NOTE 1 – GENERAL

BiomX Inc. (individually and together with its subsidiaries, as applicable, the “Company” or “BiomX”) was incorporated in Delaware on November 1, 2017 as a blank check company for the purpose of effecting a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

On October 29, 2019, the Company consummated a business combination with BiomX Ltd. (“BiomX Israel”), following which BiomX Israel became a wholly owned subsidiary of the Company. In connection with the transaction, the Company acquired all of the outstanding shares of BiomX Israel, and the former shareholders of BiomX Israel received 79,311 shares of the Company’s Common Stock, representing 65% of the Company’s issued and outstanding shares immediately after the transaction (the “Recapitalization Transaction”). BiomX Israel was deemed the accounting acquirer in the Recapitalization Transaction. The Company’s Common Stock is traded on the NYSE American under the symbol “PHGE.”

Historically, the Company, through BiomX Israel, operated as a clinical-stage biopharmaceutical company focused on developing natural and engineered phage cocktails designed to target and destroy harmful bacteria in chronic diseases.

On August 24, 2025, BiomX Israel filed an application with the Israeli Registrar of Companies for the expedited voluntary liquidation of RondinX Ltd. (“RondinX”), its subsidiary. The voluntary liquidation became effective on December 3, 2025. RondinX had no significant operations as of the liquidation date.

In December 2025, BiomX Israel commenced insolvency proceedings in Israel, following the announcement on December 8, 2025, of its discontinuation of the ongoing Phase 2b clinical trial of nebulized phage therapy BX004 in patients with cystic fibrosis associated with chronic Pseudomonas aeruginosa infections. As a result, BiomX Israel implemented cost-cutting measures including a significant reduction in workforce. On January 25, 2026, the Central District Court in Lod, Israel, appointed a trustee (the “Trustee”) to BiomX Israel to handle the administration of the insolvency proceedings. See further information in Note 7.

Following the discontinuation of the Company’s Phase 2b clinical trial of BX004 and the commencement of insolvency proceedings with respect to BiomX Israel, the Company began transitioning its strategic focus to the defense, security and critical infrastructure technology markets.

During the first quarter of 2026 and through the issuance date of these consolidated financial statements, the Company underwent significant changes in management, capital structure and business operations. The Company’s Board of Directors and executive management team were reconstituted, including the appointment of new Chief Financial Officer, effective February 27, 2026, and new Chief Executive Officer, effective March 4, 2026. The Company raised gross proceeds of $3,000 in January 2026 from the issuance of Series Y Convertible Preferred Stock (net proceeds amounted to $2,623, less $377 of issuance costs). On March 19, 2026, the investors exercised their warrants into common stock of the Company. As of March 31, 2026 the gross proceeds amounting to $3,300 have not yet been received and were used to fund the acquisition of 60% of Dr. Frucht Systems Ltd. (“DFSL”) on April 13, 2026 (see below).

Subsequent to March 31, 2026, the Company acquired Zorro Net Ltd. (“ZorroNet”) on April 10, 2026, acquired 60% of Dr. Frucht Systems Ltd. (“DFSL”) on April 13, 2026, and formed X Security & Defense Ltd. (“X Security”) as a wholly owned Israeli subsidiary focused on security, defense and first-response technologies (see Note 11 - Subsequent Events). In addition, Mandragola Ltd, a company formed under the laws of the State of Israel (“Mandragola”), committed to provide, or make available, a credit line to support DFSL’s operations, subject to terms to be mutually agreed.

As of the issuance date of these consolidated financial statements, following the foregoing events, the Company’s defense and security activities are expected to be conducted through X Security, DFSL and ZorroNet.

On November 13, 2025, the Board of Directors approved a 1-for-19 reverse stock split of the Company’s Common Stock (the “2025 Reverse Stock Split”), which became effective on November 25, 2025. See Note 8A for further information.

The Company has incurred significant losses and negative cash flows from operations and incurred an accumulated deficit of $236,036 as of March 31, 2026. These are expected to continue in the foreseeable future. The Company plans to continue to fund its operations, through issuance of debt and/or equity securities, loans, or other alternatives. 

Management believes that its current funds, together with revenues expected to be generated by DFSL and ZorroNet beginning in the second quarter of 2026 will be sufficient to fund its operations only for the next several months following the issuance date of these financial statements. The Company’s ability to raise capital is subject to market conditions and other aspects, which may affect the terms and availability of such funding and there is no assurance that the Company will be successful in such processes. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that may result from the outcome of such circumstances.

In October 2023, a large-scale terrorist attack in southern Israel led to the outbreak of armed conflict between Israel and Hamas. The conflict subsequently expanded to additional regional fronts and contributed to a period of heightened geopolitical and security instability in the region.

During 2024 and 2025, hostilities included military operations in Lebanon and direct confrontations involving Iran. These developments increased regional uncertainty and, at times, resulted in temporary disruptions to the Company’s operations in Israel, including limited interruptions to routine business activities.

In September 2025, a ceasefire agreement was reached between Israel and Hamas, and all remaining living Israeli hostages were released and returned to Israel. While the ceasefire has generally held as of the date of these financial statements, the security situation remains sensitive, and the potential for renewed hostilities or broader regional escalation cannot be ruled out. More recently, in February 2026, hostilities between Israel and Iran escalated again. Israel, together with the United States, launched a major joint military campaign of air and missile strikes against targets in Iran, which triggered a broad Iranian response and contributed to significant regional instability. In addition, In March 2026, tensions escalated once again in the Lebanese border as Hezbollah launched an attack on Israel, firing rockets across the border.

In April 2026, a ceasefire agreement was reached; however, the ceasefire remains fragile and the overall security situation in Israel and the region continues to be uncertain.

In response, Israel carried out targeted airstrikes against Hezbollah positions in Lebanon, raising concerns among the international community about the potential for a wider conflict. The situation remains highly fluid, and we are unable to predict when, or on what terms, this escalation will be resolved. Accordingly, the extent of the continued impact on the Company’s operations and financial results, if any, cannot be reasonably estimated at this time.

As a significant portion of the Company’s future activities, are located in Israel, and members of the Company’s management and certain employees and consultants are located in Israel, the Company’s operations may be affected by economic, political, geopolitical and military conditions affecting Israel. Any escalation or expansion of the war could have a negative impact on both global and regional conditions and may adversely affect Company’s business, financial condition, and results of operations.

The Company is unable to predict the duration or severity of the current conflict or any potential escalation. To date, the conflict did not have a significant effect on Company’s activities however, the Company is continuing to regularly follow developments on the matter and is examining the effects on its operations and the value of its assets.