM Agreement and as we did with the Hercules Loan Agreement.

disruptions due to, for instance, the Israel-Hamas War, or Israeli political instability persists and deepens, we could experience an

inability to access additional capital, which could in the future negatively affect our capacity to support our operating expenses and

capital requirements or to make investments for other purposes, such as acquisitions.

We have no other commitments to obtain additional

financing, other than with respect to the closing of the second part of the PIPE, and cannot assure you that additional financing will

be available at all or, if available, that such financing would be obtainable on terms favorable to us and would not be dilutive.

future liquidity and cash requirements will depend on numerous factors, including the introduction of new products as well as the ability

to continue to maintain controls over our operating expenditures.

financing and cannot assure you that additional financing will be available at all or, if available, that such financing would be obtainable

on terms favorable to us and would not be dilutive.

Our future liquidity and cash requirements will depend on numerous factors, including

the introduction of new products as well as the ability to continue to maintain controls over our operating expenditures.

The following table summarizes our cash flows for

11 unchanged sentences

Non-cash charges for the year ended December 31, 2023, mainly

consisted of stock-based compensation expenses of $1.5 million and depreciation and amortization of $2.5 million.

Net changes in our operating

assets and liabilities for the year ended December 31, 2022, consisted primarily of a decrease in trade account payables of $2.0 million

and a decrease in other account payables of $3.3 million, partially offset by a decrease in other current assets of $1.0 million.

consisted of stock-based compensation expenses of $1.0 million, depreciation and amortization of $0.9 million and amortization of debt

issuance costs of $0.6 million.

Net changes in our operating assets and liabilities for the year ended December 31, 2023, consisted primarily

of an increase in trade account payables of $0.6 million and an increase in other account payables of $1.2 million, partially offset by

a decrease in other current assets of $0.8 million.

During the year ended December 31, 2022, operating

2 unchanged sentences

Non-cash charges for the year ended December 31, 2022, mainly

consisted of stock-based compensation expenses of $3.2 million and depreciation and amortization of $2.6 million, partially offset by

revaluation of contingent liabilities expenses of $0.5 million.

Net changes in our operating assets and liabilities for the year ended

December 31, 2021 consisted primarily of an increase in trade account payables of $0.4 million, and an increase in other account payables

of $2.7 million.

consisted of stock-based compensation expenses of $1.5 million and depreciation and amortization of $2.5 million.

Net changes in our operating

assets and liabilities for the year ended December 31, 2022, consisted primarily of a decrease in trade account payables of $2.0 million

and a decrease in other account payables of $3.3 million, partially offset by a decrease in other current assets of $1.0 million.

Investing Activities

During the year ended December 31, 2022, investing

activities used in net cash of $2.1 million, mainly consisting of investment in short-term deposits of $13.5 million, partially offset

by proceeds from withdrawal of short-term deposits of $11.5 million.

During the year ended December 31, 2021, investing

activities provided net cash of $16.2 million, mainly consisting of proceeds from withdrawal of short-term deposits of $19.8 million,

partially offset by purchases of property and equipment of $3.7 million, primarily laboratory equipment and leasehold improvements.

We have invested, and plan to continue to invest, our

existing cash in short-term investments in accordance with our investment policy.

These investments may include money market funds and

investment securities consisting of U.S.

During the year ended December 31, 2023, investment

activities used in net cash of $2.0 million, proceeds from withdrawal of short-term deposits of $2.0 million.

During the year ended December 31, 2022, investing activities used in net cash of $2.1 million, mainly consisting of investment in short-term

deposits of $13.5 million, partially offset by proceeds from withdrawal of short-term deposits of $11.5 million.

We have invested, and plan to continue to invest,

our existing cash in short-term investments in accordance with our investment policy.

These investments may include money market funds

and investment securities consisting of U.S.

Treasury notes, and high quality, marketable debt instruments of corporations and government

6 unchanged sentences

As of December 31, 2023, we had outstanding foreign exchange contracts in the amount of approximately $4.1 million

with a fair value liability of $55,000.

with a fair value asset of $0.3 million.

As of December 31, 2022, we had outstanding foreign exchange contracts in the amount of approximately

$4.2 million, with a fair value asset of $62,000.

$4.5 million, with a fair value liability of $55,000.

Financing Activities

During the year ended December 31, 2023, financing

activities provided net cash of $0.3 million, mainly consisting of $0.3 million due to issuances of Common Stock under the Sale Agreement.

activities provided net cash of $3.0 million, mainly consisting of $7.2 million due to issuances of Common Stock under the February 2023

PIPE, net of issuance costs, partially offset by the repayment of long-term debt of $4.3 million under the Hercules Loan Agreement.

During the year ended December 31, 2022, financing

activities provided net cash of $37.3 million, consisting of $5.2 million due to issuance of Common Stock under the Sale Agreement, $17.7

million due to issuances of Common Stock under a registered direct offering, as described below, as well as investments by Maruho and

the CF Foundation, $14.2 million proceeds from long-term debt and related to the Hercules Loan Agreement and $0.1 million from exercise

of stock options.

activities provided net cash of $0.3 million, mainly consisting of $0.3 million due to issuances of Common Stock under the Sale Agreement.

Contractual Obligations, Commitments and Contingencies

4 unchanged sentences

we entered into a lease agreement for new office and laboratory space in Ness Ziona, Israel.

See note 8, “Leases” and note

12, “Long term Debt,” to our financial statements for further information.

In the normal

32 unchanged sentences

takes place in Israel and no technology funded with 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

royalties paid generally would not exceed 100% of the grants made to us, plus annual interest equal to the 12-month SOFR applicable to

dollar deposits, as published on the first business day of each calendar year.

33 unchanged sentences

and the balance of the principal and interest in respect of our commitments for future payments to the IIA totaled approximately $7.9

As part of funding our current and planned product development activities, we have submitted follow-up grant applications for

million, as compared to $6.6 million as of December 31, 2022.

As part of funding our current and planned product development activities,

we may submit follow-up grant applications for new grants.

We expect our expenses to remain substantially

2 unchanged sentences

● continue the development of our product candidates;

complete IND-enabling activities and prepare to initiate clinical trials for our product candidates;

initiate additional clinical trials and preclinical studies for product candidates in our pipeline;

seek to identify and develop or in-license or acquire additional product candidates and technologies;

seek regulatory approvals for our product candidates that successfully complete clinical trials, if any;

● complete IND-enabling activities and prepare to initiate

clinical trials for our product candidates;

● work to integrate the business of APT;

● initiate additional clinical trials and preclinical studies

for product candidates in our pipeline;

● seek to identify and develop or in-license or acquire additional

product candidates and technologies;

● seek regulatory approvals for our product candidates that

successfully complete clinical trials, if any;

establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we may obtain regulatory approval;

1 unchanged sentence

expand our infrastructure and facilities to accommodate our growing employee base, including adding equipment and physical infrastructure to support our research and development.

We believe that our existing cash and cash equivalents

will enable us to fund our operating expenses and capital expenditure requirements until at least the middle of 2024.

We have based these

estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

receive regulatory approval for our product candidates, we expect to incur significant commercialization expenses related to product manufacturing,

sales, marketing and distribution, depending on where we choose to commercialize.

Until such time, if ever, that we can generate product

revenue sufficient to achieve profitability, we expect to finance our cash needs through public or private sales of our equity, including

under the Sale Agreement or the second part of the PIPE, loans, including the second and/or third tranches under the Hercules Loan Agreement,

milestone payments, possibly additional grants from the IIA or other government or non-profit institutions and other outside funding sources.

Our ability to raise additional capital in the equity and debt markets is dependent on a number of factors including, but not limited

to, market volatility resulting from the COVID-19 pandemic, armed conflicts such as in Ukraine or other disruptions, market demand for

our securities, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that

we would be able to raise such additional capital at a price or on terms that are favorable to the Company.

To the extent that we

raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interests may be

materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect their rights

as a common stockholder.

Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting

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

If we raise additional funds through government and other third-party funding, collaboration agreements, strategic alliances, licensing

arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights to our technologies, future revenue

streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise

additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development

or future commercialization efforts or grant rights to develop and market products or product candidates that we would otherwise prefer

to develop and market by ourselves.

For more information regarding the risks related to our outlook, see “ Risk Factors —

Risks Related to Our Business, Technology and Industry.”

Our financial statements contain an explanatory

paragraph regarding substantial doubt about our ability to continue as a going concern for at least one year until April 3, 2025.

based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

If we receive regulatory approval for our product candidates, we expect to incur significant commercialization expenses related to product

manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.

Until such time, if ever, that we can generate

product revenue sufficient to achieve profitability, we expect to finance our cash needs through public or private sales of our equity,

including under the ATM Agreement, loans, milestone payments, possibly additional grants from the IIA or other government or non-profit

institutions and other outside funding sources.

Our ability to raise additional capital in the equity and debt markets is dependent on

a number of factors including, but not limited to, market volatility resulting from the, Israel-Hamas War, other armed conflicts such

as in Ukraine or other disruptions, and market demand for our securities, which itself is subject to a number of development and business

risks and uncertainties, as well as the uncertainty that we would be able to raise such additional capital at a price or on terms that

are favorable to the Company.

To the extent that we raise additional capital through the sale of equity or convertible debt securities,

our stockholders’ ownership interests may be materially diluted, and the terms of such securities could include liquidation or other

preferences that adversely affect their rights as a common stockholder.

Debt financing and preferred equity financing, if available, may

involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt,

making capital expenditures or declaring dividends.

If we raise additional funds through government and other third-party funding, collaboration

agreements, strategic alliances, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable

rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be

favorable to us.

If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay,

limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market products

or product candidates that we would otherwise prefer to develop and market by ourselves.

For more information regarding the risks related

to our outlook, see “ Risk Factors — Risks Related to Our Business, Technology and Industry.”

Foreign Exchange Contracts

4 unchanged sentences

$4.1 million and $4.5 million, respectively.

Critical Accounting Policies and Significant Judgments and Estimates

Critical Accounting Estimates

Our consolidated financial statements are prepared

27 unchanged sentences

and development expenses include fees paid to:

● vendors in connection with preclinical

development activities;

● CROs and investigative sites

in connection with preclinical and clinical trials;

● subcontractors in connection

with the manufacturing of materials for preclinical and clinical trials.

vendors in connection with preclinical development activities;

CROs and investigative sites in connection with preclinical and clinical trials;

subcontractors in connection with the manufacturing of materials for preclinical and clinical trials.

We measure the expense recognized based on our

43 unchanged sentences

on the yield from governmental zero-coupon bonds with an equivalent term.

The expected option term is calculated for options granted to

employees and directors using the “simplified” method.

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

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

The expected option term is calculated for all stock option

grants using the “simplified” method.

Changes in the determination of each of the inputs can affect the fair value of the

options granted and the results of our operations.

Intangible assets

10 unchanged sentences

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

As of December 31, 2022,

the intangible asset was fully amortized.

We review these intangible assets at least annually

for impairment, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Emerging Growth Company Status

We are an “emerging growth company,”

as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable

to other public companies that are not emerging growth companies.

We may take advantage of these exemptions until we are no longer an

emerging growth company.

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition

period afforded by the JOBS Act for the implementation of new or revised accounting standards.

We have irrevocably elected not to avail

ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates

on which adoption of such standards is required for other public companies.

We may take advantage of these exemptions up until the last

day of the fiscal year following the fifth anniversary of our first registration statement filed under the Securities Act, or such earlier

time that we are no longer an emerging growth company.

We would cease to be an emerging growth company if we have more than $1.235 billion

in annual revenue, we have more than $700.0 million in market value of our shares held by non-affiliates or we issue more than $1.0 billion

of non-convertible debt securities over a three-year period.

We shall cease to be an emerging growth company commencing on January 1,

During the year ended

on December 31, 2022 we recorded amortization expenses of $1.5 million.

As of December 31, 2022, the intangible asset was fully amortized.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis