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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-03-25 · 604 added, 602 removed, 48 unchanged (96% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial

statements and the notes thereto contained elsewhere in this Annual Report.

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 of various factors, including those described in the sections titled “Cautionary

Statement Regarding Forward-Looking Statements” and “Risk Factors” in this Annual Report.

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.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our

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

elsewhere in this Annual Report.

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 of various factors, including those described in the sections titled “Cautionary Statement Regarding Forward-Looking

Statements” and “Risk Factors” in this Annual Report.

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 DFI.

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 large-market diseases.

Since BiomX Ltd.’s inception in 2015, we

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any revenue from product sales.

As we advance our product candidates, we expect our expenses to remain significant.

To date, we have

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

If we continue to advance our product candidates, we expect our expenses to remain significant.

we have 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, 2025, we received gross proceeds of approximately $217.3 million from sales of our securities.

addition, as of December 31, 2024, we received $13.7 million from our collaboration agreements and grants from the IIA and MTEC.

addition, we have incurred significant operating losses.

Our ability to generate revenue from product sales sufficient to achieve profitability

will depend on the successful development of, the receipt of regulatory approval for, and eventual commercialization of one or more of

our product candidates.

Our net losses were approximately $17.7 million and $26.2 million for the years ended December 31, 2024 and 2023,

respectively.

As of December 31, 2024, we had an accumulated deficit of $180.7 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.

also incur expenses in connection with in-licensing or acquiring additional product candidates.

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.

of December 31, 2024, we had cash, cash equivalents and restricted cash of $18 million.

Our financial statements contain an explanatory

paragraph regarding substantial doubt about our ability to continue as a going concern, as we believe our cash and cash equivalents on

hand will be sufficient to meet our working capital and capital expenditure requirements only into the first quarter of 2026 as discussed

further below under “Liquidity and Capital Resources” .

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 916,497 shares of BiomX Common Stock, 40,470 Redeemable

Convertible Preferred Shares, convertible into 4,047,000 shares of BiomX Common Stock, and warrants, or the Merger Warrants, exercisable

for 216,650 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 are exercisable at any time after July 9, 2024 at an exercise price of $50.00 per share and

will expire on January 28, 2027.

with the consummation of the Acquisition, BiomX consummated 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 Redeemable Convertible

Preferred Shares, convertible into an aggregate of up to 21,641,700 shares of BiomX Common Stock, and (ii) Private Placement Warrants,

to purchase up to an aggregate of 10,820,850 shares of BiomX Common Stock, at a combined purchase price of $231.10 per share of Redeemable

Convertible Preferred Shares and an accompanying Private Placement Warrant to purchase 500 shares of BiomX Common Stock.

Placement Warrants are exercisable at any time after July 9, 2024, at an exercise price of $2.31 per share, and will expire on July 9,

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.

On July 9, 2024, the Company’s stockholders

approved a reverse stock split at a ratio within a range of 1-for-5 and 1-for-10 at such time as the Board shall determine,

in its sole discretion, at any time before July 9, 2025.

On August 8, 2024, the Board approved a 1-for-10 Reverse Stock Split of the Company’s

shares of Common Stock, or the Reverse Stock Split.

On August 20, 2024, the Company filed the Certificate of Amendment with the Delaware

Secretary of State to effect the Reverse Split, which became effective on August 26, 2024, or the Effective Date.

The Company’s

Common Stock began trading on a Reverse Stock Split-adjusted basis on the NYSE American at the open of the markets on the Effective Date.

Unless otherwise indicated, all issued and outstanding shares amounts in this Annual Report have been adjusted to reflect the Reverse

Stock Split for all periods presented.

Proportional adjustments also were made to shares underlying outstanding equity awards, warrants

and Redeemable Convertible Preferred Shares, and to the number of shares issued and issuable under the Company’s stock incentive

plans and certain existing agreements.

of Our Consolidated Results of Operations

date, we have not generated any revenue from product sales and do not expect to generate any revenue from product sales in the near future.

If development efforts for our product candidates are successful and result in any necessary regulatory approvals or otherwise lead to

any commercialized products or additional license agreements with third parties, we may generate revenue in the future from product sales

or payments from collaboration or license agreements with third parties.

and Development Expenses, net

and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates.

We expense research and development costs as incurred, offset by the IIA and MTEC grants and, to a lesser degree, income from research

and development collaboration agreements.

In addition, as of December 31, 2025, we received $14.7 million from our collaboration agreements and grants from the IIA and MTEC.

In addition, we have incurred significant operating

Our ability to generate revenue from product sales sufficient to achieve profitability will depend on the successful development

of, the receipt of regulatory approval for, and eventual commercialization of one or more of our product candidates.

Our net losses were

approximately $36.2 million and $17.7 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, we

had an accumulated deficit of $216.9 million.

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.

As of December 31, 2025, we had cash, cash equivalents

and restricted cash of $5.0 million.

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

to continue as a going concern, as we believe our cash and cash equivalents on hand will be sufficient to meet our working capital and

capital expenditure requirements only through the end of the second quarter of 2026 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

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 48,237 shares of BiomX Common Stock, 40,470 Redeemable Convertible Preferred Shares, convertible into

213,000 shares of BiomX Common Stock, and warrants, or the Merger Warrants, exercisable for 11,403 shares of BiomX Common Stock.

the consummation of the Acquisition, a successor-in-interest of APT became a wholly-owned subsidiary of BiomX.

The Merger Warrants are

exercisable at any time after July 9, 2024 at an exercise price of $950.00 per share and will expire on January 28, 2027.

On August 26, 2024, we effected a 1-for-10 reverse

stock split, and on November 25, 2025, we effected a 1-for-19 reverse stock split.

Unless otherwise indicated, all share and per share

amounts in this Annual Report have been retroactively adjusted to reflect these reverse stock splits, including proportional adjustments

to equity awards, warrants and Redeemable Convertible Preferred Shares, and to the number of shares issued and issuable under the Company’s

stock incentive plans and certain existing agreements.

In December 2025, we discontinued the development

of BX004 following an internal analysis and feedback from the DMC, which recommended consideration of alternative dosing regimens or treatment

strategies in response to adverse events experienced by certain participants;

however, pursuing such alternatives was beyond the Company’s

available resource.

Additionally, we implemented cost-cutting measures including a significant reduction in workforce while reviewing

other strategic alternatives.

In December 2025, following the discontinuation

of development of BX004, our Israeli subsidiary, BiomX Ltd., commenced insolvency proceedings in Israel.

Prior to the commencement of

these insolvency proceedings, BiomX Ltd.

served as the core operational subsidiary of the Company, employing a significant portion of

our workforce.

As a result of BiomX Ltd.’s insolvency, our business has been materially impacted, and without additional resources, we

have limited ongoing operations and limited ability to advance our programs as previously planned.

Accordingly, we are actively evaluating

and pursuing strategic alternatives and other business opportunities to exploit the expertise of our management staff, based on time,

available resources and market conditions.

On December 26, 2025, we entered into the 2025

Second SPA with the Investor Pursuant to the 2025 Second SPA, we agreed to issue and sell, in a private placement transaction, an aggregate

of 3,300 shares of our newly created Series Y Convertible Preferred Stock, as defined below, with an aggregate stated value of $3.3 million,

and warrants to purchase up to 3,300,000 shares of the Company’s common stock, for aggregate gross proceeds of $3.0 million.

Series Y Convertible Preferred Stock has a stated value of $1,000 and is convertible into Common Stock at an initial conversion price

of $2.00 per share (i.e., 1,650,000 shares of Common Stock), subject to adjustments.

Accordingly, subject to receipt of approval of the

stockholders of the Company, the Investor is expected to beneficially own the majority of the shares of common stock of the Company and

will have control over the Company.

Therefore, if the stockholders approval is obtained, the Investor is expected to cause the Company

to change its business, strategy and objectives.

Components of Our Consolidated Results of Operations

To date, we have not generated any revenue from

product sales and do not expect to generate any revenue from product sales in the near future.

If development efforts for our product

candidates are successful and result in any necessary regulatory approvals or otherwise lead to any commercialized products or additional

license agreements with third parties, we may generate revenue in the future from product sales or payments from collaboration or license

agreements with third parties.

Operating Expenses

Research and Development Expenses, net

Research and development expenses consist primarily

of costs incurred in connection with the discovery and development of our product candidates.

We expense research and development costs

as incurred, offset by the IIA and MTEC grants and, to a lesser degree, income from research and development collaboration agreements.

These expenses include:

development and operation of our proprietary platform;

expenses incurred in connection with the preclinical

and clinical development of our product candidates, including under agreements with third parties, such as CROs and contract manufacturing

organizations, as well as consultants, subcontractors and key opinion leaders providing scientific development services;

manufacturing scale-up expenses and the cost of acquiring

and manufacturing preclinical and clinical trial materials;

license maintenance fees and milestone fees incurred

in connection with various license agreements;

employee-related expenses, including salaries, related

benefits, travel and stock-based compensation expenses for employees engaged in research and development functions, as well as external

costs, such as fees paid to outside consultants engaged in such activities;

costs related to compliance with regulatory requirements

and legal fees relating to patent matters;

expenses incurred in connection with the preclinical and clinical development of our product candidates, including under agreements with third parties, such as CROs and contract manufacturing organizations, as well as consultants, subcontractors and key opinion leaders providing scientific development services;

manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials;

license maintenance fees and milestone fees incurred in connection with various license agreements;

employee-related expenses, including salaries, related benefits, travel and stock-based compensation expenses for employees engaged in research and development functions, as well as external costs, such as fees paid to outside consultants engaged in such activities;

costs related to compliance with regulatory requirements and legal fees relating to patent matters;

depreciation and other expenses.

recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided

to us by our service providers.

do not allocate employee costs or facility expenses, including depreciation or other indirect costs, to specific programs because these

costs are deployed across multiple programs and, as such, are not separately classified.

We use internal resources primarily to oversee

the research and discovery as well as for managing our preclinical development, process development, manufacturing and clinical development

These employees work across multiple programs and, therefore, we do not track their costs by program.

table below summarizes our research and development expenses incurred by program:

We recognize external development costs based on

an evaluation of the progress to completion of specific tasks using information provided to us by our service providers.

We do not allocate employee costs or facility expenses,

including depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as

such, are not separately classified.

We use internal resources primarily to oversee the research and discovery as well as for managing

our preclinical development, process development, manufacturing and clinical development activities.

These employees work across multiple

programs and, therefore, we do not track their costs by program.

The table below summarizes our research and development

expenses incurred by program:

USD In thousands

Salaries and related benefits (including stock-based

compensation)

Salaries and related benefits (including stock-based compensation)

Rent and related expenses

Infrastructure & other unallocated or R&D

Less grants from the IIA and MTEC and consideration

from collaboration agreements

Infrastructure & other unallocated or R&D expenses

Less grants from the IIA and MTEC and consideration from collaboration agreements

Total research and development expenses, net

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 stages of clinical development, primarily due to the increased size and duration of later-stage

clinical trials.

Our research and development expenses reflect, among other things, programs that were discontinued or put on hold as

well as new development programs.

As a result, we expect that our research and development expenses will increase substantially over

the next several years, particularly as we increase personnel costs, including stock-based compensation, contractor costs and facilities

costs, as we continue to advance the development of our product candidates.

We also may incur additional expenses related to milestone

and royalty payments payable to third parties with whom we have entered into license agreements to acquire the rights to our product

and Administrative Expenses

and administrative expenses consist primarily of salaries, related benefits and stock-based compensation expenses for personnel in executive,

finance, corporate, business development and administrative functions.

General and administrative expenses also include legal fees relating

to corporate and securities matters;

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

stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials.

Our research and development

expenses reflect, among other things, programs that were discontinued or put on hold as well as new development programs.

General and Administrative Expenses

General and administrative expenses consist primarily

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

and administrative functions.

General and administrative expenses also include legal fees relating to corporate and securities matters;

professional fees for accounting, tax and audit services;

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travel expenses;

facility-related expenses, including rent, as well as operating related costs.

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.

of Goodwill, Intangible Asset and long-lived assets

and Intangible Asset

connection with our acquisition of APT, we allocated a portion of the purchase price to goodwill and in-process research and development

(“IPR&D”) intangible asset.

During the third and fourth quarters of 2024, we experienced a decline in our stock price

resulting in market capitalization being less than our stockholders’ equity, which we concluded as an impairment indicator.

a result, we performed a quantitative assessment for goodwill and IPR&D impairment and recognized an impairment charge of $0.8 million

and $3.2 million, respectively.

December 2024, we decided to cease the use of the property in Gaithersburg, Maryland and made it available for sublease.

we performed an impairment assessment of the right-of-use asset and related leasehold improvements and recognized an impairment charge

of $4.0 million.

Other income consists of a reversion of the contract

liability associated with the AD program which has been paused and proceeds from sub-leasing a portion of our office space in Ness Ziona,

Israel, which sub-lease ended in September 2024.

Interest expense consists of interest incurred

under a Loan and Security Agreement with Hercules Capital, Inc., or the Hercules Loan Agreement.

Under the Hercules Loan Agreement, Hercules

Capital, Inc., or 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, we prepaid all of the remaining loan balance under the Term Loan Facility in a total amount

of $10.4 million.

The prepayment included an end of term charge of $983 thousand and accrued interest of $69 thousand.

from change in fair value of Private Placement Warrants

from change in fair value of Private Placement Warrants reflects the revaluation that resulted from the accounting of the Private Placement

Warrants issued under the March 2024 PIPE.

expenses, net

expenses, net consist primarily of income or expenses related to revaluation of foreign currencies and interest income on our bank deposits

and money market funds.

of Operations

of the Years Ended December 31, 2024 and 2023

following table summarizes our consolidated results of operations for the years ended December 31, 2024 and 2023:

and facility-related expenses, including rent,

depreciation, as well as operating related costs.

We 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.

Impairment of Goodwill, Intangible

Asset and Other long-lived asset

Goodwill and Intangible Asset

In connection with our acquisition of APT, we

allocated a portion of the purchase price to goodwill and in-process research and development or, IPR&D intangible asset.

During the fourth quarter of 2025, the Company’s

stock price declined significantly, in part following the Company’s announcement regarding the discontinuation of the CF Phase 2b

clinical trial due to adverse events and the filing of the application to commence insolvency proceedings for BiomX Ltd.

The discontinuation

of the CF trial raised concerns that extended beyond the CF program itself, as the adverse events observed may have broader implications

for the Company’s platform technology and pipeline programs.

As a result, the Company performed an impairment assessment of its IPR&D

acquired in the APT acquisition.

Based on this assessment, we recognized an impairment charge of $11.

8 million for the year ended December

During the third and fourth quarters of 2024,

we experienced a decline in our stock price resulting in market capitalization being less than our stockholders’ equity, which we

concluded as an impairment indicator.

As a result, we performed a quantitative assessment for goodwill and IPR&D impairment and recognized

an impairment charge of $0.8 million and $3.2 million, respectively, for the year ended December 31, 2024.

Other long-lived asset impairment

On December 16, 2025, BiomX Ltd.

filed an application

for the commencement of legal insolvency proceedings.

As a result, BiomX Ltd.

sold all of its property and equipment subsequent to the

balance sheet date.

Accordingly, we recorded an impairment of $0.5 million for the year ended December 31, 2025, to reflect the sale proceeds.

On December 31, 2025, APT signed an amendment

to terminate its lease agreement in Gaithersburg, Maryland.

In addition, APT intends to dispose of all of its property and equipment.

Based on purchase offers received for its equipment, we determined that the expected sale proceeds are negligible and wrote down the full

carrying amount of the assets in amount of $1.2 million for the year ended December 31, 2025.

In December 2024, we decided to cease the use

of the property in Gaithersburg, Maryland and made it available for sublease.

As a result, we performed an impairment assessment of the

right-of-use asset and related leasehold improvements and recognized an impairment charge of $4.0 million.

Gain from early lease termination

Following the termination of the lease

agreement pursuant to an amendment executed by APT, the Company was required to settle the termination consideration.

In accordance

with the termination provisions of the agreement, the Company was required to pay the landlord $0.8 million, and the landlord was

entitled to apply a lease security deposit in the amount of an additional $0.15 million.

As a result of the early termination of the

lease, we recognized a gain from early termination in the amount of $2.9 million.

Other expenses (income)

Other expenses (income) primarily consist of a

capital loss from the sale of fixed assets, a reversal of the contract liability related to the AD program that was paused in 2024, and

proceeds from the subleasing of a portion of our office space in Ness Ziona, Israel, which sublease ended in September 2024.

Interest expenses

Interest expense mainly related to interest on

the existing loan to APT from the U.S.

Small Business Administration and interest incurred under a Loan and Security Agreement with Hercules

Capital, Inc., or the Hercules Loan Agreement.

On March 19, 2024, we prepaid all of the remaining loan balance under the Hercules Loan

Agreement in a total amount of $10.4 million.

Income from change in fair value of warrants

Income from change in fair value of warrants reflects

the revaluation that resulted from the accounting of the warrants issued under the March 2024 PIPE and the warrants issued under the February

2025 Financing.

Financial expenses, net

Financial expenses, net consist primarily of interest

income on our bank deposits and money market funds and transaction costs incurred in connection with the February 2025 Financing and the

March 2024 PIPE.

Results of Operations

Comparison of the Years Ended December 31,

2025 and 2024

The following table summarizes our consolidated

results of operations for the years ended December 31, 2025 and 2024:

USD in thousands

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General and administrative expenses

Gain from early lease termination

Goodwill impairment

IPR&D impairment

Long-lived assets impairment

Other long-lived asset impairment

Operating loss

Other expense (income)

Interest expenses

Finance expense (income), net

Income from change in fair value of Private

Placement Warrants

R&D expenses,

net (net of grants received from the IIA and MTEC, and consideration from research collaborations) were $24.7 million for the year ended

December 31, 2024, compared to $16.7 million for the year ended December 31, 2023.

The increase of $8.0 million, or 48%, in the year

ended December 31, 2024 compared to the prior year, is primarily due to the following:

an increase of $1.6 million primarily reflects expenses

related to preparations for Phase 2b in the clinical trial of our CF product candidate, BX004;

an increase of $2.2 million in expenses relating to

the clinical trial of our DFO product candidate, BX211;

increased expenses of $1.9 million and $3.0 million

relating to the combined workforce and rent expenses, respectively, following the Acquisition, respectively.

recorded $2.6 million of MTEC grants and no IIA grants for the year ended December 31, 2024,

compared to $1.1 million of IIA grants and $1.3 million of consideration from research collaborations for the year ended December 31,

and administrative expenses were $11.8 million for the year ended December 31, 2024, compared to $8.7 million for the year ended December

The $3.1 million increase, or 36%, is primarily driven by Acquisition-related expenses, including $0.9 million in issuance

costs and $0.4 million in legal fees associated with both the Acquisition and the March 2024 PIPE.

Additionally, the increase reflects

higher salary and share-based compensation expenses of $0.9 million related to the combined workforce, as well as $0.3 million in rent

expenses following the Acquisition.

impairment was $0.8 million for the year ended December 31, 2024, following an impairment of the Company’s goodwill resulted from

the Acquisition.

We had no goodwill impairment in the year ended December 31, 2023.

impairment was $3.2 million for the year ended December 31, 2024, following our quantitative assessment for IPR&D impairment.

had no IPR&D impairment in the year ended December 31, 2023.

assets impairment was $4.0 million for the year ended December 31, 2024, after evaluating the right-of-use asset and related leasehold

improvements following our decision to cease the use of the property in Gaithersburg, Maryland and make it available for sublease.

had no long-lived assets impairment in the year ended December 31, 2023.

Other income was $2.1 million for the year ended

December 31, 2024, compared to $0.4 million for the year ended December 31, 2023.

The increase of $1.7 million, or 425%, is primarily

due to the reversion of the contract liability associated with the Company’s AD program which has been suspended.

Interest expenses were $0.9 million for the year

Finance expense, net

Income from change in fair value of warrants

R&D expenses, net (net of grants received

from the IIA and MTEC, and consideration from research collaborations) were $21.3 million for the year ended December 31, 2025, compared

to $24.7 million for the year ended December 31, 2024.

The decrease of $3.4 million, or 14%, in the year ended December 31, 2025 compared

to the prior year, is primarily due to the following:

a decrease of $2.7 million in salaries and related expenses due to workforce

a decrease of $1.8 million in rent expenses primarily due to the accounting

treatment of the right-of-use asset impairment recognized in 2024, which resulted in reduced expenses in 2025.

The decrease was partially offset by an increase

of $0.8 million associated with the initiation of the Phase 2b clinical trial for our CF product candidate, BX004, as well as by an increase

of $0.8 million in depreciation expenses attributable to the accelerated depreciation of leasehold improvements resulting from the remeasurement

of lease liability of our office lease agreement in Ness Ziona, Israel and the termination of APT’s lease agreement.

we recorded $1.6 million of MTEC grants and $0.4 million of IIA grants for the year ended December 31, 2025, compared to $2.6 million

of MTEC grants for the year ended December 31, 2024.

General and administrative expenses were $9.6 million

for the year ended December 31, 2025, compared to $11.8 million for the year ended December 31, 2024.

The $2.2 million decrease, or 19%,

is primarily driven by Acquisition-related expenses of $0.9 million and $0.4 million of legal fees associated with both the Acquisition

and the March 2024 PIPE, as well as a decrease of $0.2 in other professional service fees.

Additionally, we had a decrease of $0.5 million

in salaries and related expenses due to workforce reduction and a $0.2 million decrease in premium for the Company’s directors’

and officers’ insurance policy.

Gain from early lease termination was $2.9 million,

following the derecognition of the related right-of-use asset and lease liability, and the total consideration paid, as a result of APT’s

lease termination.

Goodwill impairment in the 2024 period was $0.8

million, following an impairment of the Company’s goodwill that resulted from the Acquisition.

The Company’s market capitalization

as of September 30, 2024, was lower in comparison to its stockholders’ equity and triggered an impairment assessment that concluded

that the entire goodwill should be impaired.

IPR&D impairment was $11.8 million for the

year ended December 31, 2025, compared to $3.2 million for the year ended December 31, 2024, following our quantitative assessment for

IPR&D impairment.

Other long-lived asset impairment was $1.7 million

for the year ended December 31, 2025, compared to $4.0 million for the year ended December 31, 2024.

The decrease of $2.3 million, or

58%, reflects impairment charges at BiomX Israel and APT.

At BiomX Israel, impairment was recorded in connection with the commencement

of insolvency proceedings and the subsequent sale of all property and equipment, based on sale proceeds.

At APT, impairment was recorded

after determining that expected sale proceeds for its equipment are negligible.

Other expense was $0.1 million for the year ended

December 31, 2025, compared to other income of $2.1 million for the year ended December 31, 2024.

The decrease of $2.2 million, or 105%,

is primarily due to the reversion of the contract liability associated with the Company’s AD program which has been suspended in

Interest expenses were $20,000 for the year ended

December 31, 2025, compared to $873,000 for the year ended December 31, 2024.

The decrease of $853,000, or 98%, is due to repayment of

the loan under the Hercules Loan Agreement in March 2024.

Interest in the 2025 period was related to an existing loan to APT from the

Small Business Administration.

Finance expense, net was $0.7 million for the year

ended December 31, 2025, compared to $0.9 million for the year ended December 31, 2024.

The decrease of $1.5 million, or 63%, is due to

the full repayment of the loan under the Hercules Loan Agreement.

expense, net was $0.9 million for the year ended December 31, 2024, compared to finance income of $1.2 million for the year ended December

The increased expenses of $2.1 million, or 175% resulted mainly from the Private Placement Warrants transaction costs under

the March 2024 PIPE.

from change in fair value of Private Placement Warrants reflects the revaluation that resulted from the accounting of the Private Placement

Warrants issued under the March 2024 PIPE.

and Capital Resources

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 and MTEC grants and funds from collaboration

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

The decrease of $0.2 million, or 22%, was primarily

attributable to lower transaction costs incurred in connection with the February 2025 financing, as compared to the March 2024 PIPE financing,

partially offset by lower interest income in the current period.

Income from change in fair value of warrants was

$6.1 million for the year ended December 31, 2025, compared to $26.5 million for the year ended December 31, 2024.

The decrease of $20.4

million, or 77%, is primarily attributed to the revaluation resulting from the accounting treatment of the Company’s warrants that

are classified as a liability, as well as to the issuance of warrants in the February 2025 Financing.

Liquidity and Capital Resources

Sources of Liquidity

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 and MTEC grants and

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

acquisition company, and BiomX Ltd.

(the “Business Combination”), pursuant to which Chardan Healthcare Acquisition Corp.

changed its name to BiomX

Through December 31, 2024, we had received gross cash proceeds of approximately $204 million from sales of our Common Stock and preferred

shares and $13.7 million from our collaboration agreements and grants from the IIA and MTEC.

in excess of immediate requirements is invested primarily with a view to liquidity and capital preservation.

December 2020, we entered into 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.

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

Through December 31, 2023, we sold

an aggregate of 98,339 shares of Common Stock pursuant to the Sale Agreement for aggregate gross proceeds of $5.8 million.

We terminated

the Sale Agreement on December 7, 2023.

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 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 conditions.

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.

19, 2024, we voluntarily prepaid the outstanding amount under the Hercules Loan Agreement and such agreement expired.

February 22, 2023, we entered into a securities purchase agreement to issue and sell an aggregate of 1,599,746 shares of our Common Stock

and 1,461,072 pre-funded warrants, or the February 2023 Pre-Funded Warrants, and collectively, the February 2023 Securities, at a price

of $2.45 per share and $2.44 per Pre-Funded Warrant, through a private placement pursuant to an exemption from registration requirements

under the Securities Act, or the February 2023 PIPE, for net proceeds of approximately $7.2 million, after deducting issuance costs of

$0.3 million.

As of December 31, 2024, 533,031 February 2023 Pre Funded Warrants were exercised into 533,031 shares of Common Stock for

a total consideration of $6 thousand at an exercise price of $0.01 per share of Common Stock, and 928,041 February 2023 Pre-Funded Warrants

were exercised into 925,607 shares of Common Stock through cashless mechanism with no consideration.

As of December 31, 2024, there are

no outstanding February 2023 Pre-Funded Warrants.

December 2023, pursuant to a shelf registration statement on Form S-3 declared effective by the SEC on January 2, 2024, or the Effective

S-3, we entered into 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 Wainwright.

its name to BiomX Inc.

Through December 31, 2025, we had received gross cash proceeds of approximately $217.3 million from sales of our

Common Stock and preferred shares and $14.7 million from our collaboration agreements and grants from the IIA and MTEC.

Cash in excess of immediate requirements is invested

primarily with a view to liquidity and capital preservation.

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 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 conditions.

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

On March 19, 2024, we

voluntarily prepaid the outstanding amount under the Hercules Loan Agreement and such agreement expired.

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 an At the Market Offering

Agreement, or the 2023 ATM Agreement, with H.C.

Wainwright & Co., LLC, or Wainwright, 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 2023 ATM Agreement.

On February 24,

2025, we suspended the ATM Agreement and the related continuous offering by us under the Effective S-3.

We may resume use of the ATM

Agreement in the future.

In February and May, 2023, subsequent to the approval of the Company’s stockholders, we completed the

closing of the February 2023 PIPE, as defined below, with $7.5 million in gross proceeds.

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, with each Convertible

Preferred Stock being convertible into 100 shares of our shares of Common Stock, after giving effect to the Reverse Split, and warrants,

or Private Placement Warrants, to purchase up to an aggregate of 10,820,850 shares of the Company’s Common Stock, for aggregate

gross proceeds of approximately $50 million.

On February 25, 2025, we entered into a Securities Purchase Agreement with certain investors,

or the February 2025 SPA, pursuant to which we agreed to issue and sell, (i) in a registered direct offering, or the February 2025 Registered

Direct Offering:

(a) an aggregate of 2,828,283 shares of our Common Stock, and (b) pre-funded warrants, or the February 2025 Pre-Funded

Warrants, to purchase up to an aggregate of 805,231 shares of Common Stock, or the February 2025 Pre-Funded Warrant Shares, and (ii)

in a concurrent private placement, or the February 2025 PIPE, (a) unregistered pre-funded warrants, or the February 2025 Private Pre-Funded

Warrants, to purchase up to an aggregate of 2,305,869 shares of Common Stock, or the February 2025 Private Pre-Funded Warrant Shares,

and (b) unregistered warrants, or the February 2025 Common Warrants, and together with the February 2025 Private Pre-Funded Warrants,

the February 2025 Private Warrants, to purchase up to an aggregate of 5,939,383 shares of Common Stock, or the February 2025 Common Warrant

Shares, and together with the February 2025 Private Pre-Funded Warrant Shares, the February 2025 Private Warrant Shares.

Each share of

Common Stock (or February 2025 Pre-Funded Warrant in lieu thereof) and each February 2025 Private Pre-Funded Warrant is sold with an

accompanying February 2025 Common Warrant.

The combined effective purchase price of each share of Common Stock (or February 2025 Pre-Funded

Warrant in lieu thereof) and accompanying February 2025 Common Warrant, and of each February 2025 Private Pre-Funded Warrant and accompanying

February 2025 Common Warrant, is $0.9306.

The gross proceeds to the Company from the February 2025 Registered Direct Offering and the

February 2025 PIPE were $5.5 million, before deducting placement agent fees and other offering expenses payable by the Company.

on February 25, 2025, we also entered into inducement letter agreements, or the Inducement Letter Agreements, with certain holders, or

the Holders, of certain of their existing warrants to purchase an aggregate of 6,955,528 shares of Common Stock, originally issued to

the Holders on March 15, 2024, having an original exercise price of $2.311 per share (after giving effect to the Reverse Split), or the

Existing Warrants.

The shares of Common Stock issued upon the exercise of the Existing Warrants are registered pursuant to the Effective

Pursuant to the Inducement Letter Agreements, the Holders agreed to exercise for cash the Existing Warrants at a reduced exercise

price of $0.9306 per share, or the February 2025 Warrant Exercise, in consideration of our agreement to issue new unregistered warrants,

or the New Warrants, to purchase up to an aggregate of 6,955,528 shares of Common Stock at an exercise price of $0.9306 per share, or

the New Warrant Shares.

In connection with the February 2025 Warrant Exercise, we agreed that, in the event that any February 2025 Warrant

Exercise would otherwise require the Company to issue a number of shares of Common Stock in excess of the number of shares of Common

Stock that the Holder may acquire without exceeding the beneficial ownership limitations, or the Beneficial Ownership Limitation, set

forth in the Existing Warrants (or, if applicable and at the Holder’s election, 9.99%) (such excess shares, the Excess Existing

Warrant Shares), (i) the Company shall issue to the Holder the maximum number of Existing Warrant Shares that the Holder is entitled

to receive without exceeding the Beneficial Ownership Limitation, as directed by the Holder, and (ii) in lieu of issuing any Excess Existing

Warrant Shares, (x) the Existing Warrant shall automatically be amended and restated in its entirety as set in the Letter Agreement,

or, following such amendment, the Amended and Restated Warrant.

The gross proceeds to the Company from the February 2025 Warrant Exercise

were $6.5 million prior to deducting placement agent fees and offering expenses.

We refer to the February 2025 Warrant Exercise, February

2025 Registered Direct Offering and the February 2025 PIPE, as the February 2025 Financing.

We are subject to restrictions pursuant to the

February 2025 Financing, including certain standstill periods preventing us from issuing any Common Stock or Common Stock equivalents

or filing any registration statement or any amendment or supplement to any existing registration statement until 30 days after the later

of (i) the date that the resale registration statement related to the February 2025 Financing is declared effective by the SEC and (ii)

the date of the stockholder approval required in connection with the February 2025 Financing.

We also agreed, subject to certain exceptions,

not to effect or agree to effect any variable rate transaction until 90 days after the later of (i) the date that the resale registration

Statement is declared effective by the SEC and (ii) the stockholder approval.

Following such restrictions and subject to applicable securities

law limits, 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, the March 2024 PIPE and the February 2025 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.

financial statements contain an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern as

we believe that our current funds will be sufficient to meet our working capital and capital expenditure requirements only into the first

quarter of 2026.

In the 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 did with the ATM Agreement and the Hercules Loan Agreement.

If certain disruptions

due to, for instance, Israel’s War with Hamas and Hezbollah, 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.

have no other commitments to obtain additional 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.

following table summarizes our cash flows for each of the periods presented:

On February 24, 2025, we suspended the ATM Agreement

and the related continuous offering by us under an effective registration Statement on Form S-3.

On August 13, 2025, we filed a prospectus

supplement to amend our prior prospectus dated January 2, 2024, and as previously supplemented on February 24, 2025.

The prospectus supplement

updated the maximum aggregate amount of securities we may offer and sell under the 2023 ATM Agreement.

Under the prospectus supplement,

we may issue and sell shares of Common Stock having an aggregate offering price of up to $1.7 million from time to time through Wainwright.

During the year ended December 31, 2025, we sold 121,773 shares of Common Stock under the 2023 ATM Agreement, at an average price of $11.13

per share, raising aggregate net proceeds of approximately $1.3 million, after deducting an aggregate commission of $51.

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 Convertible Preferred Stock, par value $0.0019 per share, with each Series X Convertible Preferred Stock being convertible into 6 shares

of our shares of Common Stock, after giving effect to the Reverse Split, and warrants, or Private Placement Warrants, to purchase up to

an aggregate of 569,519 shares of the Company’s Common Stock, for aggregate gross proceeds of approximately $50 million.

On February 25, 2025, we entered into a Securities

Purchase Agreement with certain investors, or the February 2025 SPA, pursuant to which we agreed to issue and sell, (i) in a registered

direct offering, or the February 2025 Registered Direct Offering:

(a) an aggregate of 148,857 shares of our Common Stock, and (b) pre-funded

warrants, or the February 2025 Pre-Funded Warrants, to purchase up to an aggregate of 42,381 shares of Common Stock, or the February 2025

Pre-Funded Warrant Shares, and (ii) in a concurrent private placement, or the February 2025 PIPE, (a) unregistered pre-funded warrants,

or the February 2025 Private Pre-Funded Warrants, to purchase up to an aggregate of 121,362 shares of Common Stock, or the February 2025

Private Pre-Funded Warrant Shares, and (b) unregistered warrants, or the February 2025 Common Warrants, and together with the February

2025 Private Pre-Funded Warrants, the February 2025 Private Warrants, to purchase up to an aggregate of 312,599 shares of Common Stock,

or the February 2025 Common Warrant Shares, and together with the February 2025 Private Pre-Funded Warrant Shares, the February 2025 Private

Warrant Shares.

Each share of Common Stock (or February 2025 Pre-Funded Warrant in lieu thereof) and each February 2025 Private Pre-Funded

Warrant is sold with an accompanying February 2025 Common Warrant.

The combined effective purchase price of each share of Common Stock

(or February 2025 Pre-Funded Warrant in lieu thereof) and accompanying February 2025 Common Warrant, and of each February 2025 Private

Pre-Funded Warrant and accompanying February 2025 Common Warrant, is $17.68.

The gross proceeds to the Company from the February 2025

Registered Direct Offering and the February 2025 PIPE were $5.5 million, before deducting placement agent fees and other offering expenses

payable by the Company.

In addition, on February 25, 2025, we also entered into inducement letter agreements, or the Inducement Letter

Agreements, with certain holders, or the Holders, of certain of their existing warrants to purchase an aggregate of 366,087 shares of

Common Stock, originally issued to the Holders on March 15, 2024, having an original exercise price of $43.91 per share (after giving

effect to the Reverse Split), or the Existing Warrants.

The shares of Common Stock issued upon the exercise of the Existing Warrants are

registered pursuant to the Effective S-3.

Pursuant to the Inducement Letter Agreements, the Holders agreed to exercise for cash the Existing

Warrants at a reduced exercise price of $17.68 per share, or the February 2025 Warrant Exercise, in consideration of our agreement to

issue new unregistered warrants, or the New Warrants, to purchase up to an aggregate of 366,087 shares of Common Stock at an exercise

price of $17.68 per share, or the New Warrant Shares.

In connection with the February 2025 Warrant Exercise, we agreed that, in the event

that any February 2025 Warrant Exercise would otherwise require the Company to issue a number of shares of Common Stock in excess of the

number of shares of Common Stock that the Holder may acquire without exceeding the beneficial ownership limitations, or the Beneficial

Ownership Limitation, set forth in the Existing Warrants (or, if applicable and at the Holder’s election, 9.99%) (such excess shares,

the Excess Existing Warrant Shares), (i) the Company shall issue to the Holder the maximum number of Existing Warrant Shares that the

Holder is entitled to receive without exceeding the Beneficial Ownership Limitation, as directed by the Holder, and (ii) in lieu of issuing

any Excess Existing Warrant Shares, (x) the Existing Warrant shall automatically be amended and restated in its entirety as set in the

Letter Agreement, or, following such amendment, the Amended and Restated Warrant.

The gross proceeds to the Company from the February

2025 Warrant Exercise were $6.5 million prior to deducting placement agent fees and offering expenses.

We refer to the February 2025 Warrant

Exercise, February 2025 Registered Direct Offering and the February 2025 PIPE, as the February 2025 Financing.

On December 26, 2025, we entered into the 2025

Second SPA with the Investor, pursuant to which the Company agreed to issue and sell, in a private placement transaction, an aggregate

of 3,300 shares of the Company’s newly created Series Y Convertible Preferred Stock, with an aggregate stated value of $3.3 million,

and warrants to purchase up to 3,300,000 shares of the Company’s Common Stock, for aggregate gross proceeds to the Company of $3.0

million, before deducting placement agent fees and other offering expenses.

Each share of Series Y Preferred Stock has a stated value

of $1,000 and will be convertible into shares of Common Stock at a conversion price of $2.00 per share, subject to customary adjustments.

Holders of Series Y Convertible Preferred Stock will be entitled to receive dividends on the stated value at a rate of 15% per annum,

compounded quarterly, payable in arrears, which dividends may, at the Investor’s sole election, be paid in cash or shares of Common

The Series Y Convertible Preferred Stock does not have voting rights (except as otherwise required by law or as expressly provided

in the certificate of designations), and each share will have a maturity of one year from the closing date.

Conversion is subject to beneficial

ownership limitations of 19.99% of the Company’s outstanding Common Stock.

Pursuant to the 2025 Second SPA, the Company also agreed

to issue to the Investor warrants to purchase up to an aggregate number of shares of Common Stock equal to 200% of the number of shares

of Common Stock issuable upon conversion of the Series Y Preferred Stock, or the “2025 Second SPA Warrants”, i.e., 3,300,000

shares of Common Stock.

The 2025 Second SPA Warrants will be exercisable immediately upon issuance, subject to certain limitations and

will have an initial exercise price of $2.00 and will expire five years from the date of issuance.

Our financial statements contain an explanatory

paragraph regarding substantial doubt about our ability to continue as a going concern as we believe that our current funds, including

the funds received from the 2025 Second SPA, will be sufficient to meet our working capital and capital expenditure requirements only

through the end of the second quarter of 2026.

In the 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 did with the ATM Agreement and the Hercules

Loan Agreement.

Our ability to secure such additional funds is contingent upon obtaining the stockholder approval required pursuant

to the 2025 Second SPA.

Failure to obtain such approval would severely constrain our financing options, potentially forcing us to cease

our operations, and would increase the substantial doubt about our ability to continue as a going concern.

We have no other commitments to obtain additional

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

each of the periods presented:

USD In thousands

2 unchanged sentences

Net cash provided by financing activities

Effect of exchange rate

changes on cash and cash equivalents and restricted cash

Net increase (decrease)

in cash and cash equivalents

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

Net increase (decrease) in cash and cash equivalents

Operating Activities

During the year ended December 31, 2025, operating

activities used $26.4 million of net cash, primarily due to a net loss of $36.2 million adjusted by non-cash charges of $9.8 million.

Non-cash charges mainly consisted of $6.1 million related to income from change in fair value of the warrants and $2.9 million gain from

early lease termination.

These were partially offset by non-cash expenses including stock-based compensation of $2.1 million, depreciation

of $2.9 million, and impairment charges of $11.8 million related to the IPR&D asset and $1.7 million related to other long-lived assets.

Net changes in our operating assets and liabilities consisted primarily of a decrease in net change in operating leases of $0.1 million

and in other account payables of $3.4 million, partially offset by a decrease in other current assets of $2.2 million and in trade account

payables of $1.2 million.

During the year ended December 31, 2024, operating

activities used $37.0 million of net cash, primarily due to a net loss of $17.7 million adjusted by non-cash charges of 16.3 million

and a net change of $3.0 million in our operating assets and liabilities.

6 unchanged sentences

operating leases of $0.3 million.

the year ended December 31, 2023, operating activities used $21.3 million of net cash, primarily due to a net loss of $26.2 million and

by net cash used by changes in our operating assets and liabilities of $2.5 million and non-cash charges of $2.4 million.

Non-cash charges

for the year ended December 31, 2023, mainly 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.

the year ended December 31, 2024, investment activities provided net cash of $0.7 million, mainly consisting of cash and restricted cash

acquired from the Acquisition.

the year ended December 31, 2023, investment activities provided net cash of $2.0 million, proceeds from withdrawal of short-term

deposits of $2.0 million.

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 sponsored enterprises.

We use foreign exchange contracts (mainly option and forward contracts)

to hedge balance sheet items from currency exposure.

These foreign exchange contracts are not designated as hedging instruments for accounting

In connection with these foreign exchange contracts, we recognize gains or losses that offset the revaluation of the balance

sheet items also recorded under financial expenses (income), net.

As of December 31, 2024, we had outstanding foreign exchange contracts

in the amount of approximately $2.4 million with a fair value asset of $19 thousand.

As of December 31, 2023, we had outstanding foreign

exchange contracts in the amount of approximately $4.1 million with a fair value asset of $0.3 million.

the year ended December 31, 2024, financing activities provided net cash of $38.4 million, mainly consisting of the issuance of Convertible

Preferred Shares and the Private Placement Warrants in the March 2024 PIPE in the amount of $20.4 million, net of issuance costs, and

$28.7 million, respectively.

This was partially offset by the prepayment of the long-term debt in the amount of $10.7 million under the

Hercules Loan Agreement.

the year ended December 31, 2023, financing 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.

Obligations, Commitments and Contingencies

contractual obligations and commitments relate primarily to our operating leases and non-cancelable purchase obligations under agreements

with various research and development organizations and suppliers in the ordinary course of business.

August 2019, we entered into a lease agreement for office and lab spaces in Gaithersburg, Maryland and in

Investing Activities

During the year ended December 31, 2025, investment

activities provided net cash of $0.1 million, mainly consisting of proceeds from the sale of property and equipment.

During the year ended December 31, 2024, investment

activities provided net cash of $0.7 million, mainly consisting of cash and restricted cash acquired from the Acquisition.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis