NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 1 – GENERAL
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 100% of the outstanding shares of BiomX Israel (the “Recapitalization Transaction”). Pursuant to the aforementioned
merger agreement, in exchange for all of the outstanding shares of BiomX Israel, the Company issued to the shareholders of BiomX Israel
a total of 15,069,058 shares of the Company’s Common Stock representing approximately 65% of the total shares issued and outstanding
after giving effect to the Recapitalization Transaction. As a result of the Recapitalization Transaction, BiomX Israel became a wholly
owned subsidiary of the Company. As the shareholders of BiomX Israel received the largest ownership interest in the Company, BiomX Israel
was determined to be the “accounting acquirer” in the Recapitalization Transaction.
Following the Recapitalization Transaction,
the Company retained $60,100 held in a trust account, after redemptions of shares held by certain shareholders in connection with the
initial public offering of Chardan Healthcare Acquisition Corp.
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.
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.
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.
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:
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 | |
| 30,007 | | |
| - | | |
| - | | |
| 30,007 | |
Foreign exchange contracts receivable | |
| - | | |
| 42 | | |
| - | | |
| 42 | |
| |
| 30,007 | | |
| 42 | | |
| - | | |
| 30,049 | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Contingent consideration | |
| - | | |
| - | | |
| 175 | | |
| 175 | |
| |
| - | | |
| - | | |
| 175 | | |
| 175 | |
| |
December 31, 2021 | |
| |
Level 1 | | |
Level 2 | | |
Level 3 | | |
Fair Value | |
Assets: | |
| | |
| | |
| | |
| |
Cash equivalents: | |
| | |
| | |
| | |
| |
Money market funds | |
| 30,007 | | |
| - | | |
| - | | |
| 30,007 | |
Foreign exchange contracts receivable | |
| - | | |
| 62 | | |
| - | | |
| 62 | |
| |
| 30,007 | | |
| 62 | | |
| - | | |
| 30,069 | |
Liabilities: | |
| | | |
| | | |
| | | |
| | |
Contingent consideration | |
| - | | |
| - | | |
| 175 | | |
| 175 | |
| |
| - | | |
| - | | |
| 175 | | |
| 175 | |
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 1.26%
to 2.42%. The contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value
of contingent consideration are recorded in consolidated statements of operations. Significant changes in unobservable inputs, mainly
the probability of success and cash flows projected, could result in material changes to the contingent consideration liability. For the
three months ended March 31, 2022, the Company did not record any expenses related to the contingent consideration liability. Change in
contingent consideration for the 3 months ended March 31, 2021 resulted mainly from revaluation.
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 $6,801 with a fair value of $42. As of December 31, 2021, the Company had outstanding foreign exchange contracts for
the exchange of USD to NIS in the amount of approximately $4,180 with a fair value of $62.
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 two new applications for a total budget of NIS 19,444 (approximately $5,874). The IIA committed to fund 30% of the approved budget. The program is for the period beginning January 2021 through December 2021. Through March 31, 2022, the Company received NIS 4,284 (approximately $1,347) from the IIA with respect to these programs. In August 2021, the IIA approved an application for an aggregate budget of NIS 5,737 (approximately $1,778). The IIA committed to fund 50% of the approved budget. The program is for the period beginning July 2021 through June 2022. The program does not bear royalties. Through March 31, 2022, the Company received NIS 1,004 (approximately $313) from the IIA with respect to this program. In March 2022, the IIA approved an application
for a total budget of NIS 13,004 (approximately $4,094). The IIA committed to fund 30% of the approved budget. The program is for the
period beginning January 2022 through December 2022. As of March 31, 2022, the Company did not receive funding from the IIA with respect
to this program.
According to the agreement with the IIA, excluding the August 2021 program, BiomX Israel will pay royalties of 3% to 3.5% of future sales up to an amount equal to the accumulated grant received including annual interest of LIBOR linked to the dollar. BiomX Israel may be required to pay additional royalties upon the occurrence of certain events as determined by the IIA, that are within the control of BiomX Israel. No such events have occurred or were probable of occurrence as of the balance sheet date with respect to these royalties. Repayment of the grant is contingent upon the successful completion of the BiomX Israel’s R&D programs and generating sales. BiomX Israel has no obligation to repay these grants if the R&D program fails, is unsuccessful or aborted or if no sales are generated. The Company had not yet generated sales as of March 31, 2022; therefore, no liability was recorded in these condensed consolidated financial statements. IIA grants are recorded as a reduction of R&D expenses, net. Through March 31, 2022, total grants approved from the IIA aggregated to approximately $8,403 (NIS 28,683). Through March 31, 2022, the Company had received an aggregate amount of $6,297 (NIS 21,361) in the form of grants from the IIA. Total grants subject to royalties’ payments aggregated to approximately $5,977. As of March 31, 2022, the Company had a contingent obligation to the IIA in the amount of approximately $6,122 including annual interest of LIBOR linked to the dollar. 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. |
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 entered
into a Loan and Security Agreement (the “Loan Agreement”) with Hercules Capital, Inc. (“Hercules”), with respect
to a venture debt facility. Under the Loan Agreement, Hercules provided the Company with access to a term loan with an aggregate principal
amount of up to $30,000 (the “Term Loan Facility”), available in three tranches, subject to certain terms and conditions.
The first tranche of $15,000 was advanced to the Company on the date the Loan Agreement was executed. Upon the occurrence of specified
milestones and continuing through December 31, 2022, a loan in the aggregate principal amount of up to $10,000, or the second tranche,
and upon the occurrence of specified milestones and continuing through September 30, 2023, a loan in the aggregate principal amount of
up to $5,000, or the third tranche, may become available. The milestones for the remaining tranches have not yet been reached as of March
31, 2022. The Company is required to make interest only payments through March 1, 2023, or extended to September 1, 2023 upon satisfaction
of certain milestones, and is required to then repay the principal balance and interest in equal monthly installments through September
1, 2025.
The Company may prepay advances under
the Loan Agreement, in whole or in part, at any time subject to a prepayment charge equal to: (a) 3.0 % of amounts prepaid, if such prepayment
occurs during the first 12 months following the Closing Date; (b) 2.0% after 12 months but prior to 24 months; (c) 1.0% after 24 months
but prior to 36 months, and (d) no charge after 36 months. Upon prepayment or repayment of all or any of the term loans under the Term
Loan Facility, the Company is required to pay an end of term charge (“End of Term Charge”) equal to 6.55% of the total aggregate
amount of the term loans being prepaid or repaid.
Interest on the term loan accrues at a
per annum rate equal to the greater of (i) the Prime Rate as reported in The Wall Street Journal plus 5.70% and (ii) 8.95%. On March 31,
2022, the Prime Rate was 3.25%. Interest expense is calculated using the effective interest method and is inclusive of non-cash amortization
of capitalized loan issuance costs. Debt issuance costs are recorded on the consolidated balance sheet as a reduction of liabilities.
Amounts allocated to the debt, net of issuance cost, are subsequently recognized at amortized cost using the effective interest method.
On March 31, 2022, the effective interest rate was 13.73%.
As of March 31, 2022, the carrying value
of the term loan consists of $15,000 principal outstanding less the debt discount and issuance costs of approximately $775. The End of
Term Charge of $983 is recognized over the life of the term loan as interest expense using the effective interest method. The debt issuance
costs have been recorded as a debt discount which are being accreted to interest expense through the maturity date of the term loan.
Interest expense relating to the term
loan, which is included in interest expense in the condensed statements of operations was $461 for the three months ended March 31, 2022.
Under the terms of the Loan Agreement,
the Company granted first priority liens and security interests in substantially all of the Company’s intellectual property as collateral
for the obligations thereunder. The Company also granted Hercules the right, at their discretion, to participate in any closing of any
single subsequent broadly marketed financing as defined up to a maximum aggregate amount of $2,000 under the terms as afforded to other
investors in such financing. The Loan Agreement also contains representations and warranties by the Company and Hercules, indemnification
provisions in favor of Hercules and customary affirmative and negative covenants, including a liquidity covenant beginning October 1,
2022, requiring the Company to maintain a minimum aggregate compensating cash balance of $5,000, and events of default, including a material
adverse change in the Company’s business, payment defaults, breaches of covenants following any applicable cure period, and a material
impairment in the perfection or priority of Hercules’ security interest in the collateral. In the event of default by the Company
under the Loan Agreement, the Company may be required to repay all amounts then outstanding under the Loan Agreement.
Future principal payments for the long-term
debt are as follows:
| |
March 31, 2022 | |
2023 | |
| 4,458 | |
2024 | |
| 5,804 | |
2025 | |
| 4,738 | |
Total principal payments | |
| 15,000 | |
Unamortized discount and debt issuance costs | |
| (465 | ) |
Long-term debt | |
| 14,535 | |
BIOMX
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 5 – STOCKHOLDERS EQUITY
At-the-market Sales Agreement:
In December 2020, pursuant to a registration
statement on Form S-3 declared effective by the Securities and Exchange Commission on December 11, 2020, the Company entered into an Open
Market Sales Agreement (“ATM Agreement”) with Jefferies LLC. (“Jefferies”), which provides that, upon the terms
and subject to the conditions and limitations in the ATM Agreement, the Company may elect, from time to time, to offer and sell shares
of Common Stock with an aggregate offering price of up to $50,000, with Jefferies acting as sales agent. During the three months ended
March 31, 2022, the Company sold 27,171 shares of Common Stock under the ATM Agreement, at an average price of $1.36 per share, raising
aggregate net proceeds of approximately $37, after deducting an aggregate commission of $1.
Maruho Agreement:
In October 2021, the Company entered
into a Stock Purchase Agreement with a subsidiary of Maruho Co. Ltd., (“Maruho”), a leading dermatology-focused pharmaceutical
company in Japan, pursuant to which the Company issued to Maruho 375,000 shares of Common Stock at a price of $8.00 per share for gross
proceeds of $3,000. The company also granted Maruho a right of first offer to license its atopic dermatitis product candidate, BX005,
in Japan. The right of first offer will commence following the availability of results from the Phase 1/2 study expected in the fourth
quarter of 2022. The Company applied ASC 606 by analogy to the agreements. The agreements were combined into a single unit of account
for the purpose of applying ASC 606. Part of the consideration paid under the agreements, equal to the grant date fair value of the shares
issued to Maruho of $1,024, was attributed to the issuance of shares and accounted for as an increase in equity. The remainder of $1,976
was attributed to a contract liability, to be recognized as other income, at a point in time, once the clinical trials related to the
product candidate are completed.
CFF Agreement:
In December 2021, the Company entered into a Securities
Purchase Agreement with the Cystic Fibrosis Foundation (“CF Foundation”), an organization that historically played a role
in supporting the development of innovative therapies for patients suffering from cystic fibrosis (CF). Under the terms of the agreement,
the Company will receive up to $5,000 in two tranches. In the first tranche, which closed and fully received on December 21, 2021, the
CF Foundation invested $3,000 as an initial equity investment based on a share price of $2.57. Upon completion of patient dosing in Part
1 of the Company’s Phase 1b/2a study of BX004, the Company would have the right to receive the second tranche of $2,000, also as
an equity investment. In the event that the average closing price of the Common Stock for the ten trading days prior to the second tranche
completion is less than $2.57, the Company shall have the right in its sole discretion to waive the second tranche payment and in such
event the CF Foundation shall not have any right to receive additional shares. The Company concluded that the second tranche is a
freestanding financial instrument. The Company also concluded that since the instrument will be predominantly settled in a variable number
of shares at a fixed monetary amount, the second tranche is in the scope of ASC 480 and should be accounted for at fair value with subsequent
changes in fair value recognized in the statements of operations in each period. The Company further determined that due to the settlement
mechanism, the fair value of the second tranche is negligible, both at inception and on March 31, 2022.
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 1,000,000 shares of preferred
stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the
Company’s Board of Directors (the “Board”).
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 | |
IPO (December 13, 2018) | |
December 13, 2023 | |
| 11.50 | | |
| 2,900,000 | |
Public Warrants | |
IPO (December 13, 2018) | |
October 28, 2024 | |
| 11.50 | | |
| 3,500,000 | |
2021 Registered Direct Offering Warrants | |
SPA (July 28, 2021) | |
January 28, 2027 | |
| 5.00 | | |
| 2,812,501 | |
| |
| |
| |
| | | |
| 9,212,501 | |
|
B. |
Stock-based Compensation: |
On March 29, 2022, the Board of Directors
approved the grant of 1,153,500 options to 89 employees, three senior officers, one consultant, and five directors under the Company’s
2019 Equity Incentive Plan, without consideration. Options were granted at an exercise price of $1.41 per share with a vesting period
of four years. Directors and senior officers are entitled to full acceleration of their unvested options upon the occurrence of both a
change in control of the Company and the end of their engagement with the Company.
BIOMX
INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(USD in thousands, except share and per share data)
(unaudited)
NOTE 5 – STOCKHOLDERS EQUITY (Cont.)
|
B. |
Stock-based Compensation: (Cont.) |
The fair value of each option was estimated
as of the date of grant or reporting period using the Black-Scholes option-pricing model, using the following assumptions:
| |
Three Months Ended March 31, | |
| |
2022 | | |
2021 | |
Underlying value of Common Stock ($) | |
| 1.41 | | |
| 7.02 | |
Exercise price ($) | |
| 1.41 | | |
| 7.02 | |
Expected volatility (%) | |
| 85.3 | | |
| 85.0 | |
Expected terms of the option (years) | |
| 6.11 | | |
| 6.11 | |
Risk-free interest rate (%) | |
| 2.50 | | |
| 1.17 | |
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
$1,307. These amounts will be recognized in statements of operations over the vesting period.
|
(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 | |
| 4,084,549 | | |
$ | 3.95 | | |
$ | 671 | |
Granted | |
| 1,153,500 | | |
$ | 1.41 | | |
| | |
Forfeited | |
| (88,399 | ) | |
$ | 6.38 | | |
| | |
Exercised | |
| - | | |
$ | - | | |
| | |
Outstanding at the end of period | |
| 5,149,650 | | |
$ | 3.34 | | |
$ | 888 | |
Exercisable at the end of period | |
| 2,801,390 | | |
| | | |
| | |
Weighted average remaining contractual life of outstanding options – years as of March 31, 2022 | |
| 7.25 | | |
| | | |
| | |
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) | |
November 27, 2017 | |
| | | |
| - | | |
| 2,974 | |
| | In November 2017, BiomX Israel issued 2,974 warrants to its scientific founders. The warrants were fully vested at their grant date and will expire immediately prior to a consummation of an M&A transaction. The warrants did not expire as a result of the Recapitalization Transaction and have no exercise price. |
|
(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 | |
| 258 | | |
| 331 | |
General and administrative | |
| 357 | | |
| 199 | |
| |
| 615 | | |
| 530 | |
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. The calculation of diluted loss per share for the three months ended March 31, 2022 does not
include 5,149,650, 9,215,475 and 4,000,000 of shares underlying options, shares underlying warrants and contingent shares, respectively,
because the effect would be anti-dilutive.