HLSQ 10-Q
Tessera Defense & Homeland Security Inc. (HLSQ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarter ended
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including
area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Units, each consisting of one share of common stock, $0.0001 par value, and one Warrant entitling the holder to receive one half share of common stock | PHGE.U | NYSE American | ||
| Warrants, each exercisable for one-half of a share of common stock, $0.0001 par value, at an exercise price of $11.50 per share | PHGE.WS | NYSE American |
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 5, 2022,
BIOMX INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2022
TABLE OF CONTENTS
i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This quarterly report on Form 10-Q, or the Quarterly Report, includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and other securities laws. The statements contained herein that are not purely historical, are forward-looking statements. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. For example, we are making forward-looking statements when we discuss operations, cash flows, financial position, business strategy and plans, market growth, our clinical and pre-clinical development program, including timing and milestones thereof as well as the design thereof, including acceptance of regulatory agencies of such design, the potential opportunities for and benefits of the BacteriOphage Lead to Treatment, or BOLT, platform, the potential of our product candidates, the potential effect of the coronavirus disease 2019, or COVID-19, on our business and levels of expenses, sufficiency of financial resources and financial needs and impacts of changes in our management on our business. However, you should understand that these statements are not guarantees of performance or results, and there are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others:
| ● | the ability to generate revenues, and raise sufficient financing to meet working capital requirements; |
| ● | the unpredictable timing and cost associated with our approach to developing product candidates using phage technology; |
| ● | political and economic instability, including, without limitation, due to natural disasters or other catastrophic events, such as the Russian invasion of Ukraine and world sanctions on Russia, Belarus, and related parties, terrorist attacks, hurricanes, fire, floods, pollution and earthquakes; |
| ● | obtaining U.S. Food and Drug Administration, or FDA, acceptance of any non-U.S. clinical trials of product candidates; |
| ● | the ability to pursue and effectively develop new product opportunities and acquisitions and to obtain value from such product opportunities and acquisitions; |
| ● | penalties and market withdrawal associated with any unanticipated problems with product candidates and failure to comply with labeling and other restrictions; |
| ● | expenses associated with compliance with ongoing regulatory obligations and successful continuing regulatory review; |
| ● | market acceptance of our product candidates and ability to identify or discover additional product candidates; |
| ● | our ability to obtain high titers for specific phage cocktails necessary for preclinical and clinical testing; |
| ● | the availability of specialty raw materials and global supply chain challenges; |
| ● | the ability of our product candidates to demonstrate requisite, safety and efficacy for drug products, or safety, purity and potency for biologics without causing adverse effects; |
| ● | the success of expected future advanced clinical trials of our product candidates; |
| ● | our ability to obtain required regulatory approvals; |
| ● | our ability to enroll patients in clinical trials and achieve anticipated development milestones when expected; |
| ● | delays in developing manufacturing processes for our product candidates; |
| ● | the continued impact of COVID-19 on general economic conditions, our operations, the continuity of our business, including our preclinical and clinical trials and our ability to raise additional capital; |
ii
| ● | competition from similar technologies, products that are more effective, safer or more affordable than our product candidates or products that obtain marketing approval before our product candidates; |
| ● | the impact of unfavorable pricing regulations, third-party reimbursement practices or health care reform initiatives on our ability to sell product candidates or therapies profitably; |
| ● | protection of our intellectual property rights and compliance with the terms and conditions of current and future licenses with third parties; |
| ● | infringement on the intellectual property rights of third parties and claims for remuneration or royalties for assigned service invention rights; |
| ● | our ability to acquire, in-license or use proprietary rights held by third parties necessary to our product candidates or future development candidates; |
| ● | ethical, legal and social concerns about synthetic biology and genetic engineering that may adversely affect market acceptance of our product candidates; |
| ● | reliance on third-party collaborators; |
| ● | our ability to attract and retain key employees or to enforce the terms of noncompetition agreements with employees; |
| ● | the failure to comply with applicable laws and regulations other than drug manufacturing compliance; |
| ● | potential security breaches, including cybersecurity incidents; |
| ● | receipt of the second and / or third tranches under the Term Loan Facility, as such term is defined below, or the second tranche under our agreement with the Cystic Fibrosis Foundation; |
| ● | political, economic and military instability in the State of Israel; and |
| ● | other factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, or, the 2021 Annual Report. |
For a detailed discussion of these and other risks, uncertainties and factors, see Part I, Item 1A “Risk Factors” of our 2021 Annual Report and in Part II, Item 1A of this Quarterly Report. All forward-looking statements contained in this Quarterly Report speak only as of the date hereof. Except as required by law, we are under no duty to (and expressly disclaim any such obligation to) update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report. Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, and should be viewed only as historical data.
iii
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
1
BIOMX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(USD in thousands, except share and per share data)
(unaudited)
| As of | ||||||||||||
| Note | March 31, 2022 | December 31, 2021 | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | ||||||||||||
| Restricted cash | ||||||||||||
| Short-term deposits | ||||||||||||
| Other current assets | ||||||||||||
| Total current assets | ||||||||||||
| Property and equipment, net | ||||||||||||
| Intangible assets, net | ||||||||||||
| Operating lease right-of-use assets | ||||||||||||
| Total non-current assets | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-1
BIOMX INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(USD in thousands, except share and per share data)
(unaudited)
| As of | ||||||||||||
| Note | March 31, 2022 | December 31, 2021 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Trade account payables | ||||||||||||
| Other account payables | ||||||||||||
| Contract liability | ||||||||||||
| Current portion of operating lease liabilities | ||||||||||||
| Current portion of long-term debt | 4 | - | ||||||||||
| Total current liabilities | ||||||||||||
| Non-current liabilities | ||||||||||||
| Long-term debt, net of current portion | 4 | |||||||||||
| Operating lease liabilities, net of current portion | ||||||||||||
| Other liabilities | ||||||||||||
| Total non-current liabilities | ||||||||||||
| Commitments and Collaborations | 3 | |||||||||||
| Stockholders’ equity | 5 | |||||||||||
| Preferred Stock, $ | ||||||||||||
| Common Stock, $ | ||||||||||||
| Additional paid in capital | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
| Total stockholders’ equity | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
BIOMX INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(USD in thousands, except share and per share data)
(unaudited)
| Three Months Ended March 31, | ||||||||||||
| Note | 2022 | 2021 | ||||||||||
| Research and development (“R&D”) expenses, net | ||||||||||||
| Amortization of intangible assets | ||||||||||||
| General and administrative expenses | ||||||||||||
| Operating loss | ||||||||||||
| Interest expenses | ||||||||||||
| Finance income, net | ( | ) | ( | ) | ||||||||
| Loss before tax | ||||||||||||
| Tax expenses | ||||||||||||
| Net loss | ||||||||||||
| Basic and diluted loss per share of Common Stock | 6 | |||||||||||
| Weighted average number of shares of Common Stock outstanding, basic and diluted | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
BIOMX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(USD in thousands, except share and per share data)
(unaudited)
| Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance as of January 1, 2022 | ( | ) | ||||||||||||||||||
| Issuance of Common Stock under Open Market Sales Agreement, net of $1 issuance costs** | ||||||||||||||||||||
| Stock-based compensation expenses | - | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2022 | ( | ) | ||||||||||||||||||
| (*) | Less than $1. |
| (**) | See Note 5A. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
BIOMX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(USD in thousands, except share and per share data)
(unaudited)
| Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance as of January 1, 2021 | ( | ) | ||||||||||||||||||
| Exercise of stock options | ||||||||||||||||||||
| Exercise of warrant | ||||||||||||||||||||
| Issuance of Common Stock under Open Market Sales Agreement, net of $134 issuance costs | ||||||||||||||||||||
| Stock-based compensation expenses | - | - | - | |||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of March 31, 2021 | ( | ) | ||||||||||||||||||
| (*) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
BIOMX INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(USD in thousands, except share and per share data)
(unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS – OPERATING ACTIVITIES | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments required to reconcile cash flows used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Amortization of debt issuance costs | ||||||||
| Finance expense, net | ||||||||
| Changes in other liabilities | - | ( | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Other current assets | ||||||||
| Trade account payables | ( | ) | ||||||
| Other account payables | ( | ) | ||||||
| Net change in operating leases | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS – INVESTING ACTIVITIES | ||||||||
| Investment in short-term deposits | ( | ) | ( | ) | ||||
| Proceeds from short-term deposits | - | |||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| CASH FLOWS – FINANCING ACTIVITIES | ||||||||
| Issuance of Common Stock under Open Market Sales Agreement, net of issuance costs | ||||||||
| Exercise of stock options | - | |||||||
| Net cash provided by financing activities | ||||||||
| Increase (decrease) in cash and cash equivalents and restricted cash | ( | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash and cash equivalents and restricted cash at the beginning of the period | ||||||||
| Cash and cash equivalents and restricted cash at the end of the period | ||||||||
| Reconciliation of amounts on consolidated balance sheets | ||||||||
| Cash and cash equivalents | ||||||||
| Restricted cash | ||||||||
| Total cash and cash equivalents and restricted cash | ||||||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid for interest | - | |||||||
| Taxes paid | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-6
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 1 – GENERAL
| General information |
BiomX Inc., (individually, and together with its subsidiaries, BiomX Ltd. and RondinX Ltd., the “Company” or “BiomX”) was incorporated as a blank check company on November 1, 2017, under the laws of the state of Delaware, for the purpose of entering into a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.
On July 16, 2019, the Company entered into a merger agreement with BiomX Ltd. (“BiomX Israel”), a company incorporated under the laws of Israel, CHAC Merger Sub Ltd. (“Merger Sub”) and Shareholder Representative Services LLC, as amended on October 11, 2019, pursuant to which, among other things, BiomX Israel merged with Merger Sub, with BiomX Israel being the surviving entity in accordance with the Israeli Companies Law, 5759-1999, as a wholly owned direct subsidiary of BiomX Inc.
On October 28, 2019, the Company consummated
the acquisition of
Following the Recapitalization Transaction,
the Company retained $
The Company’s shares of Common Stock, units, and warrants are traded on the NYSE American under the symbols PHGE, PHGE.U, and PHGE.WS, respectively.
On February 6, 2020, the Company’s Common Stock also began trading on the Tel-Aviv Stock Exchange.
BiomX is developing both natural and engineered phage cocktails designed to target and destroy harmful bacteria in chronic diseases, such as cystic fibrosis, atopic dermatitis, inflammatory bowel disease and colorectal cancer. BiomX discovers and validates proprietary bacterial targets and customizes phage compositions against these targets. The Company’s headquarters are located in Ness Ziona, Israel.
To date, the Company has not generated revenue from its operations. Based on the Company’s current cash and commitments, management believes that the Company’s current cash and cash equivalents are sufficient to fund its operations for more than 12 months from the date of issuance of these condensed consolidated financial statements and sufficient to fund its operations necessary to continue development activities.
Consistent with its continuing research and development activities, the Company expects to continue to incur additional losses for the foreseeable future. The Company plans to continue to fund its current operations, as well as other development activities relating to additional product candidates, through future issuances of debt and/or equity securities, loans and possibly additional grants from the Israel Innovation Authority (“IIA”) and other government institutions. The Company’s ability to raise additional capital in the equity and debt markets is dependent on a number of factors including, but not limited to, the market demand for the Company’s Common Stock, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are favorable to it.
F-7
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
| A. | Unaudited Condensed Financial Statements |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for condensed financial information. They do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included (consisting only of normal recurring adjustments except as otherwise discussed).
The financial information contained in this report should be read in conjunction with the annual financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, that the Company filed with the U.S. Securities and Exchange Committee (the “SEC”) on March 30, 2022. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2021, but not all disclosures required by GAAP are included.
| B. | Principles of Consolidation |
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated upon consolidation.
| C. | Use of Estimates in the Preparation of Financial Statements |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities in the financial statements and the amounts of expenses during the reported years. Actual results could differ from those estimates.
The full extent to which the COVID-19 pandemic may directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international markets. The Company examined the impact of COVID-19 on its financial statements, and although there is currently no major impact, there may be changes to those estimates in future periods. Actual results may differ from these estimates.
| D. | Reclassification |
Certain prior year amounts have been reclassified to conform to the current year presentation.
| E. | Recent Accounting Standards |
In May 2021, the Financial Accountings Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). The guidance became effective for the Company on January 1, 2022. The Company adopted the guidance on January 1, 2022, and has concluded the adoption did not have a material impact on its unaudited condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses,” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU No. 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. This guidance is effective for the Company beginning on January 1, 2023, with early adoption permitted. The Company does not expect that the adoption of this standard will have a significant impact on its condensed consolidated financial statements and related disclosures.
F-8
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Cont.)
In August 2020, the FASB issued ASU 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40)-Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Effective January 1, 2022, the Company early adopted ASU 2020-06 using the modified retrospective approach which resulted in no effect.
In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, “Revenue from Contracts with Customers” (“ASC 606”). The guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The guidance should be applied prospectively to acquisitions occurring on or after the effective date. The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.
In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832),” which requires annual disclosures that increase the transparency of transactions involving government grants, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2021. The Company expects that this guidance will not have a significant impact on the Company’s consolidated financial statements.
| F. | Fair Value of Financial Instruments |
The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data.
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
There were no changes in the fair value hierarchy levelling during the period ended March 31, 2022 and year ended December 31, 2021.
The following table summarizes the fair value of our financial assets and liabilities that were accounted for at fair value on a recurring basis, by level within the fair value hierarchy:
F-9
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (Cont.)
| March 31, 2022 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
| Assets: | ||||||||||||||||
| Cash equivalents: | ||||||||||||||||
| Money market funds | ||||||||||||||||
| Foreign exchange contracts receivable | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Contingent consideration | ||||||||||||||||
| December 31, 2021 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
| Assets: | ||||||||||||||||
| Cash equivalents: | ||||||||||||||||
| Money market funds | ||||||||||||||||
| Foreign exchange contracts receivable | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Contingent consideration | ||||||||||||||||
Financial instruments with carrying values approximating fair value include cash and cash equivalents, restricted cash, short-term deposits, other current assets, trade accounts payable and other account payables, due to their short-term nature.
The Company determined the fair value of the liabilities
for the contingent consideration based on a probability discounted cash flow analysis. This fair value measurement is based on significant
unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent
consideration is based on several factors, such as: the attainment of future clinical, developmental, regulatory, commercial and strategic
milestones relating to product candidates for treatment of primary sclerosing cholangitis. The discount rate applied ranged from
The Company uses foreign exchange contracts
(mainly option and forward contracts) to hedge cash flows from currency exposure. These foreign exchange contracts are not designated
as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, the Company recognizes gains or losses
that offset the revaluation of the cash flows also recorded under financial expenses (income), net in the condensed consolidated statements
of operations. As of March 31, 2022, the Company had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount
of approximately $
F-10
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD and NIS in thousands, except share and per share data)
(unaudited)
NOTE 3 – COMMITMENTS AND COLLABORATIONS
| In March 2021, the IIA approved
In August 2021, the IIA approved an application for an aggregate budget of NIS
In March 2022, the IIA approved an application
for a total budget of NIS 13,004 (approximately $
According to the agreement with the IIA, excluding the August 2021 program, BiomX Israel will pay royalties of
Through March 31, 2022, total grants approved from the IIA aggregated to approximately $
The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced in July 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021. Even though the IIA has not declared the alternative benchmark rate to replace the LIBOR, the Company does not except it will have significant impact on its financial statements. |
F-11
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 4 – LONG-TERM DEBT
On August 16, 2021,
The Company may prepay advances under
the Loan Agreement, in whole or in part, at any time subject to a prepayment charge equal to:
Interest on the term loan accrues at a
per annum rate equal to the greater of
As of March 31, 2022, the carrying value
of the term loan consists of $
Interest expense relating to the term
loan, which is included in interest expense in the condensed statements of operations was $
Under the terms of the Loan Agreement,
the Company granted first priority liens and security interests in substantially all of the Company’s intellectual property as collateral
for the obligations thereunder. The Company also granted Hercules the right, at their discretion, to participate in any closing of any
single subsequent broadly marketed financing as defined up to a maximum aggregate amount of $
Future principal payments for the long-term debt are as follows:
| March 31, 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| Total principal payments | ||||
| Unamortized discount and debt issuance costs | ( | ) | ||
| Long-term debt | ||||
F-12
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 5 – STOCKHOLDERS EQUITY
| A. | Share Capital: |
At-the-market Sales Agreement:
In December 2020,
Maruho Agreement:
In October 2021, the Company entered
into a Stock Purchase Agreement with a subsidiary of Maruho Co. Ltd., (“Maruho”), a leading dermatology-focused pharmaceutical
company in Japan, pursuant to which the Company issued to Maruho
CFF Agreement:
In December 2021,
F-13
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 5 – STOCKHOLDERS EQUITY (Cont.)
| A. | Share Capital: (Cont.) |
Preferred Stock:
The Company is authorized to issue
Warrants:
As of March 31, 2022, the Company had the following outstanding warrants to purchase Common Stock issued to stockholders:
| Warrant | Issuance Date | Expiration Date | Exercise Price Per Share | Number of Shares of Common Stock Underlying Warrants | ||||||||
| Private Placement Warrants | ||||||||||||
| Public Warrants | ||||||||||||
| 2021 Registered Direct Offering Warrants | ||||||||||||
| B. | Stock-based Compensation: |
On March 29, 2022, the Board of Directors
approved the grant of
F-14
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 5 – STOCKHOLDERS EQUITY (Cont.)
| B. | Stock-based Compensation: (Cont.) |
The fair value of each option was estimated as of the date of grant or reporting period using the Black-Scholes option-pricing model, using the following assumptions:
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Underlying value of Common Stock ($) | ||||||||
| Exercise price ($) | ||||||||
| Expected volatility (%) | ||||||||
| Expected terms of the option (years) | ||||||||
| Risk-free interest rate (%) | ||||||||
The cost of the benefit embodied in the
options granted during the three months ended March 31, 2022, based on their fair value as at the grant date, is estimated to be approximately
$
| (1) | A summary of options granted to purchase the Company’s Common Stock under the Company’s share option plans is as follows: |
| For the Three Months Ended March 31, 2022 | ||||||||||||
| Number of Options | Weighted Average Exercise Price | Aggregate Intrinsic Value | ||||||||||
| Outstanding at the beginning of period | $ | $ | | |||||||||
| Granted | $ | |||||||||||
| Forfeited | ( | ) | $ | |||||||||
| Exercised | - | $ | - | |||||||||
| Outstanding at the end of period | $ | | $ | |||||||||
| Exercisable at the end of period | ||||||||||||
| Weighted average remaining contractual life of outstanding options – years as of March 31, 2022 | ||||||||||||
F-15
BIOMX INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 5 – STOCKHOLDERS EQUITY (Cont.)
| B. | Stock-based Compensation: (Cont.) |
Warrants:
As of March 31, 2022, the Company had the following outstanding compensation related warrants to purchase Common Stock:
| Warrant | Issuance Date | Expiration Date | Exercise Price Per Share | Number of Shares of Common Stock Underlying Warrants | ||||||||||
| Private Warrants issued to scientific founders (see below) | | |||||||||||||
| In November 2017, BiomX Israel issued |
| (2) | The following table sets forth the total stock-based payment expenses resulting from options granted, included in the statements of operations: |
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Research and development expenses, net | ||||||||
| General and administrative | ||||||||
NOTE 6 – BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is computed on
the basis of the net loss for the period divided by the weighted average number of shares of Common Stock outstanding during the period.
Diluted loss per share is based upon the weighted average number of shares of Common Stock and of potential shares of Common Stock outstanding
when dilutive. Potential shares of Common Stock equivalents include outstanding stock options and warrants, which are included under the
treasury stock method when dilutive.
F-16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this Quarterly Report to “the Company”, “BiomX”, “we”, “us” or “our”, mean BiomX Inc. and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
General
We are a clinical company developing products using both natural and engineered phage technologies designed to target and destroy bacteria that affect the appearance of skin, as well as harmful bacteria in chronic diseases, such as Cystic Fibrosis, or CF, Atopic Dermatitis, or AD, inflammatory bowel disease, or IBD, primary sclerosing cholangitis, or PSC, and colorectal cancer, or CRC. Bacteriophage or phage are viruses that target bacteria and are considered inert to mammalian cells. By developing proprietary combinations of naturally occurring phage and by creating novel phage using synthetic biology, we develop phage-based therapies intended to address large-market and orphan diseases.
Since inception in 2015, we have devoted substantially all our resources to organizing and staffing the company, raising capital, acquiring rights to or discovering product candidates, developing our technology platforms, securing related intellectual property rights, and conducting discovery, research and development activities for our product candidates. We do not have any products approved for sale, our products are still in the preclinical and clinical development stages, and we have not generated any revenue from product sales. As we move our product candidates from preclinical to clinical stage and continue with clinical trials, we expect our expenses to increase.
Our phage-based product candidates are developed utilizing our proprietary research and development platform named BOLT. The BOLT platform is unique, employing cutting edge methodologies and capabilities across disciplines including computational biology, microbiology, synthetic engineering of phage and their production bacterial hosts, bioanalytical assay development, manufacturing and formulation, to allow agile and efficient development of natural or engineered phage combinations, or cocktails.
BOLT is designed to allow rapid phage cocktails. The BOLT cocktail targets a broad patient population and may be comprised of naturally-occurring or synthetically engineered phage. The cocktail contains phage with complementary features and is further optimized for multiple characteristics such as broad target host range, ability to prevent resistance, biofilm penetration, stability and ease of manufacturing. Development of the optimized phage cocktail is anticipated to require 1-2 years.
On November 15, 2021, we announced that we plan to focus on CF and AD programs in 2022 and to temporarily pause the development efforts in IBD and CRC for approximately one year, as neither program was expected to yield proof-of-concept data in patients over the next twelve months.
Clinical and Pre-Clinical Developments
Cystic Fibrosis
On March 31, 2021, we announced the selection of the phage cocktail for BX004, our therapeutic phage product candidate under development for chronic respiratory infections caused by Pseudomonas aeruginosa, or P. aeruginosa, a main contributor to morbidity and mortality in patients with CF. Based on recommendations from the Cystic Fibrosis Therapeutic Development Network, we updated our Phase 2 proof-of-concept study design and timelines to a Phase 1b/2a trial in CF patients with chronic respiratory infections caused by P. aeruginosa. The Phase 1b/2a trial will be comprised of two parts. Part 1 will evaluate the safety, pharmacokinetics and microbiologic/clinical activity of BX004 in eight CF patients in a single ascending dose and multiple ascending dose design. Results from Part 1 are expected in the third quarter of 2022. Part 2 of the Phase 1b/2a trial will evaluate the safety and efficacy of BX004 in 24 CF patients randomized to a treatment or placebo cohort in a 2:1 ratio. Results from Part 2 are expected by the first quarter of 2023. In September 2021, BX004 was cleared by the FDA to initiate the Phase 1b/2a trial in CF patients with chronic respiratory infections caused by P. aeruginosa.
2
Atopic Dermatitis
On March 31, 2021, we announced the selection of the phage cocktail for BX005, our topical phage product candidate targeting Staphylococcus aureus, or S. aureus, a bacterium associated with the development and exacerbation of inflammation in atopic dermatitis. By reducing S. aureus burden, BX005 is designed to shift the skin microbiome composition to its “pre-flare” state to potentially result in clinical improvement. Results from a Phase 2 proof-of-concept trial evaluating the safety and efficacy of BX005 in atopic dermatitis patients are expected in the fourth quarter of 2022. On April 8, 2022, the FDA approved the Company’s IND application for BX005.
Inflammatory Bowel Disease and Primary Sclerosing Cholangitis
On November 12, 2020, we announced consolidation of our IBD and PSC programs into a single broad host range product candidate, named BX003, under development for both indications. Prior to November 2020, we had two separate phage product candidates for IBD and for PSC, with our IBD product candidate named BX002 and PSC product candidate named BX003. After the consolidation, the current BX003 product candidate is now under development to treat both IBD and PSC, targeting bacterial strains of Klebsiella pneumoniae, or K. pneumoniae, a potential pathogen implicated in both diseases. Prior to the consolidation, our Phase 1a clinical study was conducted only on BX002, and future clinical studies are planned to be conducted on BX003 for both IBD and PSC.
On February 2, 2021, we announced positive results of a randomized, single-blind, multiple-dose, placebo-controlled Phase 1a pharmacokinetic study of BX002, our product candidate for IBD and PSC, conducted under an investigational new drug, or IND, application submitted to the FDA. The study evaluated the safety and tolerability of orally administered BX002 in 18 healthy volunteers. Subjects were randomized to receive orally either BX002 or placebo, twice daily for three days. Subjects were monitored for safety for seven days in a clinical unit, with follow-up monitoring for safety assessments conducted at 14 and 28 days after completion of dosing. BX002 was demonstrated to be safe and well-tolerated, with no serious adverse events and no adverse events leading to discontinuation. In addition, the study met its objective of delivering high concentrations of viable phage to the gastrointestinal tract of approximately 1010 PFU, or plaque forming units. This equals approximately 1,000 times more viable phage compared to the bacterial burden of K. pneumoniae in IBD and PSC patients as measured in stool.
Colorectal Cancer
For our CRC program, we are exploring phage mediated delivery of therapeutic payloads to Fusobacterium nucleatum bacteria residing in the tumors of patients with colorectal cancer.
For more information regarding our product candidates, see Part I, Item 1 “Business” of our 2021 Annual Report.
COVID-19
In response to the pandemic, we have implemented the mandatory as well as recommended measures to safeguard the health and safety of our employees and clinical trial participants, and the continuity of our business operations. These measures currently include social distancing in our offices, a work from home policy for all employees who are able to perform their duties remotely, and we expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of our employees, clinical trial participants and others in light of COVID-19. As of May 5, 2022, COVID-19 has not had a material impact on our results of operations. However, uncertainty remains as to the potential impact of COVID-19 on our future research and development activities and the potential for a material impact on the Company increases the longer the virus impacts certain aspects of economic activity around the world. The full extent to which COVID-19 will directly or indirectly impact our business, results of operations and financial condition, including our ability to fulfill our clinical trial enrollment needs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international markets, the ultimate geographic spread of the disease, the duration of the pandemic, travel restrictions and social distancing in the United States and other countries, business closures or business disruptions, the ultimate impact on financial markets and the global economy, the effectiveness of vaccines and vaccine distribution efforts and the effectiveness of other actions taken in the United States and other countries to contain and treat the disease. During the first quarter of 2022, we updated our guidance on the timing of certain clinical milestones resulting from challenges we continue to face in clinical trial enrollment due to COVID-19. It is not currently possible to predict how long the pandemic will last, what the long-term global effects will be, or the time that it will take for economic activity to return to pre-pandemic levels, and we do not yet know the full impact on our business and operations. We will continue to monitor COVID-19 closely and follow health and safety guidelines as they evolve.
3
Consolidated Results of Operations
Comparison of the Three Months Ended March 31, 2022 and 2021
The following table summarizes our consolidated results of operations for the three months ended March 31, 2022 and 2021:
| Three Months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| USD in thousands | ||||||||
| Research and development (“R&D”) expenses, net | 4,929 | 5,670 | ||||||
| Amortization of intangible assets | 380 | 379 | ||||||
| General and administrative expenses | 2,477 | 2,493 | ||||||
| Operating loss | 7,786 | 8,542 | ||||||
| Interest expenses | 461 | - | ||||||
| Finance income, net | (87 | ) | (143 | ) | ||||
| Loss before tax | 8,160 | 8,399 | ||||||
| Tax expenses | 9 | 3 | ||||||
| Net loss | 8,169 | 8,402 | ||||||
| Basic and diluted loss per share of Common Stock | 0.27 | 0.35 | ||||||
| Weighted average number of shares of Common Stock outstanding, basic and diluted | 29,754,240 | 23,944,573 | ||||||
R&D expenses, net (net of grants received from the Israel Innovation Authority, or the IIA, and considerations from research collaborations) were $4.9 million for the three months ended March 31, 2022, compared to $5.7 million for the three months ended March 31, 2021. The decrease of $0.8 million, or 14%, is primarily due to pauses in the development of BX003, the product candidate for the treatment of IBD and PSC, and CRC product candidate, as well as the discontinuing of the product candidate, BX001, for the treatment of Acne. In addition, the decrease in R&D expenses is due to an increase in IIA grants, offset by an increase in expenses related to conducting pre-clinical and clinical trials of our CF and AD product candidates, BX004 and BX005, respectively. The Company recorded $0.4 million of IIA grants during the three months ended March 31, 2022. The Company did not record any grants during the three months ended March 31, 2021.
There was no material change to general and administrative expenses that impacted earnings for the three months ended March 31, 2022, compared to the three months ended March 31, 2021.
Interest expenses were $0.5 million for the three months ended March 31, 2022. The Company had no interest expenses for the three months ended March 31, 2021. The increase of $0.5 million, is due to interest payments accrued under our loan from Hercules Capital, Inc., or the Hercules Loan, entered into in August 2021.
Financial income, net was $87,000 for the three months ended March 31, 2022, compared to $143,000 for the three months ended March 31, 2021. The decrease in financial income, net of $56,000, or 39%, is primarily due to U.S. dollar/NIS exchange rate differences.
Basic and diluted loss per share of Common Stock was $0.27 for the three months ended March 31, 2022, compared to $0.35 for the three months ended March 31, 2021. The decrease in diluted loss per share of $0.08, or 23%, is primarily due to the increase in outstanding shares as part of a registered direct offering completed in July 2021 and other issuances of our Common Stock and due to a decrease in our operating loss.
4
Liquidity and Capital Resources
We believe our cash and cash equivalents on hand will be sufficient to meet our working capital and capital expenditure requirements until at least the end of 2023. We have revised our operating plans in order to reduce expenses and, until we are able to obtain further funding, we currently plan to focus primarily on BX004 and BX005, our product candidates for CF and AD, respectively. In the future we will likely require or desire additional funds to support our operating expenses and capital requirements or for other purposes, and may seek to raise such additional funds through public or private equity such as the potential second tranche in the Securities Purchase Agreement with the Cystic Fibrosis Foundation, or the CFF Agreement, or debt financings, loans such as the Hercules Loan, or collaborative agreements or from other sources, as well as under the ATM Agreement discussed below. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. If we are unable to raise additional funds when or on the terms desired, our business, financial condition and results of operations could be adversely affected.
Cash Flows
The following table summarizes our sources and uses of cash for the three months ended March 31, 2022 and 2021:
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| USD in thousands | ||||||||
| Net cash used in operating activities | (7,363 | ) | (6,352 | ) | ||||
| Net cash provided by (used in) investing activities | (10,020 | ) | 5,168 | |||||
| Net cash provided by financing activities | 37 | 4,357 | ||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | (4 | ) | (26 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (17,350 | ) | 3,147 | |||||
Operating Activities
Net cash used in operating activities for the three months ended March 31, 2022 was $7.4 million primarily due to a net loss of $8.2 million, mostly due to our R&D and general and administrative expenses, and due to changes in our operating assets and liabilities of $0.6 million, offset by non-cash charges of $1.4 million. Non-cash charges for the three months ended March 31, 2022 consisted primarily of depreciation and amortization expenses of $0.6 million and stock-based compensation expenses in the amount of $0.6 million. Net changes in our operating assets and liabilities consisted primarily of a decrease in trade accounts payable of $1.4 million and in other account payables in the amount of $0.2 million, partially offset by an increase in other current assets in the amount of $1.2 million.
Net cash used in operating activities for the three months ended March 31, 2021 was $6.4 million primarily due to a net loss of $8.4 million, offset by non-cash charges of $1.0 million and by changes in our operating assets and liabilities of $1.1 million. Net changes in our operating assets and liabilities for the three months ended March 31, 2021, consisted primarily of depreciation and amortization expenses in the amount of $0.6 million and stock-based compensation expenses in the amount of $0.5 million. Net changes in our operating assets and liabilities consisted primarily of an increase in other current assets of $0.6 million, in trade account payable in the amount of $0.4 million, and in other account payable in the amount of $0.4 million, partially offset by net change in operating leases in the amount of $0.3 million.
5
Investing Activities
During the three months ended March 31, 2022, net cash provided by investing activities was $10.0 million, as a result of investment in short-term deposits of $10.0 million.
During the three months ended March 31, 2021, net cash provided by investing activities was $5.2 million, primarily as a result of liquidation of short-term deposits, partially offset by purchases of property and equipment.
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 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 purposes. In connection with these foreign exchange contracts, we record gains or losses that offset the revaluation of the balance sheet items under financial income, net in our condensed consolidated statements of operations. As of March 31, 2022, we had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $6.8 million with a fair value of $0.04 million. As of March 31, 2021, we had outstanding foreign exchange contracts in the amount of approximately $5.2 million, with a fair value of $0.04 million.
Financing Activities
During the three months ended March 31, 2022, net cash provided by financing activities was $37,000, from the issuance of Common Stock pursuant to the Open Market Sales Agreement referred to below.
In December 2020, pursuant to a registration statement on Form S-3 declared effective by the Securities and Exchange Commission on December 11, 2020, we entered into an Open Market Sales Agreement, or the ATM Agreement, with Jefferies LLC, or Jefferies, which provides that, upon the terms and subject to the conditions and limitations in the ATM Agreement, we may elect, from time to time, to offer and sell shares of Common Stock having an aggregate offering price of up to $50,000,000 through Jefferies acting as sales agent. We are not obligated to make any sales of Common Stock under the ATM Agreement. From January 1, 2022 through March 31, 2022, we issued an aggregate of 27,171 shares of Common Stock under the ATM Agreement for aggregate gross proceeds of $37. From April 1, 2022 through May 5, 2022, we did not issue any shares of Common Stock pursuant to the ATM Agreement. We may continue to sell shares under the ATM Agreement and otherwise to use our effective shelf registration statement to raise additional funds from time to time.
During the three months ended March 31, 2021, net cash provided by financing activities was $4.4 million, primarily from issuance of Common Stock pursuant to the ATM Agreement. From January 1, 2021 through March 31, 2021, we issued an aggregate of 601,674 shares of Common Stock under the ATM Agreement for aggregate gross proceeds of $4,465,032.
Outlook
We have accumulated a deficit of $116.7 million since our inception. To date, we have not generated revenue from our operations and we do not expect to generate any significant revenues from sales of products in the next twelve months. Our cash needs may increase in the foreseeable future. We expect to generate revenues, from the sale of licenses to use our technology or products, but in the short and medium terms any amounts generated are unlikely to exceed our costs of operations. According to our estimates and based on our current operating plans, our liquidity resources as of March 31, 2022, which consisted primarily of cash, cash equivalents, short-term deposits and restricted cash of approximately $55.7 million and will be sufficient to fund our operations into at least the end of 2023.
Consistent with our continuing R&D activities, we expect to continue to incur additional losses in the foreseeable future. To the extent we require funds above our existing liquidity resources in the medium and long term, we plan to fund our operations, as well as other development activities relating to additional product candidates, through future issuances of public or private equity, including the CFF Agreement, or debt securities, including under our ATM Agreement, loans, including the Hercules Loan and possibly additional grants from the IIA or other government or non-profit institutions. Our ability to raise additional capital in the equity and debt markets is dependent on a number of factors including, but not limited to, the market demand for 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 us.
6
We entered into forward and option contracts to hedge against the risk of overall changes in future cash flow from payments of salaries and related expenses, as well as other expenses denominated in NIS, for a period of less than one year.
As of March 31, 2022, we had outstanding foreign exchange contracts for the exchange of USD to NIS in the amount of approximately $6.8 million. As of March 31, 2021, we had outstanding foreign exchange contracts in the amount of approximately $5.2 million.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to make disclosures under this Item.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation, as of the end of the period covered by this Quarterly Report, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of March 31, 2022.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting, as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the quarter ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
7
PART II - OTHER INFORMATION
Item 6. Exhibits
| * | Filed herewith. |
| ** | Furnished herewith. |
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BIOMX INC. | ||
| Date: May 11, 2022 | By: | /s/ Jonathan Solomon |
| Name: | Jonathan Solomon | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: May 11, 2022 | By: | /s/ Marina Wolfson |
| Name: | Marina Wolfson | |
| Title: | Chief Financial Officer | |
|
(Principal Financial Officer and Principal Accounting Officer) | ||
9