HOW TO OBTAIN ADDITIONAL INFORMATION

This proxy statement incorporates important business and financial information about CHAC that is not included or delivered herewith. If you would like to receive additional information or if you want additional copies of this document, agreements contained in the appendices or any other documents filed by CHAC with the Securities and Exchange Commission, such information is available without charge upon written or oral request. Please contact the following:

Chardan Healthcare Acquisition Corp.
17 State St., Floor 21
New York, NY 10004
Attn: Jonas Grossman
Telephone: (646) 465-9000

If you would like to request documents, please do so no later than October 21, 2019 to receive them before CHAC’s special meeting. Please be sure to include your complete name and address in your request. Please see “Where You Can Find Additional Information” to find out where you can find more information about CHAC and BiomX. You should rely only on the information contained in this proxy statement in deciding how to vote on the Business Combination. Neither CHAC, BiomX nor the Merger Sub has authorized anyone to give any information or to make any representations other than those contained in this proxy statement. Do not rely upon any information or representations made outside of this proxy statement. The information contained in this proxy statement may change after the date of this proxy statement. Do not assume after the date of this proxy statement that the information contained in this proxy statement is still correct.

USE OF CERTAIN TERMS

Unless otherwise stated in this proxy statement, or the context otherwise requires:

•        References to “CHAC,” “we,” “us” or “our company” refer to Chardan Healthcare Acquisition Corp., a Delaware corporation.

•        References to “Merger Sub” in this proxy statement refer to CHAC Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of CHAC.

•        References to “BiomX” refer to BiomX Ltd., an Israeli company.

•        References to “U.S. Dollars” and “$” refer to the legal currency of the United States.

CHARDAN HEALTHCARE ACQUISITION CORP.

17 State St, 21st Floor
New York, NY 10004
Telephone: (646) 465-9000

NOTICE OF SPECIAL MEETING OF
CHARDAN HEALTHCARE ACQUISITION CORP. STOCKHOLDERS
To Be Held on October 23, 2019

To Chardan Healthcare Acquisition Corp. (“CHAC”) Stockholders:

A special meeting of stockholders of CHAC will be held at the office of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154, on October 23, 2019, at 10:00 a.m., for the following purposes:

•        To approve the Merger Agreement, dated as of July 16, 2019 (the “Merger Agreement”) by and among CHAC, BiomX Ltd. (“BiomX”) and CHAC Merger Sub Ltd. (the “Merger Sub”), and the transactions contemplated thereby, (collectively referred to as the “Business Combination”). This proposal is referred to as the “Business Combination Proposal” or “Proposal No. 1.”

•        To approve the amendment of the Amended and Restated Certificate of Incorporation of CHAC to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000. This proposal is referred to as the “Share Increase Proposal” or “Proposal No. 2.”

•        To approve the amendment of the Amended and Restated Certificate of Incorporation of CHAC to classify the Board of Directors into three classes. This proposal is referred to as the “Classified Board Proposal” or “Proposal No. 3,” and together with the Share Increase Proposal, they are referred to as the “Amendment Proposals.”

•        To approve the Chardan Healthcare Acquisition Corp. 2019 Omnibus Long-Term Incentive Plan. This proposal is referred to as the “Equity Plan Adoption Proposal” or “Proposal No. 4.”

•        To approve the issuance of more than 20% of the issued and outstanding common stock of CHAC pursuant to the terms of the Merger Agreement, as required by NYSE American Listed Company Guide Sections 712 and 713. This proposal is referred to as the “NYSE Proposal” or “Proposal No. 5.”

•        To approve the adjournment of the special meeting, if necessary or advisable, in the event CHAC does not receive the requisite stockholder vote to approve the Business Combination. This proposal is called the “Business Combination Adjournment Proposal” or “Proposal No. 6.”

Proposals 1 through 6 are sometimes collectively referred to herein as the “Proposals.”

As of September 17, 2019, there were 8,750,000 shares of common stock of CHAC issued and outstanding and entitled to vote. Only CHAC stockholders who hold common stock of record as of the close of business on September 17, 2019 are entitled to vote at the special meeting or any adjournment of the special meeting. This proxy statement is first being mailed to stockholders on or about September 23, 2019. Approval of the Business Combination Proposal, the Equity Plan Adoption Proposal, the NYSE Proposal and the Business Combination Adjournment Proposal will each require the affirmative vote of the holders of a majority of the issued and outstanding common stock present and entitled to vote at the special meeting or any adjournment thereof. Approval of each of the Amendment Proposals will require the affirmative vote of a majority of the issued and outstanding common stock entitled to vote at the special meeting. Attending the special meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the proposals and, assuming a quorum is present, broker non-votes will have no effect on any of the Proposals, except that a broker non-vote will have the same effect as voting against each of the Amendment Proposals.

CHAC currently has authorized share capital of 31,000,000 shares consisting of 30,000,000 shares of common stock with a par value of $0.0001 per share and 1,000,000 shares of preferred stock with a par value of $0.0001 per share.

Holders of CHAC’s common stock will not be entitled to appraisal rights under Delaware law in connection with the Business Combination.

Whether or not you plan to attend the special meeting in person, please submit your proxy card without delay. Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the special meeting. If you fail to return your proxy card and do not attend the meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting. You may revoke a proxy at any time before it is voted at the special meeting by executing and returning a proxy card dated later than the previous one, by attending the special meeting in person and casting your vote by ballot or by submitting a written revocation that is received by us before we take the vote at the special meeting to Chardan Healthcare Acquisition Corp., 17 State St, 21st Floor, New York, NY 10004; telephone: (646) 465-9000. If you hold your shares through a bank, broker or other nominee, you should follow the instructions of your bank, broker or other nominee regarding revocation of proxies.

CHAC’s Board of Directors unanimously recommends that CHAC stockholders vote “FOR” approval of each of the Proposals.

By order of the Board of Directors,

September 23, 2019

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR CHAC stockholders

Q:     What is the purpose of this document?

A:     Chardan Healthcare Acquisition Corp., a Delaware corporation (“CHAC”), BiomX Ltd., an Israeli company (“BiomX”), and CHAC Merger Sub Ltd., an Israeli company and wholly-owned subsidiary of CHAC (the “Merger Sub”), have agreed to a Business Combination under the terms of a Merger Agreement, dated as of July 16, 2019, by and among CHAC, the Merger Sub and BiomX. The consummation of the transactions contemplated by the Merger Agreement are referred to collectively as the Business Combination and the proposal to approve the Business Combination is referred to as the Business Combination Proposal. The Merger Agreement is attached to this proxy statement as Annex A, and is incorporated into this proxy statement by reference. You are encouraged to read this proxy statement, including “Risk Factors” and all the annexes hereto.

CHAC stockholders are being asked to consider and vote upon a proposal to adopt the Merger Agreement, pursuant to which CHAC will acquire all of the issued and outstanding shares and other equity interests of BiomX, which will merge with (and survive following its merger with), the Merger Sub, and related Proposals.

The units (the “CHAC Units”) that were issued in CHAC’s initial public offering (“Initial Public Offering”) each consist of one share of common stock of CHAC, par value $0.0001 per share (the “CHAC Shares”), and one redeemable warrant to purchase one-half of a CHAC Share, with every two redeemable warrants entitling the holder thereof to purchase one CHAC Share for $11.50 per full share (the “CHAC Warrants”). Simultaneously with the consummation of the Initial Public Offering, we consummated the private placement of an aggregate of 2,900,000 warrants, each exercisable to purchase one CHAC Share for $11.50 per share (the “ Private CHAC Warrants”). CHAC stockholders (except for Chardan Investments, LLC, CHAC’s Initial Public Offering sponsor (the “Sponsor”) and CHAC’s officers and directors) will be entitled to redeem their CHAC Shares for a pro rata share of the trust account (currently anticipated to be no less than approximately $10.16 per share for stockholders) net of taxes payable.

The CHAC Units, CHAC Shares, and CHAC Warrants are currently listed on the NYSE American Stock Exchange.

This proxy statement contains important information about the proposed Business Combination and the other matters to be acted upon at the special meeting of CHAC stockholders. You should read it carefully.

Q:     What is being voted on?

A:     Below are the proposals on which CHAC stockholders are being asked to vote:

•        To approve the Merger Agreement, dated as of July 16, 2019 (the “Merger Agreement”) by and among CHAC, BiomX Ltd. (“BiomX”) and CHAC Merger Sub Ltd. (the “Merger Sub”), and the transactions contemplated thereby, (collectively referred to as the “Business Combination”). This proposal is referred to as the “Business Combination Proposal” or “Proposal No. 1.”

•        To approve the amendment of the Amended and Restated Certificate of Incorporation of CHAC to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000. This proposal is referred to as the “Share Increase Proposal” or “Proposal No. 2.”

•        To approve the amendment of the Amended and Restated Certificate of Incorporation of CHAC to classify the Board of Directors into three classes. This proposal is referred to as the “Classified Board Proposal” or “Proposal No. 3,” and together with the Share Increase Proposal, they are referred to as the “Amendment Proposals.”

•        To approve the Chardan Healthcare Acquisition Corp. 2019 Omnibus Long-Term Incentive Plan. This proposal is referred to as the “Equity Plan Adoption Proposal” or “Proposal No. 4.”

•        To approve the issuance of more than 20% of the issued and outstanding common stock of CHAC pursuant to the terms of the Merger Agreement, as required by NYSE American Listed Company Guide Sections 712 and 713. This proposal is referred to as the “NYSE Proposal” or “Proposal No. 5.”

•        To approve the adjournment of the special meeting, if necessary or advisable, in the event CHAC does not receive the requisite stockholder vote to approve the Business Combination. This proposal is called the “Business Combination Adjournment Proposal” or “Proposal No. 6.”

Q:     What is the consideration being paid to BiomX securityholders?

A:     The securityholders of BiomX that hold shares of BiomX or vested options or warrants exercisable for shares of BiomX will receive an aggregate of 16,625,000 CHAC Shares or options or warrants to purchase CHAC Shares, respectively, subject to reduction for indemnification claims as described in the section entitled “The Merger Agreement.”

In addition, CHAC and certain current CHAC public stockholders entered into agreements with certain of BiomX’s current shareholders pursuant to which, among other things, CHAC also agreed to issue such BiomX shareholders the following number of additional shares in the aggregate subject to the achievement of the conditions specified below:

a.       Following the Closing, if the daily volume weighted average price of a share of CHAC common stock in any 20 trading days within a 30 trading day period prior to January 1, 2022 is greater than or equal to $16.50 per share, then CHAC shall issue 2,000,000 CHAC Shares.

b.       Following the Closing, if the daily volume weighted average price of a share of CHAC common stock in any 20 trading days within a 30 trading day period prior to January 1, 2024 is greater than or equal to $22.75 per share, then CHAC shall issue 2,000,000 CHAC Shares.

c.       Following the Closing, if the daily volume weighted average price of a share of CHAC common stock in any 20 trading days within a 30 trading day period prior to January 1, 2026 is greater than or equal to $29.00 per share, then CHAC shall issue 2,000,000 CHAC Shares.

Q:     Following the closing of the Business Combination, what percentage of the combined company will the former CHAC public stockholders own?

A:     Assuming there are no redemptions of our public shares, and giving effect to the purchase and sale agreements referred to above, it is anticipated that upon completion of the Business Combination, the ownership of the outstanding shares of the post-combination company will be as follows:

•        CHAC public stockholders will own approximately 20%, excluding shares beneficially owned by our Sponsor,

•        Our Sponsor will own approximately 7%, and

•        BiomX shareholders will own approximately 73%.

The ownership percentages with respect to the post-combination company following the Business Combination set forth above do not take into account (a) warrants to purchase CHAC Shares that will remain outstanding immediately following the Business Combination; (b) stock options that will be issued to holders of BiomX stock options and warrants, outstanding and unexercised as of immediately prior to the effective time of the Business Combination; or (c) the issuance of any shares upon completion of the Business Combination, but does include an aggregate of 1,437,500 shares of common stock to the Sponsor (“Founder Shares”), which will be converted into shares of common stock at the Closing on a one-for-one basis. If the actual facts are different than these assumptions, the percentage ownership retained by our public stockholders following the Business Combination will be different. The CHAC public warrants and private placement warrants will become exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

Assuming no redemptions, the combined company would have a pro forma valuation of approximately $254 million at a price of $10.00 per share and the securities issued to the BiomX shareholders would have a value of $166.25 million at an assumed price of $10.00 per share.

For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

Q:     Do any of CHAC’s directors or officers have interests that may conflict with my interests with respect to the Business Combination?

A:      CHAC’s directors and officers have interests in the Business Combination that are different from your interests as a stockholder. You should keep in mind the following interests of CHAC’s directors and officers:

In March 2018, CHAC issued the Founder Shares for an aggregate purchase price of $25,000, an aggregate of 37,500 of which were subsequently sold to our independent directors for the same amount that our Sponsor paid for them. On September 14, 2018, CHAC effectuated a 1.4-for-1 stock dividend resulting in an aggregate of 2,012,500 Founder Shares outstanding. The Founder Shares included an aggregate of up to 262,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor would own 20% of the CHAC’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). The underwriters’ over-allotment option expired unexercised on February 4, 2019. As such, 262,500 Founder Shares were forfeited resulting in 1,750,000 Founder Shares being issued and outstanding. In addition, in conjunction with the closing of the Initial Public Offering, an affiliate of the Sponsor purchased 2,900,000 warrants, each warrant to purchase one CHAC Share, at a price of $0.40 per warrant. Each of our officers has a pecuniary interest in the shares held by the Sponsor. Therefore, in light of the amount of consideration paid for the foregoing securities, CHAC’s directors and officers will likely benefit from the completion of the Business Combination even if the Business Combination causes the market price of CHAC’s securities to significantly decrease. The likely benefit to CHAC’s directors and officers may influence their motivation for promoting the Business Combination and/or soliciting proxies for the approval of the Business Combination Proposal. See “Risk Factors — Risks Related to CHAC’s Business — CHAC’s directors and officers may have certain conflicts in determining to recommend the Business Combination with BiomX, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a stockholder.”

If CHAC does not consummate the Business Combination by the date that is 24 months from the closing of the Initial Public Offering, or December 18, 2020, CHAC will be required to dissolve and liquidate and the securities held by CHAC’s insiders will be worthless because such holders have agreed to waive their rights to any liquidation distributions.

In addition, the exercise of CHAC’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes or waivers are appropriate and in CHAC stockholders’ best interests. See “Risk Factors — Risks Related to CHAC’s Business — Because CHAC’s Sponsor and all of CHAC’s officers and directors own CHAC Shares and CHAC Warrants which will not participate in liquidation distributions and, therefore, they may have a conflict of interest in determining whether the Business Combination is appropriate.”

Q:     When and where is the special meeting of CHAC’s stockholders?

A:      The special meeting of CHAC stockholders will take place at the office of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154 on October 23, 2019, at 10:00 a.m.

Q:     Who may vote at the special meeting of stockholders?

A:      Only holders of record of CHAC Shares as of the close of business on September 17, 2019 (the “Record Date”) may vote at the special meeting of stockholders. As of September 17, 2019, there were 8,750,000 shares of CHAC Shares outstanding and entitled to vote. Assuming that all of CHAC’s outstanding shares are present and entitled to vote at the meeting, 4,375,001 shares would be required to be voted in favor of each Proposal in order approve such Proposal.

Public stockholders owning 3,032,773 shares have entered into agreements pursuant to which they have agreed to vote in favor of the Proposals. In addition, CHAC’s initial stockholders own 1,750,000 shares. Together with the 3,032,773 shares that have agreed to vote in favor of the transaction, a majority of CHAC’s outstanding shares have agreed to vote in favor of the Proposals, meaning that no additional shares would be required to be voted in favor of the Proposals in order for the Proposals to be approved at the meeting.

Please see “Special Meeting of CHAC Stockholders — Record Date; Who is Entitled to Vote” for further information.

Q:     What is the quorum requirement for the special meeting of stockholders?

A:      Stockholders representing a majority of the common stock issued and outstanding as of the Record Date and entitled to vote at the special meeting must be present in person or represented by proxy in order to hold the special meeting and conduct business. This is called a quorum. CHAC Shares will be counted for purposes of determining whether there is a quorum if the stockholder (i) is present and entitled to vote at the meeting, or (ii) has properly submitted a proxy card. In the absence of a quorum, stockholders representing a majority of the votes present in person or represented by proxy at such meeting, may adjourn the meeting until a quorum is present.

Q:     What vote is required to approve the Proposals?

A:      Approval of the Business Combination Proposal, the Equity Plan Adoption Proposal, the NYSE Proposal, and the Business Combination Adjournment Proposal will each require the affirmative vote of the holders of a majority of the issued and outstanding common stock of CHAC present and entitled to vote at the special meeting. Approval of each of the Amendment Proposals will require the approval of the holders of a majority of the CHAC Shares entitled to vote at the special meeting. Attending the special meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the proposals and, assuming a quorum is present, broker non-votes will have no effect on the Proposals, except that a broker non-vote will have the same effect as voting against each of the Amendment Proposals.

Q:     How will the initial stockholders vote?

A:      CHAC’s Sponsor and other initial stockholders, who as of the Record Date owned 1,750,000 Founder Shares, or approximately 20% of the outstanding CHAC Shares, have agreed to vote their respective shares of common stock acquired by them prior to the Initial Public Offering in favor of each of the Proposals, including the Business Combination Proposal. CHAC’s Sponsor and other initial stockholders have also agreed that they will vote any shares they purchase or have purchased in the open market in or after the Initial Public Offering in favor of each of the Proposals.

Q:     Am I required to vote against the Business Combination Proposal in order to have my common stock redeemed?

A:      No. You are not required to vote against the Business Combination Proposal in order to have the right to demand that CHAC redeem your common stock for cash equal to your pro rata share of the aggregate amount then on deposit in the trust account (before payment of deferred underwriting commissions and including interest earned on their pro rata portion of the trust account, net of taxes payable). These rights to demand redemption of CHAC Shares for cash are sometimes referred to herein as redemption rights. If the Business Combination is not completed, then holders of CHAC Shares electing to exercise their redemption rights will not be entitled to receive such payments.

Q:     Do I have redemption rights?

A:      Yes. However, a redemption payment will only be made in the event that the proposed Business Combination is consummated. If the proposed Business Combination is not completed for any reason, then public stockholders who exercised their redemption rights would not be entitled to receive the redemption payment. You may not elect to redeem your shares prior to the completion of the Business Combination.

The units (the “CHAC Units”) that were issued in CHAC’s Initial Public Offering, each consist of one share of common stock of CHAC, par value $0.0001 per share (the “CHAC Shares”), and one redeemable warrant to purchase one-half of a CHAC Share, with every two redeemable warrants entitling the holder thereof to

purchase one CHAC Share for $11.50 per full share (the “CHAC Warrants”). Assuming the Proposed Business Combination closes, CHAC stockholders (except for the Sponsor or CHAC’s officers and directors) will be entitled to redeem their CHAC Shares for a pro rata share of the trust account (currently anticipated to be no less than approximately $10.16 per share for stockholders) net of taxes payable.

Q:     How do I exercise my redemption rights?

A:      If you are a public stockholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern time on October 21, 2019 (two (2) business days before the special meeting), that CHAC redeem your shares into cash; and (ii) submit your request in writing to CHAC’s transfer agent, at the address listed at the end of this section and deliver your shares to CHAC’s transfer agent physically or electronically using The Depository Trust Company’s (“DTC”) DWAC (Deposit/Withdrawal at Custodian) System at least two (2) business days before the special meeting.

Any corrected or changed written demand of redemption rights must be received by CHAC’s transfer agent two (2) business days before the special meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent at least two (2) business days before the special meeting.

Public stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of CHAC Shares as of the Record Date. Any public stockholder who holds shares of CHAC Shares on or before October 21, 2019 (two (2) business days before the special meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid, at the consummation of the Business Combination).

Any request for redemption, once made, may be withdrawn at any time up to the date of the special meeting of CHAC stockholders. The actual per share redemption price will be equal to the aggregate amount then on deposit in the trust account (before payment of deferred underwriting commissions and including interest earned on their pro rata portion of the trust account, net of taxes payable), divided by the number of shares of common stock sold in the Initial Public Offering. Please see the section entitled “Special Meeting of CHAC Stockholders — Redemption Rights” for more information on the procedures to be followed if you wish to redeem your CHAC Shares for cash.

Q:     How can I vote?

A:      If you were a holder of record CHAC Shares on the Record Date for the special meeting of CHAC stockholders, you may vote with respect to the applicable Proposals in person at the special meeting of CHAC stockholders, or by submitting a proxy by mail so that it is received prior to 9:00 a.m. on October 23, 2019, in accordance with the instructions provided to you under “Special Meeting of CHAC Stockholders.” If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker or bank or other nominee may provide voting instructions (including any telephone or Internet voting instructions). You should contact your bank, broker or other nominee in advance of the special meeting to ensure that votes related to the shares you beneficially own will be properly counted. In this regard, you must provide your bank, broker or other nominee with instructions on how to vote your shares or, if you wish to attend the special meeting of CHAC stockholders and vote in person, obtain a proxy from your bank, broker or other nominee.

Q:     If my shares are held in “street name” by my bank, broker or other nominee, will they automatically vote my shares for me?

A:      No. Under the rules of various national securities exchanges, your bank, broker or other nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your bank, broker or other nominee. CHAC believes the Proposals other than the adjournment proposal are non-discretionary and, therefore, your bank, broker or other nominee cannot vote your shares without your instruction. If you do not provide instructions with your proxy, your bank, broker or other nominee may submit a proxy card expressly indicating that it is NOT voting your shares; this indication that a bank, broker or other nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be considered present for the purposes of

establishing a quorum and will have no effect on the Proposals, except that a broker non-vote will have the same effect as voting against each of the Amendment Proposals. You should instruct your broker to vote your CHAC Shares in accordance with directions you provide.

Q:     What if I abstain from voting or fail to instruct my bank, broker or other nominee on how to vote my shares?

A:      CHAC will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the special meeting of CHAC stockholders. For purposes of approval, an abstention on any Proposals will have the same effect as a vote “AGAINST” such Proposal. Additionally, failure to elect to exercise your redemption rights will preclude you from having your common stock redeemed for cash. In order to exercise your redemption rights, you must make an election on the applicable proxy card to redeem such CHAC Shares or submit a request in writing to CHAC’s transfer agent at the address listed on page 210, and deliver your shares to CHAC’s transfer agent physically or electronically through DTC prior to the special meeting of CHAC stockholders.

Q:     Can I change my vote after I have mailed my proxy card?

A:      Yes. You may change your vote at any time before your proxy is voted at the special meeting. You may revoke your proxy by executing and returning a proxy card dated later than the previous one, or by attending the special meeting in person and casting your vote by ballot or by submitting a written revocation stating that you would like to revoke your proxy that we receive prior to the special meeting. If you hold your shares through a bank, broker or other nominee, you should follow the instructions of your bank, broker or other nominee regarding the revocation of proxies. If you are a record holder, you should send any notice of revocation or your completed new proxy card, as the case may be, to:

Chardan Healthcare Acquisition Corp.
17 State St., Floor 21
New York, NY 10004
Attn: Jonas Grossman
Telephone: (646) 465-9000

Q:     Should I send in my share certificates now?

A:      CHAC stockholders who intend to have their common stock redeemed should send their certificates to CHAC’s transfer agent two (2) business days before the special meeting. Please see “Special Meeting of CHAC Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your common stock for cash.

Q:     When is the Business Combination expected to occur?

A:      Assuming the requisite stockholder approvals are received and all other conditions to closing satisfied, CHAC expects that the Business Combination will occur no later than October 31, 2019.

Q:     May I seek statutory appraisal rights or dissenter rights with respect to my shares?

A:      No. Appraisal rights are not available to holders of CHAC Shares in connection with the proposed Business Combination. For additional information, see the sections entitled “Special Meeting of CHAC Stockholders — Appraisal Rights.”

Q:     What happens if the Business Combination is not consummated?

A:      If CHAC does not consummate a business combination by the date that is 24 months from the closing of the Initial Public Offering, or December 18, 2020, then pursuant to Article Sixth of its Amended and Restated Certificate of Incorporation, CHAC’s officers must take all actions necessary in accordance with the Delaware General Corporation Law (referred to herein as the “DGCL”) to dissolve and liquidate CHAC as soon as reasonably practicable. Following dissolution, CHAC will no longer exist as a company. In any liquidation, the funds held in the trust account, plus any interest earned thereon (net of taxes payable), together with any remaining out-of-trust net assets will be distributed pro-rata to holders of CHAC Shares who acquired such common stock in CHAC’s Initial Public Offering or in the aftermarket. The estimated consideration that each

CHAC share would be paid at liquidation would be approximately $10.16 per share for stockholders based on amounts on deposit in the trust account as of September 17, 2019. The closing price of CHAC’s common stock on the NYSE American Stock Exchange as of September 17, 2019 was $10.14. CHAC’s Sponsor and other initial stockholders waived the right to any liquidation distribution with respect to any CHAC Shares held by them.

Q:     What happens to the funds deposited in the trust account following the Business Combination?

A:      Following the closing of the Business Combination, funds in the trust account will be released to CHAC. Holders of CHAC Shares exercising redemption rights will receive their per share redemption price. The balance of the funds will be utilized to fund the Business Combination. As of June 30, 2019, there was $70,881,151 in CHAC’s trust account. Approximately $10.16 per outstanding share issued in CHAC’s Initial Public Offering will be paid to the public investors. Any funds remaining in the trust account after such uses will be used for future working capital and other corporate purposes of the combined entity.

Q:     Who will solicit the proxies and pay the cost of soliciting proxies for the Special Meeting?

A:      CHAC will pay the cost of soliciting proxies for the Special Meeting. CHAC has engaged Morrow Sodali to assist in the solicitation of proxies for the Special Meeting. CHAC has agreed to pay Morrow Sodali a fee of $20,000, plus disbursements, and will reimburse Morrow Sodali for its reasonable out-of-pocket expenses and indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses. CHAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of CHAC Shares for their expenses in forwarding soliciting materials to beneficial owners of the CHAC Shares and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

DELIVERY OF DOCUMENTS TO CHAC’s stockholders

Pursuant to the rules of the Securities and Exchange Commission (“SEC”), CHAC and services that it employs to deliver communications to its stockholders are permitted to deliver to two or more stockholders sharing the same address a single copy of the proxy statement, unless CHAC has received contrary instructions from one or more of such stockholders. Upon written or oral request, CHAC will deliver a separate copy of the proxy statement to any stockholder at a shared address to which a single copy of the proxy statement was delivered and who wishes to receive separate copies in the future. Stockholders receiving multiple copies of the proxy statement may likewise request that CHAC deliver single copies of the proxy statement in the future. Stockholders may notify CHAC of their requests by contacting CHAC as follows:

Chardan Healthcare Acquisition Corp.
17 State St., Floor 21
New York, NY 10004
Attn: Jonas Grossman
Telephone: (646) 465-9000

RISK FACTORS

You should consider carefully the following risk factors, as well as the other information set forth in this proxy statement, before making a decision on the Business Combination.

Risks Related to BiomX’s Business, Technology and Industry

BiomX is a development-stage company with limited operating history and has incurred losses since its inception. BiomX anticipates that it will continue to incur increasing and significant losses for the foreseeable future.

BiomX is a development-stage biopharmaceutical company with limited operating history. BiomX has incurred losses in each year since its inception in 2015. As of June 30, 2019, BiomX’s accumulated deficit was $28.6 million, and BiomX expects to incur increasingly significant losses for the foreseeable future. Preclinical development and clinical trials and activities are costly. BiomX has devoted, and will continue to devote for the foreseeable future, substantially all of its resources to research and development and clinical trials for its product candidates. BiomX does not expect to generate any revenue from the commercial sales of its product candidates in the near term. For the six months ended June 30, 2019 and 2018, BiomX had losses from operations of $7.8 million and $5.1 million, respectively. For the years ended December 31, 2018 and 2017, BiomX had losses from operations of $12.5 million and $6.7 million, respectively. BiomX anticipates that its expenses will increase substantially if and as it:

•        continues to develop and conduct clinical trials with respect to its lead product candidate, BX001, and other product candidates in its pipeline;

•        initiates and continues research, preclinical and clinical development efforts for any future product candidates;

•        seeks to discover and develop additional product candidates and further expand its clinical product pipeline;

•        seeks marketing and regulatory approvals for any product candidates that successfully complete clinical trials;

•        requires the manufacture of larger quantities of product candidates for clinical development and, potentially, commercialization;

•        maintains, expands and protects its intellectual property portfolio;

•        expands its research and development infrastructure, including hiring and retaining additional personnel, such as clinical, quality control and scientific personnel;

•        establishes sales, marketing, distribution and other commercial infrastructure in the future to commercialize products for which it obtains marketing approval, if any; and

•        adds operational, financial and management information systems and personnel, including personnel to support its product development and commercialization and help it comply with its obligations as a subsidiary of a public company.

BiomX will need to raise additional capital to support its operations.

At June 30, 2019, BiomX had cash, cash equivalents and short-term deposits of $34.9 million, and it has had recurring losses from operations and negative operating cash flows since inception in 2015. BiomX may need to raise additional capital to support its operations and product development activities. In the near term, BiomX expects to continue to fund its operations and other development activities relating to additional product candidates from the cash held by CHAC, governmental grants and through future equity and debt financings. BiomX may also seek funds through arrangements with collaborators or others that may require it to relinquish rights to the product candidates that it might otherwise seek to develop or commercialize independently. If BiomX enters into a collaboration for one or more of its current or future product candidates at an earlier development stage, the terms of such a collaboration will likely be less favorable than if BiomX were to enter the collaboration in later stages or if BiomX commercialized the product independently. If BiomX raises additional funds through equity offerings, the

terms of these securities may include liquidation or other preferences that adversely affect its stockholders’ rights, or cause significant dilution to BiomX’s stockholders. If BiomX raises additional capital through debt financing, it would be subject to fixed payment obligations and may be subject to covenants limiting or restricting its ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends or acquiring or licensing intellectual property rights.

If additional capital is not available to BiomX when needed or on acceptable terms, BiomX may not be able to continue to operate its business pursuant to its business plan and may be required to delay its clinical development. While BiomX believes that its existing cash and cash equivalents, together with CHAC’s existing resources will be sufficient to fund its planned operations for at least the next 24 months, BiomX cannot provide assurances that its estimates are accurate, that its plans will not change or that changed circumstances will not result in the depletion of BiomX’s capital resources more rapidly than it currently anticipates.

Developing drugs and conducting clinical trials is expensive. BiomX’s future funding requirements will depend on many factors, including:

•        the costs, timing and progress of BiomX’s research and development and clinical activities;

•        manufacturing costs associated with BiomX’s targeted bacteriophage, or phage, therapies strategy and other research and development activities;

•        the terms and timing of any collaborative, licensing, acquisition or other arrangements that BiomX may establish;

•        employee-related expenses, as well as external costs such as fees paid to outside consultants;

•        the costs and timing of seeking regulatory approvals and related to compliance with regulatory requirements; and

•        the costs of filing, prosecuting, defending and enforcing any patent applications, claims, patents and other intellectual property rights;

There can be no assurance that sufficient funds will be available to BiomX when required or on acceptable terms, if at all. BiomX’s inability to obtain additional funds could have a material adverse effect on its business, financial condition and results of operations. Moreover, if BiomX is unable to obtain additional funds on a timely basis, there will be substantial doubt about BiomX’s ability to continue as a going concern and increased risk of insolvency and up to a total loss of investment by BiomX’s shareholders.

BiomX’s limited operating history may make it difficult to evaluate the success of its business to date and to assess its future viability.

Since inception in 2015, BiomX has devoted substantially all of its resources to developing product candidates with phage technology through its preclinical programs, building its intellectual property portfolio, developing its supply chain, planning its business, raising capital and providing general and administrative support for these operations. BiomX has not yet demonstrated its ability to successfully complete any clinical study or other pivotal clinical trials, obtain regulatory approvals, manufacture a commercial-scale product, or arrange for a third-party to do so on BiomX’s behalf, or conduct sales and marketing activities necessary for successful product commercialization. Additionally, BiomX expects its financial condition and operating results to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond BiomX’s control. Consequently, any predictions made about BiomX’s future success or viability may not be as accurate as they could be if BiomX had a longer operating history.

In addition, as an early-stage company, BiomX may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown circumstances. As BiomX advances its product candidates, it will need to transition from a company with a research focus to a company capable of supporting clinical development and if successful, commercial activities. BiomX may not be successful in such a transition.

BiomX has never generated any revenue from product sales and may never be profitable or, if achieved, may not sustain profitability.

BiomX’s ability to generate meaningful revenue and achieve profitability depends on its ability, and the ability of any third party with which BiomX may partner, to successfully complete the development of, and meet regulatory requirements, including (but not limited to) obtaining any necessary regulatory approvals, to commercialize BiomX’s product candidates. BiomX does not currently meet regulatory requirements or have the required approvals to market its product candidates and may never meet or receive them. BiomX does not anticipate generating revenue from product sales for the foreseeable future, if ever. If any of BiomX’s product candidates fail in clinical trials or if any of BiomX’s product candidates do not meet regulatory requirements, including gaining regulatory approval when needed, or if any of BiomX’s product candidates, if marketed, fail to achieve market acceptance, BiomX may never become profitable. Even if BiomX achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. BiomX’s ability to generate future revenue from product sales depends heavily on its success in:

•        completing research and preclinical and clinical development of its product candidates;

•        seeking and obtaining regulatory and marketing approvals for product candidates for which it completes clinical trials;

•        meeting regulatory requirements for marketing the products;

•        developing a sustainable, scalable, reproducible, and transferable manufacturing process for its product candidates;

•        launching and commercializing product candidates for which it obtains regulatory and marketing approval or is otherwise permitted to market, either by establishing a sales force, marketing and distribution infrastructure or by collaborating with a partner;

•        obtaining market acceptance of any approved products;

•        addressing any competing technological and market developments;

•        implementing additional internal systems and infrastructure, as needed;

•        identifying and validating new product candidates;

•        negotiating favorable terms in any collaboration, licensing or other arrangements into which it may enter;

•        maintaining, protecting and expanding its portfolio of intellectual property rights, including patents, trade secrets and know-how; and

•        attracting, hiring and retaining qualified personnel.

Even if one or more of the product candidates that BiomX develops is approved for commercial sale or otherwise permitted for marketing, BiomX anticipates incurring significant costs associated with commercializing any approved product. BiomX’s expenses could increase beyond expectations if it is required by the U.S. Food and Drug Administration (“FDA”), the European Medicines Agency (“EMA”) or other equivalent foreign regulatory agencies to perform clinical trials and other studies in addition to those that it currently anticipates. Even if BiomX is able to generate revenue from the sale of any approved products, BiomX may not become profitable and may need to obtain additional funding to continue operations. If BiomX fails to become profitable, or if BiomX is unable to fund its continuing losses, its business, financial condition and results of operations may be materially adversely impacted.

BiomX is seeking to develop product candidates using phage technology, an approach for which is difficult to predict the time and cost of development. To BiomX’s knowledge, no bacteriophage has thus far been sold as a cosmetic or approved as a drug in the United States or in the European Union.

BiomX is developing its product candidates with phage technology. BiomX has not, nor to BiomX’s knowledge has any other company, sold its product candidates as cosmetics or received regulatory approval from the FDA or equivalent foreign regulatory agencies for a product based on this approach. While in vitro and in vivo

studies have characterized the behavior of phage in cell cultures and animal models and there exists a body of literature regarding the use of phage therapy in humans, the safety and efficacy of phage therapy in humans has not been extensively studied in well-controlled modern clinical trials. Most of the prior research on phage-based therapy was conducted in the former Soviet Union prior to and immediately after World War II and lacked appropriate control group design or lacked control groups at all. Furthermore, the standard of care has changed substantially during the ensuing decades since those studies were performed, diminishing the relevance of prior claims of improved cure rates. Any product candidates that BiomX develops may not demonstrate in patients the therapeutic properties ascribed to them in laboratory and other preclinical studies, and they may interact with human biological systems in unforeseen, ineffective or even harmful ways. BiomX cannot be certain that its approach will lead to the development of approvable or marketable products. Furthermore, the bacterial targets of phage may develop resistance to BiomX’s product candidates over time, which BiomX may or may not be able to overcome with the development of new phage cocktails or BiomX may not be able to construct a cocktail with sufficient coverage of its target pathogen universe.

If BiomX’s product candidates receive regulatory approval but do not achieve an adequate level of acceptance by physicians, healthcare payors and patients, BiomX may not generate product revenue sufficient to attain profitability. BiomX’s success will depend upon physicians who specialize in the treatment of diseases targeted by the BiomX’s product candidates that it pursues as drugs, prescribing potential treatments that involve the use of BiomX’s product candidates in lieu of, or in addition to, existing treatments with which they are more familiar and for which greater clinical data may be available. BiomX’s success will also depend on consumer acceptance and adoption of its products that it commercializes. Adverse events in preclinical studies and clinical trials of BiomX’s product candidates or in clinical trials of others developing similar products and the resulting publicity, as well as any other adverse events in the field of phage therapeutics, could result in a decrease in demand for any product that BiomX may develop. The degree of market acceptance of any approved products will depend on a number of factors, including:

•        the effectiveness of the product;

•        the prevalence and severity of any side effects;

•        potential advantages or disadvantages over alternative treatments;

•        relative convenience and ease of administration;

•        the strength of marketing and distribution support;

•        the price of the product, both in absolute terms and relative to alternative treatments; and

•        sufficient third-party coverage or reimbursement.

Developing BiomX’s product candidates on a commercial scale will require substantial technical, financial and human resources. BiomX and its third-party collaborators may experience delays in developing manufacturing capabilities for BiomX’s product candidates, and may not be able to do so at the scale required to efficiently conduct the clinical trials required to obtain regulatory approval of those of BiomX’s product candidates that require it, or to manufacture commercial quantities of BiomX’s products, if approved or otherwise permitted to be marketed.

BiomX is considering marketing its lead candidate product — BX001 — as a cosmetic, although this positioning also presents some challenges, as explained in the risk factors below.

Depending in part on how BX001 is marketed, it may be classified as a cosmetic or a drug or as something else by the FDA and equivalent foreign regulatory agencies. There are fewer requirements to market cosmetics in the United States; however, if BiomX attempts to market as a cosmetic and the FDA disagrees with its classification, BiomX may be required to stop marketing the product to pursue approval as a drug and not market the product again until BiomX receives such approval, which it may not receive.

The FDA and equivalent foreign regulatory agencies regulate products largely by their intended uses, but may also consider the ingredients of the product. At the current time, such agencies have not approved a new drug application (“NDA”) or a Biologics License Application (“BLA”) for a phage product. Products intended to beautify, moisturize, cleanse, or change one’s appearance may be regulated as cosmetics. Products intended to diagnose, prevent, cure or mitigate a disease or condition are regulated as drugs (or in some cases, as medical devices).

A premarket approval process is not required for cosmetic products. Manufacturers of cosmetics must test for and assure that finished products and all ingredients are safe prior to marketing them in the United States or the European Union, and claims may not be made that the product prevents, mitigates or cures a condition or disease. Products that claim to treat acne are generally regulated as drugs in the United States and the European Union. In the United States, drug products must either be approved through one of several FDA drug approval pathways or, in the case of some over-the-counter (“OTC”) drugs, meet the monograph criteria established by U.S. regulation. Similarly, in the European Union, drugs must be approved by the national regulatory authority or the European Commission before being placed on the national or European market.

If BiomX markets BX001 as a cosmetic, BiomX will not be able to promote the product for the treatment of acne, and its main claims would be limited to those that are consistent with permitted cosmetic claims, to beautify, moisturize, cleanse or change the appearance of the skin such as “for beautiful, bright skin” and similar claims. If BiomX markets the product as a cosmetic, it is possible that the FDA or equivalent foreign regulatory agencies will disagree with BiomX and find that the product should be marketed as a drug. Although the FDA or equivalent foreign regulatory agencies have not affirmatively decided the regulatory status of phages, given that their function is antibacterial, it is possible that the such agencies will decide that products containing phages are drugs regardless of the claims presented on the product or any other considerations. If the FDA evaluates BX001 and determines that the product is a drug and marketing it as a cosmetic is a prohibited act under the Food, Drug, and Cosmetic Act, it may issue a Warning Letter and demand that BiomX stop marketing the product unless and until the product is approved as a drug. If the FDA issues a Warning Letter, it will be made available on the FDA’s website, and BiomX may suffer reputational damage. The same applies to the national competent authorities in the European Union. There is the risk that if BiomX goes to market with BX001 as a cosmetic, potential competitors will bring the FDA’s or equivalent foreign regulatory authorities’ attention to the marketing of BX001 as a cosmetic to encourage the FDA or equivalent foreign regulatory authorities to take this very type of enforcement action against BiomX.

It is possible that the regulatory requirements or framework will change by the time BiomX is ready to market its product and these changes may eliminate the possibility of marketing BX001 as a cosmetic. For example, the FDA could affirmatively determine that phages are to be regulated as drugs and are not permitted in cosmetic products. If this were to occur, then BX001 would need to be approved as a drug in order to be marketed in the United States and would need to be approved as an OTC drug rather than a prescription drug in order to be sold in products that are also cosmetics. The same applies in the European Union.

Depending on the regulatory environment and requirements at the time BX001 is ready for market, BiomX may decide that pursuing a drug approval (either prescription or OTC) is the better pathway to market, in which case, it will take longer to bring BX001 to market in the United States and in other countries. And in this case, all other risks generally related to approval pathways would also be applicable to BX001.

Finally, even if BiomX is permitted to market BX001 as a cosmetic in one country, this does not guarantee that BiomX will be permitted to market BX001 as a cosmetic in other countries. Each country has its own distinct requirements for marketing products as cosmetics and BX001 would need to independently meet each jurisdiction’s requirements.

Regulatory requirements for development of BiomX’s lead product candidate, BX001, are uncertain and evolving. Changes in these laws or the current interpretation or application of these laws would have a significant adverse impact on BiomX’s ability to develop and commercialize BX001.

BiomX intends to develop its lead product candidate, BX001 initially as a cosmetic gel designed to improve the appearance of acne-prone skin. BX001 contains known cosmetic ingredients combined with phages that are designed to help control the growth of P. acnes, and thereby help improve the appearance of acne-prone skin.

In the European Union, a product candidate is considered to be a cosmetic if it is intended to and presented as protecting the skin, maintaining the skin in good condition or improving the appearance of the skin, provided that it is not a medicinal product due to its composition. With regard to the ingredients, in the European Union, the composition of a cosmetic may not be such that it has a significant effect on the body through a pharmacological, immunological or metabolic mode of action. No test has been determined yet for the significance of the effect. By contrast, a product candidate is a drug if it is intended to or presented as treating or preventing a disease or restoring,

correcting or modifying significantly physiological functions by a pharmacological, immunological or metabolic action. However, in the European Union, medical or biocidal (i.e. antibacterial) claims may be made for cosmetics, provided that they are ancillary to the cosmetic claims. As a result, BiomX believes that it may develop BX001 as a cosmetic, including conducting non-investigational new drug (“IND”) human clinical studies in order to evaluate safety, tolerability and biomarkers for non-drug applications.

Some countries also regulate other categories of products that could be relevant such as biocides in the European Union.

Unlike medicinal products, cosmetic products are generally not subject to premarket approval by regulatory agencies. They however must not contain certain ingredients or concentrations of ingredients and must be safe and properly labeled in relation to their cosmetic purpose. It remains unclear whether phages are authorized for use in cosmetic products, in the United States, the European Union and other countries.

Moreover, the FDA or equivalent foreign regulatory agencies may determine that BX001 is not governed by cosmetics regulations but by pharmaceutical regulations and, therefore may classify BX001 as being ineligible for use in clinical studies without a regulatory approval. A determination that BX001 does not meet the regulatory cosmetic requirements of the FDA or equivalent foreign regulatory agencies could cause a delay in the commercialization of BX001, which may lead to reduced acceptance by the public or others. Any such determination could prevent BiomX’s reliance on existing regulatory frameworks to conduct non-IND human clinical studies for BX001 and could significantly increase the cost of and delay the commercialization of BX001.

Should BiomX choose to develop and commercialize BX001 as a cosmetic and if the FDA or equivalent foreign regulatory agencies determine BX001 falls outside the cosmetics regulations, the agency could ask BiomX to withdraw BX001 from the market. In addition, if new safety issues are raised by cosmetic clinical studies for BX001, then BiomX’s ability to seek an IND to conduct clinical trials intended to lead toward approval of the product as a drug, if pursued, could be adversely affected, for example the FDA or equivalent foreign regulatory agencies could ask BiomX to modify approved labeling for or withdraw BX001 from the market.

BiomX is seeking to develop product candidates to improve the appearance of acne-prone skin and treat medical conditions related to the presence of certain bacteria. BiomX’s success is largely dependent on a broad degree of market acceptance, and in the case of drug products, physician adoption and use, which are necessary for commercial success.

Even if Biomx obtains FDA or foreign regulatory approvals for its drug product candidates, or BX001 is permitted to be marketed as a cosmetic, the commercial success of BiomX’s product candidates will depend on consumer acceptance and adoption of products that BiomX commercializes. Adverse events in preclinical studies and clinical trials of BiomX’s product candidates or in clinical trials of others developing similar products and the resulting publicity could result in a decrease in demand for any product that BiomX may develop.

In addition, the commercial success of BiomX’s drug product candidates will depend significantly on their broad adoption and use by dermatologists, pediatricians and other physicians for approved therapeutic indications, as well as any other indications for which BiomX may seek approval. Biomx cannot be certain that its approach will lead to the development of approvable or marketable products.

Obtaining high titers for specific phage cocktails necessary for BiomX’s preclinical and clinical testing may be difficult and time-consuming.

BiomX’s product candidates are phage cocktails that it has designed to meet specific characteristics. BiomX and BiomX’s contract manufacturers produce a cocktail of multiple phage and it may be difficult or time-consuming to achieve high titers, or levels, of phage sufficient for BiomX’s preclinical and clinical testing. In some cases, it may require multiple product runs in order for BiomX to obtain the amounts necessary for its clinical testing. This may result in delays in BiomX’s clinical trial timelines, and it may increase production costs and associated expenses. Also, it may be difficult to reproduce the manufacturing process to the extent that more significant quantities are required as BiomX’s product candidates advance through the clinical development process.

BiomX’s product candidates must undergo clinical testing which may fail to demonstrate the requisite safety and tolerability for cosmetics, safety and efficacy for drug products, or safety, purity, and potency for biologics, and any of BiomX’s product candidates could cause adverse effects, which would substantially delay or prevent regulatory approval and/or commercialization.

Before BiomX can obtain regulatory approval for a product candidate or otherwise obtain evidence allowing BiomX to market the product, it must undertake extensive preclinical and clinical testing in humans to demonstrate safety and efficacy to the satisfaction of the FDA or other regulatory agencies. Clinical trials of product candidates sufficient to obtain regulatory marketing approval or otherwise demonstrate safety prior to marketing, are expensive and take years to complete, especially for the BiomX product candidate designed to treat colorectal cancer as the phage will be genetically modified, which could make the conduct of clinical trials more complex. Furthermore, results from these clinical trials may not show safety or efficacy of BiomX’s product candidates sufficient to lead to approval, or to warrant further development. For example, BiomX’s approach is intended to design phage combinations, or cocktails, to target specific strains of pathogenic bacteria in order to alter microbiome composition and confer potential therapeutic or cosmetic benefit to patients. However, there can be no assurance that the eradication of the selected targets will result in a clinically meaningful effect on the underlying disease, such as in cases where the pathology of the disease is not well-defined. In addition, the bacteria that BiomX targets may be associated with the disease, but may not be causative or contributive to the pathology of the disease, or there may be other bacteria that BiomX’s product candidates do not target that are more meaningful drivers of the underlying disease. In addition, BiomX’s product candidates require the use of effective delivery vehicles to reach the target organ or tissue, and there can be no assurance that BiomX’s intended delivery systems will allow it product candidates to reach the desired locations in a patient. Safety must first be established through preclinical testing and early clinical trials, before efficacy can be evaluated and established and thereby lead to FDA or other regulatory agencies marketing approval. BiomX’s clinical trials may produce undesirable side effects or negative or inconclusive results, and BiomX may decide, or regulators may require it, to conduct additional clinical and/or preclinical testing or to abandon programs.

If BiomX is not able to obtain, or if there are delays in obtaining, required regulatory approvals for its product candidates for therapeutic indications, BiomX will not be able to commercialize, or will be delayed in commercializing, its product candidates, and its future ability to generate revenue will be materially impaired.

BiomX’s product candidates and the activities associated with their development and commercialization for therapeutic indications, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale, distribution, import and export are subject to regulation by the FDA and other regulatory agencies in the United States and by equivalent foreign regulatory authorities. Before BiomX can commercialize any of its product candidates for therapeutic indications, BiomX must obtain marketing approval. BiomX has not received approval to market any of its product candidates from regulatory authorities in any jurisdiction, and it is possible that none of BiomX’s product candidates or any product candidates it may seek to develop in the future will ever obtain regulatory approval.

The process of obtaining regulatory approvals for therapeutic indications, both in the United States and in other countries, is expensive, may take many years if additional clinical trials are required, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted IND, NDA or equivalent application types, may cause delays in the approval or rejection of an application. The FDA and equivalent foreign regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that BiomX’s data is insufficient for approval and require additional preclinical, clinical or other studies. BiomX’s product candidates could be delayed in receiving, or fail to receive, regulatory approval for many reasons, including the following:

•        the FDA or equivalent foreign regulatory authorities may disagree with the design, including study population, dose level, dose regimen, and bioanalytical assay methods, or implementation of BiomX’s clinical trials;

•        BiomX may be unable to demonstrate to the satisfaction of the FDA or equivalent foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication or a related companion diagnostic is suitable to identify appropriate patient populations;

•        the results of clinical trials may not meet the level of statistical significance required by the FDA or equivalent foreign regulatory authorities for approval;

•        BiomX may be unable to demonstrate that a drug product candidate’s clinical and other benefits outweigh its safety risks;

•        the FDA or equivalent foreign regulatory authorities may disagree with BiomX’s interpretation of data from preclinical studies, non-IND human clinical studies or clinical trials;

•        the data collected from clinical trials of BiomX’s product candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere;

•        the FDA or equivalent foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which BiomX contracts for clinical and commercial supplies; and

•        the approval policies or regulations of the FDA or equivalent foreign regulatory authorities may significantly change in a manner rendering BiomX’s clinical data insufficient for approval.

Of the large number of drugs in development, only a small percentage successfully complete the FDA or equivalent foreign regulatory approval processes and are commercialized. The lengthy approval process as well as the unpredictability of future clinical trial results may result in BiomX failing to obtain regulatory approval to market its product candidates, which would significantly harm BiomX’s business, results of operations and prospects.

The FDA may also require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support approval for therapeutic indications. The opinion of the Advisory Committee, although not binding, may have a significant impact on our ability to obtain approval of any product candidates that we develop based on the completed clinical trials. In the European Union, the safety and efficacy data of BiomX’s product candidate for treatment of colorectal cancer will be reviewed by the EMA’s Committee for Advanced Therapies (“CAT”), a group of experts in advanced therapy medicinal products. BiomX’s other product candidates would be reviewed by CAT as well if the EMA were to consider that they also qualify as advanced therapy medicinal products.

Moreover, under the Pediatric Research Equity Act (“PREA”), in the United States, and the Paediatric Regulation, in the European Union, the FDA or equivalent foreign regulatory authority could require mandatory testing in the pediatric population. Applications for approval in the United States or in the European Union must contain data to assess the safety and efficacy of the biologic for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA or equivalent foreign regulatory authority may, in its discretion, grant full or partial waivers, or deferrals, for submission of data in pediatric subjects. If the FDA requires data in pediatric patients, significantly more capital will have to be invested in order to conduct the mandatory pediatric clinical trials and studies, but the approval of the medicinal products for the adult population should normally not be affected. If the results of such pediatric studies are not positive, BiomX’s product candidates will not be approved for children.

In addition, even if BiomX were to obtain approval, regulatory authorities may approve any of its product candidates for fewer or more limited therapeutic indications than BiomX requests, may include limitations for use or contraindications that limit the suitable patient population, may not approve the price BiomX intends to charge for its products, may grant approval contingent on the performance of costly post-marketing clinical trials or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate. Any of the foregoing scenarios could materially harm the commercial prospects for BiomX’s product candidates.

If BiomX experiences delays in obtaining approval or if it fails to obtain approval of its product candidates, the commercial prospects for its product candidates may be harmed and its future ability to generate revenues will be materially impaired.

Results from preclinical studies of BiomX’s product candidates BX001 and BX002 may not be predictive of the results of clinical trials or later stage clinical development.

Preclinical studies of BiomX’s product candidates BX001 and BX002, including studies in animal disease models in the case of BX002 may not accurately predict the safety of the product candidate such that further human clinical trials would be allowed to proceed. In particular, promising preclinical testing suggesting the potential efficacy of prototype phage products may not predict the ability of these products to address conditions in the human clinical settings. For example, while BiomX has studied phage activity in vitro and in vivo, in the case of BX002, these results may not be replicated when BiomX’s phage cocktails are administered to human subjects. Despite promising data in any preclinical studies, BiomX’s phage technology may be found not to be efficacious when studied in clinical trials.

To satisfy FDA or equivalent foreign regulatory approval standards, BiomX must demonstrate safety for any cosmetic product, and it must demonstrate in adequate and well controlled clinical trials that its drug product candidates are safe and effective for their intended use. Success in preclinical testing and early-stage clinical trials does not ensure that later clinical trials will be successful. BiomX’s initial results from preclinical testing also may not be confirmed by later analysis or subsequent larger clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials, and most product candidates that commence clinical trials are never approved for commercial sale.

For products that require regulatory approvals, BiomX is subject to significant regulatory approval requirements, which could delay, prevent or limit BiomX’s ability to market its product candidates.

BiomX’s research and development activities, preclinical studies, clinical trials and the anticipated manufacturing and marketing of its drug product candidates are subject to extensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in Europe and elsewhere. To satisfy FDA or equivalent foreign regulatory approval standards, BiomX must demonstrate in adequate and well controlled clinical trials that its drug product candidates are safe and effective for their intended use. The regulatory approval process is expensive and time-consuming, and the timing of receipt of regulatory approval is difficult to predict. Given the uncertainties around phage therapy, BiomX’s product candidates could require a significantly longer time to gain regulatory approval than expected, or may never gain approval. This is especially so for the product candidate designed to treat colorectal cancer as the phage will be genetically modified, which adds potential complexity to the process, particularly in the European Union. BiomX cannot be certain that, even after expending substantial time and financial resources, it will obtain regulatory approval for any of its product candidates. A delay or denial of regulatory approval could delay or prevent BiomX’s ability to generate product revenue and to achieve profitability.

The legal and regulatory status of phage therapy remains unclear in many countries, including the European Union. Changes in regulatory approval policies during the development period of any of BiomX’s product candidates, changes in, or the enactment of, additional regulations or statutes, or changes in regulatory review practices for a submitted product application may cause a delay in obtaining approval or result in the rejection of an application for regulatory approval.

Regulatory approval, if obtained, may be made subject to limitations on the indicated uses for which BiomX may market a product, as well as the approved labeling for the product. These limitations could adversely affect BiomX’s potential product revenue. Regulatory approval may also be conditioned on costly post-marketing follow-up studies. In addition, the labeling, packaging, adverse event reporting, storage, advertising, promotion and recordkeeping related to the product will be subject to extensive ongoing regulatory requirements. Furthermore, for any marketed product, its manufacturer and its manufacturing facilities will be subject to registration and listing requirements and continual review and periodic inspections by the FDA or other regulatory authorities. Failure to comply with applicable regulatory requirements may, among other things, result in fines, suspensions of regulatory approvals, product recalls, product seizures, operating restrictions and criminal prosecution.

If BiomX encounters difficulties enrolling patients in its clinical trials, BiomX’s clinical development activities could be delayed or otherwise adversely affected.

Completion of clinical trials depends, among other things, on BiomX’s ability to enroll a sufficient number of patients, which is a function of many factors, including:

•        the therapeutic endpoints chosen for evaluation;

•        the eligibility criteria defined in the protocol;

•        the perceived benefit of the product candidate under study;

•        the size of the patient population required for analysis of the clinical trial’s therapeutic endpoints;

•        BiomX’s ability to recruit clinical trial investigators and sites with the appropriate competencies and experience;

•        BiomX’s ability to obtain and maintain patient consents; and

•        competition for patients from clinical trials for other treatments.

BiomX may experience difficulties in enrolling patients in its clinical trials, which could increase the costs or affect the timing or outcome of these clinical trials. This is particularly true with respect to diseases with relatively small patient populations. In addition, potential patients for BiomX’s trials may not be adequately diagnosed or identified with the diseases that BiomX is targeting or may not meet the entry criteria for BiomX’s studies.

BiomX may not be able to initiate or continue clinical trials if it is unable to locate a sufficient number of eligible patients to participate in the clinical trials required by the FDA or equivalent foreign regulatory agencies. In addition, the process of finding and diagnosing patients may prove costly. BiomX’s inability to enroll a sufficient number of patients for any of its clinical trials would result in significant delays or may require BiomX to abandon one or more clinical trials.

Delays in BiomX’s clinical trials could result in BiomX not achieving anticipated developmental milestones when expected, increased costs and delays in BiomX’s ability to obtain regulatory approval for and commercialization of BiomX’s product candidates.

Delays in BiomX’s ability to commence its clinical trials could result in BiomX not meeting anticipated clinical milestones and could materially impact BiomX’s product development costs and delay regulatory approval of BiomX’s product candidates. For example, BiomX plans to initiate Phase 1 clinical trials to explore the safety and tolerability of BX002 in 2020. However, planned clinical trials may not be commenced or completed on schedule, or at all.

Clinical trials can be delayed for a variety of reasons, including:

•        delays in the development of manufacturing capabilities for BiomX’s product candidates to enable their consistent production at clinical trial scale;

•        failures in BiomX’s internal manufacturing operations that result in BiomX’s inability to consistently and timely produce bacteriophages in sufficient quantities to support BiomX’s clinical trials;

•        the availability of financial resources to commence and complete BiomX’s planned clinical trials;

•        delays in reaching a consensus with clinical investigators on study design;

•        delays in reaching a consensus with regulatory agencies on trial design or in obtaining regulatory approval to commence a trial;

•        delays in obtaining clinical materials;

•        slower than expected patient recruitment for participation in clinical trials;

•        regulatory constraints or injunctions (for example, from supervisory authorities in case of non-compliance with cybersecurity and data privacy laws);

•        failure by clinical trial sites, other third parties or BiomX to adhere to clinical trial agreements;

•        delays in reaching agreement on acceptable clinical trial agreement terms with prospective sites or obtaining institutional review board approval; and

•        adverse safety events experienced during BiomX’s clinical trials.

If BiomX does not successfully commence or complete its clinical trials on schedule, the price of BiomX’s common stock may decline. Significant preclinical or clinical trial delays could shorten any periods during which BiomX may have the exclusive right to commercialize BiomX’s product candidates or allow BiomX’s competitors to bring products to market before it does, potentially impairing BiomX’s ability to successfully commercialize its product candidates and harming its business and results of operations.

BiomX’s current or future product candidates may cause adverse effects that could halt their clinical development, prevent their approval or marketing, limit their commercial potential or result in significant negative consequences.

Adverse effects could occur and cause BiomX or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or equivalent foreign regulatory agencies. Similarly, such adverse effects would prevent marketing BX001 as a cosmetic. Results of BiomX’s trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

If adverse effects arise in the development of BiomX’s product candidates, BiomX, the FDA or equivalent foreign regulatory agencies, the Institutional Review Boards (“IRBs”) or independent ethics committees at the institutions in which BiomX’s studies are conducted, or the Data Safety Monitoring Board (“DSMB”) could suspend or terminate BiomX’s clinical trials or the FDA or equivalent foreign regulatory agencies could deny approval of BiomX’s product candidates for any or all targeted indications. Adverse events in studies with BX001 as a cosmetic may lead BiomX to stop its marketing.

BiomX intends to evaluate its product candidates for safety and tolerability in the form of Phase 1 clinical trials. None of BiomX’s product candidates have completed this testing to date, and BiomX intends to initiate the first human studies of BX001 in 2019. While BiomX’s current and future product candidates will undergo safety testing to the extent possible and, where applicable, under such conditions discussed with regulatory authorities, not all adverse effects of drugs can be predicted or anticipated. Unforeseen adverse effects could arise either during clinical development or, if such adverse effects are more rare, after BiomX’s products have been approved by regulatory authorities and the approved product has been marketed, resulting in the exposure of additional patients. For example, while BiomX screens its phages in attempts to minimize safety issues, there can be no assurance that BiomX will eliminate the risk of the appearance of virulence genes, antibiotic resistance genes, lysogenic genes, integrase genes, or other toxic genes in BiomX’s phages, or of adverse reactions to BiomX’s phages in a patient’s immune system. So far, BiomX has not demonstrated, and BiomX cannot predict, if ongoing or future clinical trials will demonstrate that any of its product candidates are safe in humans. Moreover, clinical trials of BiomX’s product candidates are conducted in carefully defined sets of patients who have agreed to enter into clinical trials. Consequently, it is possible that BiomX’s clinical trials may indicate an apparent positive effect of a product candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable adverse effects.

Ultimately, some or all of BiomX’s product candidates may prove to be unsafe for human use. Moreover, BiomX could be subject to significant liability if any volunteer or patient suffers, or appears to suffer, adverse health effects as a result of participating in its clinical trials. Any of these events could prevent BiomX from achieving or maintaining market acceptance of its product candidates and could substantially increase commercialization costs.

BiomX has not completed composition development of its product candidates.

The development of BiomX’s product candidates requires that BiomX isolate, select, optimize and combine a number of phages that target the desired bacteria for that product candidate. The selection of phages for any of BiomX’s product candidates is based on a variety of factors, including, without limitation, the ability of the selected phages, in combination, to successfully kill the targeted bacteria, the degree of cross-reactivity of the individual phages with the same part of the bacterial targets, the ability of the combined phages to satisfy regulatory

requirements, BiomX’s ability to manufacture sufficient quantities of the phages, intellectual property rights of third parties, and other factors. While BiomX has selected initial formulations of BX001 and BX002, there can be no assurance that these initial formulations will be the final formulations of these product candidates for commercialization if approved. If BiomX is unable to complete formulation development of its product candidates in the time frame that it has anticipated, then BiomX’s product development time lines, and the regulatory approval of BiomX’s product candidates, could be delayed.

BiomX must continue to develop manufacturing processes for its product candidates, and any delay in doing so, or BiomX’s inability to do so, would result in delays in BiomX’s clinical trials.

The manufacturing processes for BiomX’s product candidates, and the scale-up of such processes for clinical trials, may present challenges, and there can be no assurance that BiomX will be able to complete this work in a timely manner, if at all. Any delay in the development or scale-up of these manufacturing processes could delay the start of clinical trials and harm BiomX’s business. In order to scale-up BiomX’s manufacturing capacity, BiomX needs to either build additional internal manufacturing capacity, contract with one or more partners, or both. BiomX’s technology and the production process for BiomX’s equipment and tools are complex and BiomX may encounter unexpected difficulties in manufacturing its product candidates. For example, the manufacturing hosts that BiomX use to produce BiomX’s phages may contain one or more integrated phages in their genomes that, if BiomX are unable to remove, can present challenges in manufacturing of the produced phages. There is no assurance that BiomX will be able to continue to build manufacturing capacity internally or find one or more suitable partners, or both, to meet the necessary volume and quality requirements. Manufacturing and product quality issues may arise as BiomX increases the scale of its production. Any delay or inability in establishing or expanding BiomX’s manufacturing capacity could diminish BiomX’s ability to develop its product candidates.

In the third quarter of 2019, BiomX opened its own current Good Manufacturing Process (“cGMP”) manufacturing facility at its headquarters in Ness Ziona, Israel. BiomX’s facility must undergo ongoing inspections for compliance with cGMP regulations before the respective product candidates can be approved for use in clinical trials or commercialization. In the event this facility does not receive a satisfactory cGMP inspection for the manufacture of BiomX’s product candidates, BiomX may need to fund additional modifications to its manufacturing process, conduct additional validation studies or find alternative manufacturing facilities, any of which would result in significant cost to BiomX as well as a delay of up to several years in obtaining approval for such product candidate.

The manufacturing facility will be subject to ongoing periodic inspection for compliance with European, FDA and cGMP regulations. Compliance with these regulations and standards is complex and costly, and there can be no assurance that BiomX will be able to comply. Any failure to comply with applicable regulations could result in sanctions being imposed (including fines, injunctions and civil penalties), failure of regulatory authorities to grant marketing approval of BiomX’s product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecution.

If BiomX’s competitors are able to develop and market products that are more effective, safer or more affordable than BiomX’s, or obtain marketing approval before BiomX does, BiomX’s commercial opportunities may be limited.

Competition in the biotechnology and pharmaceutical industries is intense and continues to increase. Some companies that are larger and have significantly more resources than BiomX are aggressively pursuing development programs for indications that BiomX is pursuing, including traditional therapies and therapies with novel mechanisms of action. In addition, other companies are developing phage-based products for therapeutic and non-therapeutic uses, and may elect to use their expertise in phage development and manufacturing to try to develop products that would compete with BiomX’s products.

BiomX also faces potential competition from academic institutions, government agencies and private and public research institutions engaged in the discovery and development of drugs and therapies. Many of BiomX’s competitors have significantly greater financial resources and expertise in research and development, preclinical testing, conducting clinical trials, obtaining regulatory approvals, manufacturing, sales and marketing than BiomX does. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established pharmaceutical companies.

In the European Union, potential competition also comes from medicinal preparations made by hospitals or pharmacists and administered without marketing authorizations, generally referred to as “compounding.” In some member states, national authorities generally promote compounding in order to reduce healthcare expenses.

BiomX’s competitors may succeed in developing products that are more effective, have fewer side effects and are safer or more affordable than BiomX’s product candidates, which would render BiomX’s product candidates less competitive or noncompetitive and would prevent the granting or maintenance of an orphan designation. These competitors also compete with BiomX to recruit and retain qualified scientific and management personnel, establish clinical trial sites and patient registration for clinical trials, as well as to acquire technology and technology licenses complementary to BiomX’s programs or advantageous to BiomX’s business. Moreover, competitors that are able to achieve patent protection, obtain regulatory approvals and commence commercial sales of their products before BiomX does, and competitors that have already done so may enjoy a significant competitive advantage.

BX001 faces significant competition in the market.

The facial aesthetic market is highly competitive and dynamic, and is characterized by rapid and substantial technological development and product innovations. If BX001 can be marketed as a cosmetic, it may face significant competition from other facial aesthetic products. Due to less stringent regulatory requirements, there are many more possibilities for marketing cosmetics in international markets than there are in the United States. There are also fewer limitations on the claims that BiomX’s competitors in international markets can make about the effectiveness of their products and the manner in which they can market them. As a result, if BiomX partners with other companies in these markets and launches its products, it may face more competition in these markets than in the United States.

Legal requirements as well as ethical and social concerns about synthetic biology and genetic engineering could limit or prevent the use of BiomX’s technologies and limit BiomX’s revenues.

BiomX’s technology may include the use of synthetic biology and genetic engineering. In some countries, drugs made using genetically modified organisms may be subject to a more stringent legal regime, which could prove to be complex and very challenging, especially for a small life sciences company. For example, in the European Union, the rules on genetically modified organisms would apply in addition to the general rules on medicinal products or cosmetic products. The rules on advanced therapy medicinal products may also apply.

Additionally, public perception about the safety and environmental hazards of, and ethical concerns over, synthetic biology and genetic engineering could influence public acceptance of BiomX’s technologies, product candidates and processes. If BiomX and its collaborators are not able to overcome the legal challenges as well as the ethical and social concerns relating to synthetic biology and genetic engineering, BiomX’s technologies, product candidates and processes may not be accepted. These challenges and concerns could result in increased expenses, regulatory scrutiny and increased regulation, trade restrictions on imports of BiomX’s product candidates, delays or other impediments to BiomX’s programs or the public acceptance and commercialization of BiomX’s products. BiomX designs and produces product candidates with characteristics comparable or superior to those found in naturally occurring organisms or enzymes in a controlled laboratory; however, the release of such organisms into uncontrolled environments could have unintended consequences. Any adverse effect resulting from such a release could have a material adverse effect on BiomX’s business, financial condition or results of operations, and BiomX may have exposure to liability for any resulting harm.

BiomX may not be successful in its efforts to identify or discover additional product candidates.

Although BiomX intends to utilize its technology to evaluate other therapeutic opportunities in addition to the product candidates that BiomX is currently developing, BiomX may fail to identify other product candidates for clinical development for a number of reasons. For example, BiomX’s research methodology may not be successful in identifying potential product candidates, or those BiomX identify may be shown to have harmful side effects or other characteristics that make them unmarketable or unlikely to receive regulatory approval. In addition, BiomX may not be able to identify phages that eradicate the target bacteria, including due to sourcing difficulties such as lack of diversity, inability to obtain samples in a timely manner or at all, or contamination in the samples. BiomX may also encounter difficulties in designing phage cocktails that meet the requirements of an investigational therapy, including due to the build-up of resistances in bacteria to BiomX’s phages, the range of host bacteria that are affected by BiomX’s phages, the variety of activity on different bacteria growth states, issues with toxicity in BiomX’s phages, and the stability, robustness and ease of manufacturing of BiomX’s product candidates. In addition, the designing of

synthetically engineered phages may fail to result in the development of phages with the desired characteristics or behaviors that are suitable for use as viable therapies, or may result in phages that contain undesired features such as immunogenicity, toxicity and other safety concerns.

A key part of BiomX’s strategy is to utilize its screening technology to identify product candidates to pursue in clinical development. If BiomX fails to identify and develop additional potential product candidates, BiomX may be unable to grow its business and its results of operations could be materially harmed. Such product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials and approval by the FDA and/or applicable foreign regulatory agencies. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development.

BiomX may expend its limited resources to pursue a particular product candidate or indication and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success.

Because BiomX has limited financial and managerial resources, BiomX intends to focus on developing product candidates for specific indications that BiomX identifies as most likely to succeed, in terms of both their potential for marketing approval and commercialization. As a result, BiomX may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial potential.

BiomX’s resource allocation decisions may cause it to fail to capitalize on viable commercial products or profitable market opportunities. BiomX’s spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates. If BiomX does not accurately evaluate the commercial potential or target market for a particular product candidate, BiomX may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for BiomX to retain sole development and commercialization rights to the product candidate.

BiomX’s success depends, in part, on its ability to retain key executives and to attract, retain and motivate qualified personnel.

BiomX is highly dependent on Jonathan Solomon, its CEO, as well as the other principal members of BiomX’s management, scientific and clinical team. Although BiomX has entered into employment agreements with its executive officers, each of them may terminate their employment with BiomX at any time. BiomX does not maintain “key person” insurance for any of its executives or other employees. The loss of the services of any of BiomX’s executive officers, other key employees, and other scientific and medical advisors, and BiomX’s inability to find suitable replacements could result in delays in product development and harm BiomX’s business.

BiomX’s continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel and BiomX’s ability to develop and maintain important relationships with leading academic institutions, clinicians and scientists is critical to BiomX’s success. Competition for qualified personnel in the biotechnology field is intense, particularly in Israel where BiomX’s headquarters are located. BiomX faces competition for personnel from other biotechnology and pharmaceutical companies, universities, public and private research institutions and other organizations. BiomX also faces competition from other more well-funded and well-established businesses and BiomX may also be viewed as a riskier choice from a job stability perspective due to BiomX’s relatively newer status than longer existing biotech and pharmaceutical companies. BiomX may not be able to attract and retain qualified personnel on acceptable terms given the competition for such personnel. If BiomX is unsuccessful in BiomX’s retention, motivation and recruitment efforts, BiomX may be unable to execute its business strategy.

There is a substantial risk of product liability claims in BiomX’s business. If BiomX does not obtain sufficient liability insurance, a product liability claim could result in substantial liabilities to it.

BiomX’s business exposes it to significant potential product liability risks that are inherent in the development, manufacturing and marketing of human therapeutic products. Regardless of merit or eventual outcome, product liability claims may result in:

•        delay or failure to complete BiomX’s clinical trials;

•        withdrawal of clinical trial participants;

•        decreased demand for BiomX’s product candidates;

•        injury to BiomX’s reputation;

•        litigation costs;

•        substantial monetary awards against BiomX; and

•        diversion of management or other resources from key aspects of BiomX’s operations.

If BiomX succeeds in marketing products, product liability claims could result in an FDA or equivalent foreign regulatory agency investigation of the safety or efficacy of BiomX’s products, its manufacturing processes and facilities or its marketing programs. Such investigation could also potentially lead to a recall of BiomX’s products or more serious enforcement actions, or limitations on the indications, for which they may be used, or suspension or withdrawal of approval.

BiomX has clinical trial insurance that covers its clinical trial for up to a $3.0 million annual per claim and aggregate limit. BiomX intends to expand its insurance coverage to include the sale of commercial products if marketing approval is obtained for BiomX’s product candidates or any other compound that BiomX may develop. However, insurance coverage is expensive and BiomX may not be able to maintain insurance coverage at a reasonable cost or at all, and the insurance coverage that BiomX obtain may not be adequate to cover potential claims or losses.

Failure to comply with health and data protection laws and regulations could lead to claims, government enforcement actions (which could include civil or criminal penalties), regulatory actions, private litigation and/or adverse publicity and could negatively affect BiomX’s operating results and business.

BiomX may be subject to federal, state and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and security). In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state consumer privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to BiomX’s operations or the operations of BiomX’s collaborators. In addition, BiomX may obtain health information from third parties (including research institutions from which BiomX obtains clinical trial data) that are subject to privacy and security requirements under the HIPAA (as defined below), as amended by HITECH (as defined below). Depending on the facts and circumstances, BiomX could be subject to criminal penalties if BiomX knowingly obtains, uses, or discloses individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

Additional requirements may also be imposed by international data protection laws. In this context, Regulation 2016/679, the General Data Protection Regulation (the “GDPR”) (in addition to many other international data protection laws) may have an impact on BiomX’s operations when it collects and/or process personal data of individuals located in the European Union. The GDPR has applied since May 25, 2018 (replacing previously applicable data protection frameworks) and has an extraterritorial reach. The GDPR allows members states to introduce specific requirements in relation to certain areas, including processing of special categories of data, and BiomX may face further restrictions and non-compliance risks under such national frameworks. BiomX has not yet assessed whether its activities might be caught by the GDPR.

Because of the types of data BiomX collects and processes, which may involve health, biometric and genetic data, BiomX may face high risks for non-compliance with the GDPR rules (or local declinations of GDPR-rules across the different European Union Member States), as these types of data are considered as special categories of data and are granted higher protection. The risks are further increased considering the diverging approach in the European Union as to the rules, requirements and frameworks in relation to the processing of personal data in clinical trials (in matters such as the choice of the legal basis for the processing of data, the possible uses of the personal data collected, etc.) and the interplay with other relevant frameworks. The GDPR introduced stringent data protection requirements in the European Union, as well as potential fines for non-compliant companies of up to the greater of €20 million or 4% of annual worldwide turnover. Supervisory authorities also have the ability to restrict BiomX’s processing activities if those are deemed not to be in compliance with the GDPR (or local declinations); this may significantly impact the way BiomX conducts its activities. The GDPR imposes numerous requirements for the collection, use and disclosure of personal data, including high standards for consent to be valid, and specific

information to be provided to individuals about how their personal data is used, the obligation to notify regulators and (in some cases) to communicate to affected individuals of personal data breaches, extensive new internal privacy governance requirements and obligations to allow individuals to exercise their strengthened privacy rights (e.g., the right to access, correct and delete their personal data, to withdraw their consent, etc.), and obligations when contracting with third parties such as service provides, CROs, etc. In addition, the GDPR includes restrictions on data transfers outside the European Economic Area (“EEA”). The actual mechanisms made available under GDPR to transfer such personal data have recently received heightened regulatory and judicial scrutiny. If BiomX cannot rely on existing mechanisms for transferring personal data from the EEA, the United Kingdom, or other jurisdictions, BiomX may be unable to transfer personal data in those regions. Further, the United Kingdom’s vote in favor of exiting the European Union, often referred to as “Brexit,” has created uncertainty as to whether or not the United Kingdom data protection legislation will depart from the GDPR and how data transfers to and from the United Kingdom will be regulated.

Compliance with U.S. and international data protection laws and regulations could require BiomX to take on more onerous obligations in BiomX’s contracts, restrict BiomX’s ability to collect, use and disclose data, or in some cases, impact BiomX’s ability to operate in certain jurisdictions. Such laws and regulations could limit BiomX’s ability to use and share personal or other data, thereby increasing BiomX’s costs and harming BiomX’s business and financial condition. Failure to comply with U.S. and international data protection laws and regulations could result in claims, government enforcement actions (which could include civil or criminal penalties), regulatory actions, private litigation and/or adverse publicity and could negatively affect BiomX’s operating results and business. Moreover, clinical trial subjects about whom BiomX or BiomX’s potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit BiomX’s ability to use and disclose the information. Claims that BiomX has violated individuals’ privacy rights, failed to comply with data protection laws, or breached BiomX’s contractual obligations, even if it is not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm BiomX’s business. Finally, BiomX may be required to disclose personal data pursuant to demands from government agencies, from law enforcement agencies, and from intelligence agencies. This disclosure may result in a failure or perceived failure by BiomX to comply with data privacy laws, rules, and regulations and could result in proceedings or actions against BiomX in the same or other jurisdictions, and could have an adverse impact on BiomX’s reputation and brand.

BiomX’s business and operations might be adversely affected by security breaches, including any cybersecurity incidents.

BiomX depends on the efficient and uninterrupted operation of its computer and communications systems, and those of its consultants, contractors and vendors, which BiomX uses for, among other things, sensitive company data, including its intellectual property, financial data and other proprietary business information.

While certain of BiomX’s operations have business continuity and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related interruptions, BiomX’s IT infrastructure and the IT infrastructure of its consultants, contractors and vendors are vulnerable to damage from cyberattacks, computer viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events. BiomX could experience failures in its information systems and computer servers, which could result in an interruption of its normal business operations and require substantial expenditure of financial and administrative resources to remedy. System failures, accidents or security breaches can cause interruptions in BiomX’s operations and can result in a material disruption of its targeted phage therapies, product candidates and other business operations. The loss of data from completed or future studies or clinical trials could result in delays in BiomX’s research, development or regulatory approval efforts and significantly increase BiomX’s costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, BiomX’s data or applications, or inappropriate disclosure of confidential or proprietary information, BiomX could incur regulatory investigations and redresses, penalties and liabilities and the development of its product candidates could be delayed or otherwise adversely affected.

Even though BiomX believes it carries commercially reasonable business interruption and liability insurance, BiomX might suffer losses as a result of business interruptions that exceed the coverage available under BiomX’s insurance policies or for which BiomX does not have coverage. For example, BiomX is not insured against terrorist attacks or cyberattacks. Any natural disaster or catastrophic event could have a significant negative impact on BiomX’s operations and financial results. Moreover, any such event could delay the development of BiomX’s product candidates.

BiomX’s employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

BiomX is exposed to the risk of employee fraud or other illegal activity by its employees, independent contractors, consultants, commercial partners and vendors. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to comply with the laws of the FDA and other similar foreign regulatory bodies, provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies, comply with manufacturing standards BiomX has established, comply with healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws or report financial information or data accurately or to disclose unauthorized activities to BiomX. If BiomX obtains FDA approval of any of its product candidates and begins commercializing those products in the United States, BiomX’s potential exposure under such laws will increase significantly, and BiomX’s costs associated with compliance with such laws are also likely to increase. These laws may impact, among other things, BiomX’s current activities with principal investigators and research patients, as well as proposed and future sales, marketing and education programs.

BiomX’s relationships with healthcare providers, physicians and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose BiomX to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products. Arrangements with third-party payors and customers can expose pharmaceutical manufacturers to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act (“FCA”) and foreign equivalent legislation, which may constrain the business or financial arrangements and relationships through which such companies sell, market and distribute pharmaceutical products. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. The applicable federal, state and foreign healthcare laws and regulations laws that may affect BiomX’s ability to operate include, but are not limited to:

•        the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution;

•        federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;

•        HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it;

•        HIPAA, as amended by HITECH and their respective implementing regulations, which impose, among other things, requirements on certain covered healthcare providers, health plans and healthcare clearinghouses, as well as their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions;

•        the federal Physician Payment Sunshine Act, created under the Patient Protection and Affordable Care Act and its implementing regulations, which require manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the United States Department of Health and Human Services information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;

•        federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

•        analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by nongovernmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts; and

•        European Union and other foreign provisions.

The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive recordkeeping, licensing, storage, security requirements intended to prevent the unauthorized sale of pharmaceutical products and, in some foreign countries, including the European Union countries, mandatory anti-counterfeit features.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from the business.

The failure to comply with any of these laws or regulatory requirements could subject BiomX to possible legal or regulatory action. Depending on the circumstances, failure to meet applicable regulatory requirements can result in civil, criminal and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of BiomX’s operations, as well as additional reporting obligations and oversight if BiomX becomes subject to a corporate integrity agreement or other agreement to resolve allegations of noncompliance with these laws. Any action for violation of these laws, even if successfully defended, could cause a pharmaceutical manufacturer to incur significant legal expenses and divert management’s attention from the operation of the business. Prohibitions or restrictions on sales or withdrawal of future marketed products could materially affect business in an adverse way.

The combined company will be subject to a code of business conduct and ethics, but it is not always possible to identify and deter employee misconduct, and the precautions the combined company takes to detect and prevent inappropriate conduct may not be effective in controlling unknown or unmanaged risks or losses or in protecting it from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. Efforts to ensure that the combined company’s business arrangements will comply with applicable healthcare laws may involve substantial costs. It is possible that governmental and enforcement authorities will conclude that the combined company’s business practices may not comply with current or future statutes, regulations or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against the combined company, and the combined company is not successful in defending itself or asserting its rights, those actions could have a significant impact on its’s business, including the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of the combined company’s operations, any of which could adversely affect its’s ability to operate its business and its results of operations. In addition, the approval and commercialization of any of the combined company’s product candidates outside the United States will also likely subject the combined company to foreign equivalents of the healthcare laws mentioned above, among other foreign laws.

The FDA and other equivalent foreign regulatory agencies may implement additional regulations or restrictions on the development and commercialization of products which act on the microbiome, which may be difficult to predict.

The FDA and equivalent foreign regulatory agencies in other countries have each expressed interest in further regulating biotechnology products and product candidates, such as those that act on the human microbiome. Agencies at both the federal and state level in the United States, as well as the U.S. congressional committees and other governments or governing agencies, have also expressed interest in further regulating the biotechnology industry. Such action may delay or prevent commercialization of some or all of BiomX’s product candidates. Adverse developments in non-IND human clinical studies or clinical trials of microbiome products conducted by others may cause the FDA or other oversight bodies to change the requirements for approval of any of BiomX’s product candidates. These regulatory review agencies and committees and the new requirements or guidelines they promulgate may lengthen the regulatory review process, require BiomX to perform additional studies or trials, increase BiomX’s development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of BiomX’s product candidates or lead to significant post-approval limitations or restrictions. As BiomX advances its product candidates, BiomX will be required to consult with these regulatory agencies and comply with applicable requirements and guidelines. If BiomX fails to do so, it may be required to delay or discontinue development of such product candidates. These additional processes may result in a review and approval process that is longer than BiomX otherwise would have expected. Delays as a result of an increased or lengthier regulatory approval process or further restrictions on the development of BiomX’s product candidates can be costly and could negatively impact BiomX’s ability to complete clinical trials and commercialize BiomX’s current and future product candidates in a timely manner if at all.

Exchange rate fluctuations between the U.S. Dollar, the New Israeli Shekel, the Euro and other foreign currencies, may negatively affect BiomX’s future revenues.

BiomX’s proceeds from sales of its securities are generally received in U.S. Dollars. BiomX’s headquarters are located in Israel, where the majority of BiomX’s general and administrative expenses and research and development costs are incurred in the New Israeli Shekel (the “NIS”). Future expenses may be incurred in foreign currencies such

as the Euro or British Pound. As a result, BiomX’s financial results may be affected by fluctuations in the exchange rates of currencies in the countries. For example, during 2017, BiomX witnessed a strengthening of the average exchange rate of the NIS against the U.S. Dollar, which increased the U.S. Dollar value of Israeli expenses. If the NIS strengthens against the U.S. Dollar, as it did in 2017, the U.S. Dollar value of BiomX’s Israeli expenses, mainly personnel and facility-related, will increase. To date, BiomX has not entered into any foreign currency hedging contracts to mitigate its exposure to foreign currency exchange risk. Although exposure to currency fluctuations to date has not had a material adverse effect on BiomX’s business, there can be no assurance that fluctuations in the future will not have a material adverse effect on BiomX’s operating results and financial condition.

If BiomX engages in future acquisitions or strategic partnerships, this may increase its capital requirements, dilute its stockholders, cause it to incur debt or assume contingent liabilities, and subject it to other risks.

BiomX may evaluate various acquisition opportunities and strategic partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies or businesses. Any potential acquisition or strategic partnership may entail numerous risks, including:

•        increased operating expenses and cash requirements;

•        the assumption of additional indebtedness or contingent liabilities;

•        the issuance of BiomX’s equity securities;

•        assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel;

•        the diversion of BiomX’s management’s attention from BiomX’s existing product programs and initiatives in pursuing such a strategic merger or acquisition;

•        retention of key employees, the loss of key personnel and uncertainties in BiomX’s ability to maintain key business relationships;

•        risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and marketing approvals; and

•        BiomX’s inability to generate revenue from acquired technology and/or products sufficient to meet its objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs.

Risks Related to Government Regulation

Breakthrough Therapy Designation or Fast Track Designation by the FDA, even if granted for any of BiomX’s product candidates developed for therapeutic indications, may not lead to a faster development, regulatory review or approval process, and it does not increase the likelihood that any of BiomX’s product candidates will receive marketing approval in the United States.

In the United States, BiomX may seek a Breakthrough Therapy Designation for some of its product candidates, including BX002 and/or BX003. A breakthrough therapy is defined as a therapy that is intended, alone or in combination with one or more other therapies, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the therapy may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. For therapies that have been designated as breakthrough therapies, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Therapies designated as breakthrough therapies by the FDA may also be eligible for priority review and accelerated approval. Designation as a breakthrough therapy is within the discretion of the FDA.

In the European Union, the PRIME (PRIority MEdicines) status is similar to the Breakthrough Therapy Designation. The EMA has implemented the PRIME status to support the development and accelerate the approval of complex, innovative medicinal products addressing an unmet medical need. The PRIME status enables early dialogue with the relevant EMA scientific committees and, possibly, some payors and thus reinforces the EMA’s

scientific and regulatory support. The PRIME status, which is granted at the EMA’s discretion, focuses on medicinal products the marketing authorization of which qualifies for accelerated assessment (medicinal products of major interest from a public health perspective, in particular from a therapeutic innovation perspective).

Accordingly, even if BiomX believes one of its product candidates meets the criteria for designation as a breakthrough therapy or for PRIME status, the FDA or EMA, respectively, may disagree and instead determine not to make such designation. In any event, the receipt of a Breakthrough Therapy Designation or PRIME status for a product candidate may not actually result in a faster development process, review or approval compared to therapies considered for approval under conventional procedures and does not assure ultimate approval. In addition, even if one or more of BiomX’s product candidates qualify as breakthrough therapies or is granted PRIME status, the FDA or EMA, respectively, may later decide that such product candidates no longer meet the conditions for qualification or decide that the time period for review or approval will not be shortened.

In the United States, BiomX may seek Fast Track Designation for some of its product candidates for therapeutic indications. If a therapy is intended for the treatment of a serious or life-threatening condition and the therapy demonstrates the potential to address unmet medical needs for this condition, the therapy sponsor may apply for Fast Track Designation. The FDA has broad discretion whether or not to grant this designation, so even if BiomX believes a particular product candidate is eligible for this designation; BiomX cannot assure you that the FDA would decide to grant it. Even if BiomX does receive Fast Track Designation, BiomX may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track Designation if it believes that the designation is no longer supported by data from BiomX’s clinical development program. Fast Track Designation alone does not guarantee qualification for the FDA’s priority review procedures.

Other countries may have adopted schemes designed to ensure an accelerated approval of drugs that are especially important for patients. For example, in the European Union, the EMA may agree to an accelerated assessment (150 days instead of 210 days) for medicinal products of major interest from a public health perspective, in particular from a therapeutic innovation perspective). Furthermore, competent regulatory authorities may grant market authorizations “under exceptional circumstances,” in cases where all the required safety and efficacy data have not been and will not be collected, to medicinal products designed for unmet needs or orphan medicinal products. Although a marketing authorization under exceptional circumstances is definitive, the risk-benefit balance of the medicinal product must be reviewed annually and the marketing authorization is withdrawn if it becomes negative. Moreover, under the centralized procedure, the European Commission may grant “conditional marketing authorizations” in cases where all the required safety and efficacy data are not yet available. The conditional marketing authorization is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures. It is valid for one year and has to be renewed annually until fulfillment of all the conditions. If the conditions are not fulfilled within the timeframe set by the EMA, the marketing authorization ceases to be renewed. As with Fast Track Designation, the competent regulatory authorities in the European Union have broad discretion whether or not to grant such an accelerated assessment or approval and, even if such assessment or approval is granted, BiomX may not experience a faster development process, review or approval compared to conventional procedures.

BiomX may seek a priority review designation for one or more of its other product candidates for therapeutic indications, but BiomX might not receive such designation, and even if it does, such designation may not lead to a faster development or regulatory review or approval process.

If the FDA determines that a product candidate offers a treatment for a serious condition and, if approved, the product would provide a significant improvement in safety or effectiveness, the FDA may designate the product candidate for priority review. A priority review designation means that the goal for the FDA to review an application is six months, rather than the standard review period of ten months. BiomX may request priority review for BiomX’s product candidates. The FDA has broad discretion with respect to whether or not to grant priority review status to a product candidate, so even if BiomX believe a particular product candidate is eligible for such designation or status, the FDA may decide not to grant it. Moreover, a priority review designation does not necessarily result in an expedited regulatory review or approval process or necessarily confer any advantage with respect to approval compared to conventional FDA procedures. Receiving priority review from the FDA does not guarantee approval within the six-month review cycle or at all.

BiomX may fail to obtain and maintain orphan drug designations from the FDA or equivalent foreign regulatory agencies for BiomX’s current and future therapeutic product candidates, as applicable.

BiomX’s strategy may include filing for the orphan drug designation where available for BiomX’s product candidates for therapeutic indications. BiomX currently believes that BX003 may qualify for such a designation in the United States, the European Union, and the other countries supporting the development and marketing of drugs for rare diseases.

In the United States, under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United States. In the United States, the orphan drug designation entitles a party to financial incentives, such as opportunities for grant funding toward clinical trial costs, tax advantages and user-fee waivers. In addition, if a product that has the orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug or biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the original manufacturer is unable to assure sufficient product quantity.

In addition, exclusive marketing rights in the United States may be limited if BiomX seeks approval for an indication broader than the orphan-designated indication or may be lost if the FDA later determines that the request for designation was materially defective, or if BiomX is unable to assure sufficient quantities of the product to meet the needs of patients with the orphan-designated disease or condition. Further, even if BiomX obtains orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties may receive and be approved for the same condition, and only the first applicant to receive approval will receive the benefits of marketing exclusivity. Even after an orphan-designated product is approved, the FDA can subsequently approve a later drug with the same active moiety for the same condition if the FDA concludes that the later drug is clinically superior if it is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. In addition, while BiomX may seek the orphan drug designation for its product candidates, BiomX may never receive such designation.

An orphan drug legal regime also exists in the European Union. The EMA’s Committee for Orphan Medicinal Products (“COMP”) gives opinions, and the European Commission takes decisions, on the granting of the orphan drug designation to the development of products that are intended for the diagnosis, prevention or treatment of (i) a life-threatening or chronically debilitating condition affecting not more than five in 10,000 persons in the European Economic Area (European Union plus Iceland, Liechtenstein and Norway); or (ii) a life-threatening, seriously debilitating or serious and chronic condition when, without incentives, it is unlikely that sales of the drug in the European Economic Area would be sufficient to justify the necessary investment in developing the drug or biological product. The granting of the orphan designation requires that there is no satisfactory method of diagnosis, prevention or treatment, or, if such a method exists, that the future medicine is to be of significant benefit to those affected by the condition. The test for that later condition is stringent, because the future product must be compared with all existing therapies for the rare condition, including surgical operations, already authorized medicinal products and compounded preparations (subject to certain conditions). At the time of marketing authorization, the orphan designation is reviewed again by the COMP in view of the maintenance of the orphan status. If the designation criteria are no longer met, the European Commission withdraws the orphan designation. Maintenance of the orphan designation at the time of marketing authorization means that all the drugs/biologicals authorized since the granting of the designation become relevant for determining the lack of satisfactory therapy or the significant benefit.

The orphan drug designation entitles the company to financial incentives, such as reductions of fees or fee waivers and 10 years of market exclusivity. Market exclusivity precludes the EMA or the national competent authorities from validating a marketing authorization application (“MAA”), and the European Commission or a national competent authority from granting a marketing authorization, for a same or similar drug/biological and the same therapeutic indication. The 10-year period may be reduced to six years if the orphan designation criteria

are no longer met, including where it is shown that the product is not sufficiently profitable to justify maintenance of market exclusivity. The orphan exclusivity may also be lost vis-à-vis another drug/biological in cases where the manufacturer is unable to assure sufficient quantity of the drug to meet patient needs or if that other product is proved to be clinically superior to the approved orphan product. A drug/biological is clinically superior if it is safer, more effective or makes a major contribution to patient care.

Even if BiomX receives regulatory approval of any product candidates for therapeutic indications, BiomX will be subject to ongoing regulatory compliance obligations and continued regulatory review, which may result in significant additional expense. Additionally, any of BiomX’s product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal, and BiomX may be subject to penalties if BiomX fails to comply with regulatory requirements or experience unanticipated problems with its product candidates.

If any of BiomX’s product candidates is approved for therapeutic indications, it will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, distribution, advertising, promotion, sampling, recordkeeping, export, import, conduct of post-marketing studies and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United States and requirements of equivalent foreign regulatory agencies. In addition, BiomX will be subject to continued compliance with cGMP and GCP requirements for any clinical trials that BiomX conducts post-approval.

Manufacturers and manufacturers’ facilities are required to comply with extensive FDA and equivalent foreign regulatory agency requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations. As such, BiomX and its contract manufacturers will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA, other marketing applications and previous responses to inspection observations. Accordingly, BiomX and others with whom BiomX work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.

The FDA or equivalent foreign regulatory agencies have significant post-marketing authority, including, for example, the authority to require labeling changes based on new safety information and to require post-marketing studies or clinical trials to evaluate serious safety risks related to the use of a drug. Any regulatory approvals that BiomX receives for its product candidates may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials and surveillance to monitor the safety and efficacy of the product candidate. The FDA or equivalent foreign regulatory agencies may also require a REMS program as a condition of approval of BiomX’s product candidates, which could entail requirements for long-term patient follow-up, a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. In addition, if the FDA or an equivalent foreign regulatory agency approves BiomX’s product candidates, BiomX will have to comply with requirements, including submissions of safety and other post-marketing information and reports and registration.

The FDA or equivalent foreign regulatory agencies may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with BiomX’s product candidates, including adverse events of unanticipated severity or frequency, or with BiomX’s third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements may result in revisions to the approved labeling to add new safety information, the imposition of post-market studies or clinical trials to assess new safety risks, or the imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

•        restrictions on the marketing or manufacturing of BiomX’s products, withdrawal of products from the market, or voluntary or mandatory product recalls;

•        fines, warning or untitled enforcement letters, or holds on clinical trials;

•        refusal by the FDA or equivalent foreign regulatory agencies to approve pending applications or supplements to approved applications filed by BiomX or the suspension or revocation of license approvals;

•        product seizure or detention or refusal to permit the import or export of BiomX’s product candidates; and

•        injunctions or the imposition of civil or criminal penalties.

The FDA or equivalent foreign regulatory agencies strictly regulate the marketing, labeling, advertising and promotion of drug products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label or other regulatory marketing pathway. The FDA and equivalent foreign regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. The policies of the FDA or equivalent foreign regulatory agencies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of BiomX’s product candidates. If BiomX is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if BiomX are not able to maintain regulatory compliance, BiomX may lose any marketing approval that BiomX may have obtained, which would adversely affect BiomX’s business, prospects and the ability to achieve or sustain profitability.

The policies of the FDA or equivalent foreign regulatory agencies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of BiomX’s product candidates. BiomX also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. For example, certain policies of the current administration may impact BiomX’s business and industry. Namely, the current administration has taken several executive actions, including the issuance of a number of executive orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities, such as implementing statutes through rulemaking, the issuance of guidance, and the review and approval of marketing applications. It is difficult to predict how these executive actions, including any executive orders, will be implemented and the extent to which they will impact the FDA’s ability to exercise its regulatory authority. If these executive actions impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, BiomX’s business may be negatively impacted. In addition, if BiomX is slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if BiomX are not able to maintain regulatory compliance, BiomX may lose any marketing approval that BiomX may have obtained, and BiomX may not achieve or sustain profitability.

Noncompliance by BiomX or any future collaborator with regulatory requirements, including safety monitoring or pharmacovigilance requirements, can also result in significant financial penalties.

BiomX may conduct clinical trials for its product candidates outside the United States, and the FDA may not accept data from such trials.

Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of such study data by the FDA is subject to certain conditions. For example, the study must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The study population must also adequately represent the United States population, and the data must be applicable to the United States population and United States medical practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical studies conducted outside of the United States must be representative of the population for whom BiomX intends to label the product in the United States. In addition, such studies would be subject to the applicable local laws, and FDA acceptance of the data would be dependent upon its determination that the studies also complied with all applicable United States laws and regulations. There can be no assurance the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept any such data, it would likely result in the need for additional trials, which would be costly and time-consuming and may delay aspects of BiomX’s business plan.

Any products that BiomX may develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or health care reform initiatives, which could make it difficult for BiomX to sell any product candidates or therapies profitably.

The regulations that govern pricing for new medical products vary widely from country to country. As a result, BiomX might obtain regulatory approval for a product in a particular country but then be subject to pricing regulations in that country that delay the commercial launch of the product and negatively impact the revenue

BiomX is able to generate from the sale of the product in that country. In addition, BiomX’s ability to commercialize any approved products successfully will depend in part on the extent to which reimbursement for these products will be available from government health administration authorities, private health insurers and other organizations. Even if BiomX succeeds in bringing one or more therapeutic products to market, these products may not be considered cost-effective, and the amount reimbursed for any products may be insufficient to allow BiomX to sell them on a competitive basis. If the price BiomX is able to charge for therapeutic products is inadequate in light of BiomX’s development and other costs, BiomX’s future profitability could be adversely affected.

Ongoing health care legislative and regulatory reform measures may have a material adverse effect on BiomX’s business and results of operations.

Changes in regulations, statutes or the interpretation of existing regulations could impact BiomX’s business in the future by requiring, for example, (i) changes to BiomX’s manufacturing arrangements, (ii) additions or modifications to product labeling, (iii) the recall or discontinuation of BiomX’s products, or (iv) additional record-keeping requirements. If any such changes were to be imposed, they could adversely affect the operation of BiomX’s business.

In the United States, there have been and continue to be a number of legislative initiatives to contain health care costs. For example, in March 2010, the Patient Protection and Affordable Care Act (the “ACA”), was passed, which substantially changed the way health care is financed by both governmental and private insurers and significantly impacted the United States pharmaceutical industry. The ACA, among other things, subjects biological products to potential competition by lower-cost biosimilars; addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program; and extends the rebate program to individuals enrolled in Medicaid managed care organizations. It also establishes annual fees and taxes on manufacturers of certain branded prescription drugs and creates a new Medicare Part D coverage gap discount program in which manufacturers must agree to offer 50% point of sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Some of the provisions of the ACA have yet to be fully implemented, while certain provisions have been subject to judicial and Congressional challenges, as well as efforts by the current administration to repeal or replace certain aspects of the ACA.

These laws and future state and federal health care reform measures may be adopted in the future, any of which may result in additional reductions in Medicare and other health care funding and otherwise affect the prices BiomX may obtain for any of its product candidates for which it may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

A similar movement is observed in the European Union countries. Criteria for pricing and reimbursement, which vary from country to country, are regularly amended and tightened in order to reduce the draw on the budget allocated to national health insurance systems. Moreover, the system of reference pricing (the price in a country calculated on the basis of prices in other countries with typically lower prices) leads to price reductions in countries that traditionally granted high prices.

BiomX is subject to certain U.S. and foreign anticorruption, anti-money laundering, export control, sanctions and other trade laws and regulations. BiomX can face serious consequences for violations.

Among other matters, U.S. and foreign anticorruption, anti-money laundering, export control, sanctions and other trade laws and regulations, which are collectively referred to as Trade Laws, prohibit companies and their employees, agents, clinical research organizations, legal counsel, accountants, consultants, contractors and other partners from authorizing, promising, offering, providing, soliciting or receiving, directly or indirectly, corrupt or improper payments or anything else of value to or from recipients in the public or private sector. Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. BiomX has direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities and other organizations. BiomX also expects its non-U.S. activities to increase over time. BiomX plans to engage third parties for clinical trials and/or to obtain necessary permits,

licenses, patent registrations and other regulatory approvals, and BiomX can be held liable for the corrupt or other illegal activities of BiomX’s personnel, agents or partners, even if BiomX does not explicitly authorize or have prior knowledge of such activities.

Risks Related to BiomX’s Licensed and Co-Owned Intellectual Property

The license agreements BiomX maintains, including the Research and License Agreement (the “License Agreement”) dated as of June 22, 2015 with Yeda Research and Development Company Limited (“Yeda”), are important to BiomX’s business. If BiomX or the other parties to its license agreements fail to adequately perform under the license agreements, or if BiomX or they terminate the license agreements, the development, testing, manufacture, production and sale of BiomX’s microbiome-based therapeutic product candidates would be delayed or terminated, and BiomX’s business would be adversely affected.

Yeda undertakes to procure certain research and development activities under the License Agreement, including the proof-of-concept studies testing in vivo phage eradication against a model bacteria in germ-free mice, development of an IBD model in animals under germ-free conditions and establishing in vivo method for measuring immune induction capability (Th1) of bacteria, followed by testing several candidate IBD-inducing bacterial strains, during the research period, subject to the terms and conditions specified in the License Agreement. The License Agreement with Yeda provides for an exclusive worldwide license to certain know-how and research information related to the development, testing, manufacture, production and sale of microbiome-based therapeutic product candidates, including candidates specified in the agreement, which are used in BiomX’s phage discovery platform, as well as patents, research and other rights to phage product candidates resulting from the work of the consultants identified in the agreement and further research that BiomX funded. The License Agreement terminates upon the later of the expiration of the last of the patents covered under the License Agreement and the expiry of a continuous 15-year period during which there has not been a first commercial sale of any product in any country. Yeda may also terminate the agreement if BiomX fails to observe certain diligence and development requirements and milestones as described in the License Agreement. BiomX or Yeda may terminate the agreement for the material uncured breach of the other party after a notice period or the other party’s winding up, bankruptcy, insolvency, dissolution or other similar discontinuation of business. Upon termination of the agreement, other than due to the passage of time, BiomX is required to grant to Yeda a nonexclusive, irrevocable, perpetual, fully paid-up, sublicensable, worldwide license in respect of BiomX’s rights in know-how and research results as described in the License Agreement, provided that, if Yeda subsequently grants a license to a third party that utilizes BiomX’s rights, BiomX is entitled to share in the net proceeds actually received by Yeda arising out of that license, subject to a cap based on the development expenses that BiomX incur in connection with the License Agreement.

BiomX also maintains additional license agreements:

•        with the Massachusetts Institute of Technology (“MIT”), pursuant to which BiomX received an exclusive, royalty-bearing license to certain patents held by MIT covering methods to synthetically engineer phages in the field of treating, preventing or diagnosing inflammatory bowel disease, cancer in humans, or certain other specified indications or specific bacterial targets to utilize patents held by MIT;

•        with Keio University (“Keio”) and JSR Corporation (“JSR”), pursuant to which BiomX was granted an exclusive, royalty-bearing, worldwide, perpetual sublicense by JSR to certain patent rights related to BiomX’s inflammatory bowel disease program. Specifically, these patent rights relate to bacterial targets that have been observed to be related to inflammatory bowel disease and the phages that were observed to eradicate these bacterial targets; and

•        with Keio and JSR, pursuant to which BiomX was granted an exclusive, royalty-bearing, worldwide, perpetual sublicense by JSR to certain patent rights related to BiomX’s primary sclerosing cholangitis (“PSC”) program. Specifically, these patent rights relate to bacterial targets that have been observed to be related to PSC and the phages that were observed to eradicate these bacterial targets.

Termination of the license agreements could cause significant delays in BiomX’s product and commercialization efforts that could prevent BiomX from commercializing its product candidates, including its microbiome-based therapeutic product candidates, without first expanding its internal capabilities or entering into other agreements with third parties. Any alternative collaboration or license could also be on less favorable terms to BiomX.

BiomX is highly dependent on intellectual property licensed from third parties, and termination or limitation of any of these licenses could result in the loss of significant rights and materially harm BiomX’s business.

BiomX currently relies on licenses from third-party collaborators for certain aspects of BiomX’s technology and for certain of BiomX’s existing programs. In particular, BiomX received exclusive, royalty-bearing licenses to certain patents held by third parties, including Yeda, MIT, Keio and JSR. BiomX’s license agreement with Yeda provides license to certain know-how and research information related to the development, testing, manufacture, production and sale of microbiome-based therapeutic product candidates that are used in BiomX’s phage discovery platform, as well as patents, research and other rights to phage product candidates resulting from the work of the consultants identified in the agreement and further research that BiomX funded. BiomX’s license agreements with MIT, Keio and JSR provide licenses to patents related to, among other things, synthetic biology and BiomX’s inflammatory bowel disease, primary sclerosing cholangitis and PSC programs. Pursuant to these license agreements, BiomX is required to pay annual license fees, as well as a contingent consideration comprised of milestone and royalty payments, which depend on the achievement of future milestones and potential revenue from products. More information on BiomX’s license agreements, see “BiomX Ltd.’s Business — Material Agreements.”

If BiomX fails to comply with its obligations under its license agreements, including payment terms, BiomX’s licensors may have the right to terminate BiomX’s license agreements, in which event BiomX may not be able to develop, manufacture, market or sell the products covered by those license agreements. BiomX may also face other penalties under its license agreements if it does not meet its contractual obligations. Such an occurrence could materially adversely affect the value of the BiomX products being developed under any such license agreements. Termination of one or more of BiomX’s license agreements, or reduction or elimination of BiomX’s rights under these license agreements, may result in BiomX having to negotiate new or reinstated license agreements, which may not be available to BiomX on equally favorable terms, or at all, which may mean BiomX is unable to commercialize the affected product candidates.

In the future, BiomX may rely upon additional licenses to certain patent rights and proprietary technology from third parties that are important or necessary to the development of BiomX’s product candidates and proprietary product platform. Patent rights that BiomX in-licenses in the future may be subject to a reservation of rights by one or more third parties. As a result, any such third party may have certain rights to such intellectual property.

In addition, subject to the terms of any such license agreements, BiomX may not have the right to control the preparation, filing, prosecution and maintenance, and BiomX may not have the right to control the enforcement and defense, of patents and patent applications covering the technology that BiomX license from third parties. BiomX cannot be certain that its in-licensed patent applications (and any patents issuing therefrom) that are controlled by its licensors will be prepared, filed, prosecuted, maintained, enforced and defended in a manner consistent with the best interests of its business. If BiomX’s licensors fail to prosecute, maintain, enforce and defend such patents rights, or lose rights to those patent applications (or any patents issuing therefrom), the rights BiomX has licensed may be reduced or eliminated, BiomX’s right to develop and commercialize any of its product candidates and proprietary product platform technology that are subject of such licensed rights could be adversely affected, and BiomX may not be able to prevent competitors from making, using and selling competing products. Moreover, BiomX cannot be certain that such activities by its potential future licensors will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents or other intellectual property rights. In addition, even where BiomX may have the right to control the prosecution of patents and patent applications that BiomX may license to and from third parties, BiomX may still be adversely affected or prejudiced by actions or inactions of BiomX’s potential future licensees, licensors and their counsel that took place prior to the date of assumption of control over patent prosecution.

The patent position of biopharmaceutical companies, including BiomX and its licensors, is generally uncertain and involves complex legal and factual considerations and, therefore, validity and enforceability cannot be predicted with certainty. BiomX’s licensed and co-owned intellectual property may be challenged, deemed unenforceable, invalidated or circumvented. BiomX and its licensors will be able to protect their intellectual property rights from unauthorized use by third parties only to the extent that these rights (and the products and services they cover) are protected by valid and enforceable patents, copyrights or trademarks, or are effectively maintained as trade secrets.

Any patents obtained by BiomX’s licensors or BiomX, may be challenged by re-examination or otherwise invalidated or eventually found unenforceable. Both the patent application process and the process of managing patent disputes can be time consuming and expensive. If BiomX or one of its licensors was to initiate legal

proceedings against a third party to enforce a patent relating to one of its products, the defendant in such litigation could counterclaim that the asserted patents are invalid and/or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity or unenforceability are common, as are validity challenges by the defendant against the subject patent or related patents before the United States Patent and Trademark Office (“USPTO”). Grounds for a validity challenge could be an alleged failure to meet any of several statutory patentability requirements, including lack of novelty, obviousness, non-enablement, failure to meet the written description requirement, indefiniteness, and/or failure to claim patentable subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected to prosecution of the patent/s at issue intentionally withheld material information from the USPTO or made a misleading statement during prosecution. Additional grounds for an unenforceability assertion include an allegation of misuse or anticompetitive use of patent rights, and an allegation of incorrect inventorship with deceptive intent. Third parties may also raise similar claims before the USPTO, even outside the context of litigation. The outcome of any assertion of invalidty and/or unenforceability is unpredictable. If a defendant or third party were to prevail on a legal assertion of invalidity and/or unenforceability, BiomX and its licensors would lose at least part, and perhaps all, of the claims of the challenged patent/s. Such a loss of patent protection could have a material adverse impact on BiomX’s business.

BiomX is dependent on patents and proprietary technology. If BiomX fails to adequately protect this intellectual property or if BiomX otherwise does not have exclusivity for the marketing of its products, BiomX’s ability to commercialize products could suffer.

BiomX’s commercial success will depend in part on BiomX’s ability to obtain and maintain patent protection sufficient to prevent others from marketing BiomX’s product candidates, as well as to defend and enforce these patents against infringement and to operate without infringing the proprietary rights of others. Protection of BiomX’s product candidates from unauthorized use by third parties will depend on having valid and enforceable patents that cover BiomX’s product candidates or their manufacture or use or on having effective trade secret protection. If BiomX’s patent applications do not result in issued patents or if BiomX’s patents are found to be invalid, BiomX will lose the ability to exclude others from making, using or selling the inventions claimed therein. BiomX has a limited number of patents and pending patent applications.

The patent positions of biotechnology companies can be uncertain and involve complex legal and factual questions. This is due to inconsistent application of policies and changes in policy relating to the examination and enforcement of biotechnology patents to date on a global scale. The laws of some countries may not protect intellectual property rights to the same extent as the laws of countries having well-established patent systems, and those countries may lack adequate rules and procedures for defending BiomX’s intellectual property rights. Also, changes in either patent laws or in the interpretations of patent laws may diminish the value of BiomX’s intellectual property. BiomX is not able to guarantee that all of its patent applications will result in the issuance of patents, and BiomX cannot predict the breadth of claims that may be allowed in BiomX’s patent applications or in the patent applications BiomX may license from others.

Central provisions of The Leahy-Smith America Invents Act, or the America Invents Act, went into effect on September 16, 2012 and on March 16, 2013. The America Invents Act includes a number of significant changes to U.S. patent law. These changes include provisions that affect the way patent applications are being filed, prosecuted and litigated. For example, the America Invents Act enacted proceedings involving post-issuance patent review procedures, such as inter partes review, or IPR, and post-grant review, that allow third parties to challenge the validity of an issued patent in front of the USPTO Patent Trial and Appeal Board. Each proceeding has different eligibility criteria and different patentability challenges that can be raised. IPRs permit any person (except a party who has been litigating the patent for more than a year) to challenge the validity of the patent on the grounds that it was anticipated or made obvious by prior art. Patents covering pharmaceutical products have been subject to attack in IPRs from generic drug companies and from hedge funds. If it is within nine months of the issuance of the challenged patent, a third party can petition the USPTO for post-grant review, which can be based on any invalidity grounds and is not limited to prior art patents or printed publications.

In post-issuance proceedings, USPTO rules and regulations generally tend to favor patent challengers over patent owners. For example, unlike in district court litigation, claims challenged in post-issuance proceedings are given their broadest reasonable meaning, which increases the chance a claim might be invalidated by prior art or lack support in the patent specification. As another example, unlike in district court litigation, there is no presumption of validity for an issued patent, and thus a challenger’s burden to prove invalidity is by a preponderance of the evidence,

as opposed to the heightened clear and convincing evidence standard. As a result of these rules and others, statistics released by the USPTO show a high percentage of claims being invalidated in post-issuance proceedings. Moreover, with few exceptions, there is no standing requirement to petition the USPTO for inter partes review or post-grant review. In other words, companies that have not been charged with infringement or that lack commercial interest in the patented subject matter can still petition the USPTO for review of an issued patent. Thus, even where BiomX has issued patents, BiomX’s rights under those patents may be challenged and ultimately not provide BiomX with sufficient protection against competitive products or processes.

The degree of future protection for BiomX’s proprietary rights is uncertain, because legal means afford only limited protection and may not adequately protect BiomX’s rights or permit BiomX to gain or keep its competitive advantage. For example:

•        BiomX might not be the first to file patent applications for its inventions;

•        others may independently develop similar or alternative product candidates to any of BiomX’s product candidates that fall outside the scope of BiomX’s patents;

•        BiomX’s pending patent applications may not result in issued patents;

•        BiomX’s issued patents may not provide a basis for commercially viable products or may not provide it with any competitive advantages or may be challenged by third parties;

•        others may design around BiomX’s patent claims to produce competitive products that fall outside the scope of its patents;

•        BiomX may not develop additional patentable proprietary technology related to its product candidates; and

•        BiomX is dependent upon the diligence of its appointed agents in national jurisdictions, acting for and on BiomX’s behalf, which control the prosecution of pending domestic and foreign patent applications and maintain granted domestic and foreign patents.

An issued patent does not guarantee BiomX the right to practice the patented technology or commercialize the patented product. Third parties may have blocking patents that could be used to prevent BiomX from commercializing its patented products and practicing BiomX’s patented technology. BiomX’s issued patents and those that may be issued in the future may be challenged, invalidated or circumvented, which could limit BiomX’s ability to prevent competitors from marketing the same or related product candidates or could limit the length of the term of patent protection of BiomX’s product candidates. Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of BiomX’s product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent. Patent term extensions may not be available for these patents.

BiomX’s rights to develop and commercialize its product candidates and proprietary product platform may be subject, in part, to the terms and conditions of current and future licenses granted to BiomX by others.

Some of BiomX’s licensed rights could provide BiomX with freedom to operate for aspects of BiomX’s products and services. BiomX may need to obtain additional licenses from others to advance its research, development and commercialization activities.

Disputes may arise between BiomX and its licensors regarding intellectual property subject to a license agreement, including:

•        the scope of rights granted under the license agreement and other interpretation-related issues;

•        whether, and the extent to which, BiomX’s products, services, technology and processes infringe on the intellectual property of the licensor that is not subject to the license agreement;

•        BiomX’s right to sublicense patent and other rights to third parties under collaborative development relationships;

•        BiomX’s diligence obligations under the license agreement and what activities satisfy those diligence obligations;

•        the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by BiomX’s licensors and BiomX and its collaborators; and

•        the priority of invention of patented technology.

If BiomX does not prevail in such disputes, BiomX may lose any or all of its rights under such license agreements.

In addition, the agreements under which BiomX currently licenses intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what BiomX believes to be the scope of its rights to the relevant intellectual property or technology or could increase what BiomX believes to be its financial or other obligations under the relevant agreement, either of which could have a material adverse effect on BiomX’s business, financial condition, results of operations and prospects. Moreover, if disputes over intellectual property that BiomX has licensed prevent or impair BiomX’s ability to maintain its current licensing arrangements on commercially acceptable terms, BiomX may be unable to successfully develop and commercialize any affected products or services, which could have a material adverse effect on BiomX’s business, financial conditions, results of operations and prospects.

Absent the license agreements, BiomX may infringe patents subject to those agreements, and, if the license agreements are terminated, BiomX may be subject to litigation by the licensor. Litigation could result in substantial costs to BiomX and distract BiomX’s management. If BiomX does not prevail, it may be required to pay damages, including treble damages, attorneys’ fees, costs and expenses, and royalties. BiomX may also be enjoined from selling its products or services, which could adversely affect its ability to offer products or services, its ability to continue operations, and its financial condition.

If BiomX infringes the rights of third parties, it could be prevented from selling products, forced to pay damages and/or royalties, and forced to defend against litigation.

BiomX does not believe that the products it is currently developing infringe upon the rights of any third parties or are infringed upon by third parties. However, there can be no assurance that our technology will not be found in the future to infringe upon the rights of others or be infringed upon by others. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patent literature frequently occurs much later than the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications of which BiomX is unaware that may later result in issued patents that BiomX products or product candidates infringe. For example, pending patent applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that is infringed by one or more BiomX products. In such a case, others may assert infringement claims against BiomX, and should BiomX be found to infringe these patents or impermissibly use their intellectual property, BiomX might be forced to pay damages, potentially including treble damages, if BiomX is found to have willfully infringed on such third parties’ patent rights.

In addition to any damages BiomX might have to pay, BiomX may also be required to obtain licenses from the holders of this intellectual property, enter into royalty agreements, or redesign its products so as not to use this intellectual property. Each of these penalties may prove to be uneconomical or otherwise impossible. BiomX may fail to obtain any such licenses or intellectual property rights on commercially reasonable terms. Even if BiomX is able to obtain a license, it may be non-exclusive, thereby giving BiomX’s competitors access to the same licensed technologies. In that event, BiomX may be required to spend significant time and resources to develop or license replacement technologies. If BiomX is unable to do so, BiomX may be unable to develop or commercialize the affected products, which could materially harm our business. Conversely, BiomX may not be able to pursue claims against third parties that infringe on BiomX’s licensed or co-owned technology. Thus, BiomX’s licensed and co-owned technology may not provide adequate protection against competitors.

The pharmaceutical industry is characterized by extensive litigation regarding patents and other intellectual property rights. Moreover, the cost to BiomX of any litigation or other proceeding relating to its licensed and/or co-owned intellectual property rights, even if resolved in BiomX’s favor, could be substantial. Any such litigation

would divert BiomX’s management efforts, and BiomX may not have sufficient resources to bring any such action to a successful conclusion. Uncertainties resulting from the initiation and continuation of any litigation could limit BiomX’s ability to continue operations.

Additionally, because BiomX’s pipeline may involve additional development candidates that could require the use of proprietary rights held by third parties, the growth of BiomX’s business could depend in part on BiomX’s ability to acquire, in-license or use these proprietary rights. In addition, BiomX’s development candidates may require specific formulations to work effectively and efficiently and these rights may be held by others. BiomX may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that BiomX identifies. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that BiomX may consider attractive. These established companies may have a competitive advantage over BiomX due to their size, cash resources, and greater clinical development and commercialization capabilities.

For example, BiomX sometimes collaborates with U.S. and foreign academic institutions to accelerate its preclinical research or development under written agreements with these institutions. Typically, these institutions provide BiomX with an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such right of first negotiation for intellectual property, BiomX may be unable to negotiate a license within the specified time frame or under terms that are acceptable to it. If BiomX is unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking BiomX’s ability to pursue its program.

In addition, companies that perceive BiomX to be a competitor may be unwilling to assign or license rights to BiomX. BiomX also may be unable to license or acquire third-party intellectual property rights on terms that would allow BiomX to make an appropriate return on its investment. If BiomX is unable to successfully obtain rights to required third-party intellectual property rights, BiomX’s business, financial condition and prospects for growth could suffer.

BiomX may not be successful in obtaining, through acquisitions, in-licenses or otherwise, necessary rights to its product candidates, proprietary product platform technologies or other technologies.

BiomX currently has rights to certain intellectual property, through licenses from third parties, to develop BiomX’s product candidates and proprietary product platform technologies. Some health care companies and academic institutions are competing with BiomX in the field of microbiome therapies and may have patents and/or have filed and are likely filing patent applications potentially relevant to BiomX’s business. In order to avoid infringing these third-party patents, BiomX may find it necessary or prudent to obtain licenses to such patents from such third-party intellectual property holders. BiomX may also require licenses from third parties for certain technologies that BiomX may be evaluating for use with BiomX’s current or future product candidates. However, BiomX may be unable to secure such licenses or otherwise acquire or in-license any compositions, methods of use, processes or other intellectual property rights from third parties that BiomX identifies as necessary for BiomX’s current or future product candidates and BiomX’s proprietary product platform at a reasonable cost or on reasonable terms, if at all. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that BiomX may consider attractive or necessary. These established companies may have a competitive advantage over BiomX due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive BiomX to be a competitor may be unwilling to assign or license rights to it. BiomX also may be unable to license or acquire third-party intellectual property rights on terms that would allow BiomX to make an appropriate return on BiomX’s investment or at all.

In the event that BiomX tries to obtain rights to required third-party intellectual property rights and is ultimately unsuccessful, BiomX may be required to expend significant time and resources to redesign BiomX’s technology, product candidates or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If BiomX is unable to do so, BiomX may be unable to develop or commercialize the affected product candidates or continue to utilize its existing proprietary product platform technology, which could harm its business, financial condition, results of operations and prospects significantly.

BiomX relies on its proprietary product platform to identify microbiome therapies. BiomX’s competitive position could be materially harmed if BiomX’s competitors develop a similar platform and develop rival product candidates.

BiomX relies on know-how, inventions and other proprietary information to strengthen its competitive position. BiomX considers know-how to be its primary intellectual property with respect to its proprietary product platform. Its clinical trials allow it to collect clinical data, which it uses as a feedback loop to make improvements to its proprietary product platform. In particular, BiomX anticipates that, with respect to this proprietary product platform, this data may over time be disseminated within the industry through independent development, the publication of journal articles describing the method and the movement of skilled personnel.

BiomX cannot rule out that its competitors may have or obtain the knowledge necessary to analyze and characterize similar data to its known data for the purpose of identifying and developing products that could compete with any of its product candidates. BiomX’s competitors may also have significantly greater financial, product development, technical, and human resources access to date. Further, BiomX’s competitors may have significantly greater experience in using translational science methods to identify and develop product candidates.

BiomX may not be able to prohibit its competitors from using technology or methods that are the same as or similar to its proprietary product platform to develop their own product candidates. If BiomX’s competitors develop associated therapies, BiomX’s ability to develop and market a promising product or product candidate may diminish substantially, which could have a material adverse effect on its business, financial condition, prospects and results of operations.

BiomX relies on trade secrets and other forms of non-patent intellectual property protection. If BiomX is unable to protect its trade secrets, other companies may be able to compete more effectively against BiomX.

BiomX relies on trade secrets to protect certain aspects of its technology, including its proprietary processes for manufacturing and purifying bacteriophages. Trade secrets are difficult to protect, especially in the pharmaceutical industry, where much of the information about a product must be made public during the regulatory approval process. Although BiomX uses reasonable efforts to protect its trade secrets, its employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose its information to competitors. Enforcing a claim that a third party illegally obtained and is using its trade secret information is expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States may be less willing to or may not protect trade secrets. Moreover, BiomX’s competitors may independently develop equivalent knowledge, methods and know-how.

If BiomX is sued for infringing intellectual property rights of third parties or if BiomX is forced to engage in an interference proceeding, it will be costly and time-consuming, and an unfavorable outcome in that litigation or interference would have a material adverse effect on BiomX’s business.

BiomX’s ability to commercialize its product candidates depends on BiomX’s ability to develop, manufacture, market and sell BiomX’s product candidates without infringing the proprietary rights of third parties. Numerous U.S. and foreign patents and patent applications, which are owned by third parties, exist in the general field of anti-infective products or in fields that otherwise may relate to BiomX’s product candidates. If BiomX is shown to infringe, BiomX could be enjoined from the use or sale of the claimed invention if it is unable to prove that the patent is invalid. In addition, because patent applications can take many years to issue, there may be currently pending patent applications, unknown to us, that may later result in issued patents that BiomX’s product candidates may infringe or that may trigger an interference proceeding regarding one of BiomX’s owned or licensed patents or applications. There could also be existing patents of which BiomX are not aware that its product candidates may inadvertently infringe or that may become involved in an interference proceeding.

The biotechnology and pharmaceutical industries are characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. For so long as BiomX’s product candidates are in clinical trials, BiomX believes its clinical activities fall within the scope of the exemptions provided by 35 U.S.C. Section 271(e) in the United States, which exempts from patent infringement liability activities reasonably related to the development and submission of information to the FDA. As BiomX’s clinical investigational drug product candidates progress toward commercialization, the possibility of a patent infringement claim against BiomX increases. While BiomX attempts to ensure that its active clinical investigational drugs and the

methods it employs to manufacture them, as well as the methods for their use it intends to promote, do not infringe other parties’ patents and other proprietary rights, BiomX cannot be certain they do not, and competitors or other parties may assert that BiomX infringe their proprietary rights in any event.

BiomX may be exposed to future litigation based on claims that BiomX’s product candidates, the methods BiomX employs to manufacture them or the uses for which BiomX intends to promote them infringe the intellectual property rights of others. BiomX’s ability to manufacture and commercialize its product candidates may depend on BiomX’s ability to demonstrate that the manufacturing processes it employs and the use of its product candidates do not infringe third-party patents. If third-party patents were found to cover BiomX’s product candidates or their use or manufacture, BiomX could be required to pay damages or be enjoined and therefore unable to commercialize its product candidates, unless BiomX obtained a license. A license may not be available to BiomX on acceptable terms, if at all.

BiomX may become subject to claims for remuneration or royalties for assigned service invention rights by BiomX’s employees, which could result in litigation and adversely affect BiomX’s business.

A significant portion of BiomX’s intellectual property has been developed by BiomX’s employees in the course of their employment for it. Under the Israeli Patent Law, 5727-1967 (the “Patent Law”) inventions conceived by an employee during the term and as part of the scope of his or her employment with a company are regarded as “service inventions,” which belong to the employer, absent a specific agreement between the employee and employer giving the employee service invention rights. The Patent Law also provides that, if there is no such agreement between an employer and an employee, the Israeli Compensation and Royalties Committee, or the Committee, a body constituted under the Patent Law, shall determine whether the employee is entitled to remuneration for his or her inventions. BiomX generally enters into assignment of invention agreements with its employees pursuant to which such individuals assign to BiomX all rights to any inventions created in the scope of their employment or engagement with it. Although BiomX’s employees have agreed to assign to it service invention rights, BiomX may face claims demanding remuneration in consideration for assigned inventions. As a consequence of such claims, BiomX could be required to pay additional remuneration or royalties to its current or former employees or be forced to litigate such claims, which could negatively affect BiomX’s business.

Risks Related to BiomX’s Reliance on Third Parties

BiomX relies, and expect to continue to rely, on third parties to conduct its clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.

BiomX expects to continue to rely on third parties, such as contract research organizations (“CROs”), and clinical investigators, to conduct and manage BiomX’s clinical trials.

BiomX’s reliance on these third parties for research and development activities will reduce BiomX’s control over these activities but does not relieve BiomX of its responsibilities. For example, BiomX remains responsible for ensuring that each of its clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the FDA requires BiomX to comply with regulatory standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, safety and welfare of trial participants are protected. Other countries’ regulatory agencies also have requirements for clinical trials with which BiomX must comply. BiomX also is required to register ongoing clinical trials and post the results of completed clinical trials in a government-sponsored database, clinicaltrials.gov, within specified time frames. Failure to do so can result in fines, adverse publicity, and civil and criminal sanctions.

Furthermore, these third parties may also have relationships with other entities, some of which may be BiomX’s competitors. If these third parties do not successfully carry out their contractual duties, do not meet expected deadlines, experience work stoppages, terminate their agreements with BiomX or need to be replaced, or do not conduct BiomX’s clinical trials in accordance with regulatory requirements or BiomX’s stated protocols, BiomX may need to enter into new arrangements with alternative third parties, which could be difficult, costly or impossible, and BiomX’s clinical trials may be extended, delayed, terminated or need to be repeated. If any of the foregoing occurs, BiomX may not be able to obtain, or may be delayed in obtaining, marketing approvals for its product candidates and may not be able to, or may be delayed in its efforts to, successfully commercialize its product candidates.

BiomX also expects to rely on other third parties to store and distribute drug supplies for its clinical trials. Any performance failure on the part of BiomX’s distributors could delay clinical development or marketing approval of BiomX’s product candidates or commercialization of BiomX’s products, producing additional losses and depriving BiomX of potential product revenue.

Third-party relationships are important to BiomX’s business. If BiomX is unable to maintain its collaborations or enter into new relationships, or if these relationships are not successful, BiomX’s business could be adversely affected.

BiomX has limited capabilities for product development and does not yet have any capability for sales, marketing or distribution. Accordingly, BiomX enters into relationships with other companies and academic institutions to provide BiomX with important technology, and BiomX may receive additional technology and funding under these and other collaborations in the future. The relationships BiomX enters into may pose a number of risks, including the following:

•        third parties have, and future third-party collaborators may have, significant discretion in determining the efforts and resources that they will apply;

•        current and future third parties may not perform their obligations as expected;

•        current and future third parties may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the third parties’ strategic focus or available funding, or external factors, such as a strategic transaction that may divert resources or create competing priorities;

•        third parties may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

•        current and future third parties could independently develop, or develop with third parties, products that compete directly or indirectly with BiomX’s products and product candidates if the third parties believe that the competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than BiomX’s;

•        product candidates discovered in collaboration with BiomX may be viewed by BiomX’s current or future third parties as competitive with their own product candidates or products, which may cause such third parties to cease to devote resources to the commercialization of BiomX’s product candidates;

•        current and future third parties may fail to comply with applicable regulatory requirements regarding the development, manufacture, distribution or marketing of a product candidate or product;

•        current and future third parties with marketing and distribution rights to one or more of BiomX’s product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of such product or products;

•        disagreements with current or future third parties, including disagreements over proprietary rights, contract interpretation or the preferred course of development, might cause delays or terminations of the research, development or commercialization of product candidates, might lead to additional responsibilities for BiomX with respect to product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive;

•        current and future third parties may not properly maintain or defend BiomX’s intellectual property rights or may use BiomX’s proprietary information in such a way as to invite litigation that could jeopardize or invalidate BiomX’s intellectual property or proprietary information or expose BiomX to potential litigation;

•        current and future third parties may infringe the intellectual property rights of others, which may expose BiomX to litigation and potential liability;

•        current and future third parties may infringe regulatory frameworks (such as but not limited to cybersecurity and/or privacy frameworks), which may expose BiomX to litigation and potential liability or require or lead BiomX to terminate relationships with them;

•        if a current or future third party of BiomX is involved in a business combination, the collaborator might deemphasize or terminate the development or commercialization of any product candidate licensed to it by BiomX; and

•        current and future relationships may be terminated by the collaborator, and, if terminated, BiomX could be required to raise additional capital to pursue further development or commercialization of the applicable product candidates.

If BiomX’s relationships do not result in the successful discovery, development and commercialization of products or if one of BiomX’s third-party collaborators terminates its agreement with it, BiomX may not receive any future research funding or milestone or royalty payments under the collaboration. If BiomX does not receive the funding it expects under these agreements, BiomX’s development of its technology and product candidates could be delayed, and BiomX may need additional resources to develop product candidates and its technology. Additionally, if any of BiomX’s current or future third-party collaborators terminates its agreement with it, BiomX may find it more difficult to attract new collaborators, and BiomX’s reputation in the business and financial communities could be adversely affected.

Relationships are complex and time-consuming to negotiate and document. In addition, there have been a significant number of recent business combinations among large pharmaceutical companies that have resulted in a reduced number of potential future collaborators. BiomX faces significant competition in seeking appropriate collaborators. BiomX’s ability to reach a definitive agreement for a collaboration will depend, among other things, upon BiomX’s assessment of a collaborator’s resources and expertise, the terms and conditions of a proposed collaboration and a proposed collaborator’s evaluation of a number of factors

BiomX may not be successful in maintaining or establishing collaborations, which could adversely affect BiomX’s ability to develop and, if required regulatory approvals are obtained, commercialize BiomX’s product candidates.

In the future, in order to advance BiomX’s clinical development, or in connection with any potential out-licensing of product candidates or technologies, BiomX may seek to enter into collaboration agreements. In addition, BiomX may consider entering into collaboration arrangements with medical technology, pharmaceutical or biotechnology companies and/or seek to establish strategic relationships with marketing partners for the development, sale, marketing and/or distribution of BiomX’s product candidates within or outside of the United States. If BiomX is unable to reach agreements with potential collaborators, then BiomX may fail to meet its business objectives for the affected product candidates or programs. Collaboration arrangements are complex and time-consuming to negotiate, document and implement, and BiomX may not be successful in its efforts, if any, to establish and implement collaborations or other alternative arrangements. The terms of any collaboration or other arrangements that BiomX establish may not be favorable to it, and the success of any such collaboration will depend heavily on the efforts and activities of BiomX’s collaborators. Moreover, BiomX’s collaboration agreement could be terminated or not renewed by a third party at a time that is costly or damaging to BiomX. Any failure to engage successful collaborators could cause delays in BiomX’s product development and/or commercialization efforts, which could harm BiomX’s financial condition and operational results.

Risks Related to BiomX’s Operations in Israel

BiomX has received, and may continue to receive Israeli governmental grants to assist in the funding of its research and development activities. If BiomX loses its funding from these research and development grants, BiomX may encounter difficulties in the funding of future research and development projects and implementing technological improvements, which would harm BiomX’s operating results.

Through June 30, 2019, BiomX had received an aggregate of $2.1 million in the form of grants from the Israeli Innovation Authority (“IIA”). BiomX was formed as an incubator company as part of the FutuRx incubator, and, until 2017, the majority of BiomX’s funding was from IIA grants and funding by the incubator, which is supported by the IIA. BiomX continued to apply for and receive IIA grants after BiomX left the incubator. The requirements and restrictions for such grants are found in the Israel Encouragement of Research and Development in

Industries (the “Research Law”). Under the Research Law, royalties of 3% to 3.5% on the revenue derived from sales of products or services developed in whole or in part using these IIA grants are payable to the Israeli government. BiomX developed both of its platform technologies, at least in part, with funds from these grants, and, accordingly, BiomX would be obligated to pay these royalties on sales of any of its product candidates that achieve regulatory approval. As long as the manufacturing of BiomX’s product candidates takes place in Israel and no technology funded with IIA grants is sold or out licensed to a non-Israeli entity, the maximum aggregate royalties paid generally would not exceed 100% of the grants made to us, plus annual interest equal to the 12-month LIBOR rate applicable to dollar deposits, as published on the first business day of each calendar year. As of June 30, 2019, the balance of the principal and interest in respect of BiomX’s commitments for future payments to the IIA totaled approximately $2.2 million. As part of funding BiomX’s current and planned product development activities, BiomX has submitted follow-up grant applications for new grants.

These grants have funded some of BiomX’s personnel, development activities with subcontractors, and other research and development costs and expenses. However, if these awards are not funded in their entirety or if new grants are not awarded in the future, due to, for example, IIA budget constraints or governmental policy decisions, BiomX’s ability to fund future research and development and implement technological improvements would be impaired, which would negatively impact BiomX’s ability to develop its product candidates.

The Israeli government grants BiomX has received for research and development expenditures restrict BiomX’s ability to manufacture products and transfer technology outside of Israel and requires BiomX to satisfy specified conditions. If BiomX fails to satisfy these conditions, BiomX may be required to refund grants previously received, together with interest and penalties.

BiomX’s research and development efforts have been financed, in part, through the grants that BiomX have received from the IIA. BiomX, therefore, must comply with the requirements of the Research Law. For the six months ended June 30, 2019 and 2018, BiomX recorded grants totaling $0.3 million and $0.6 million, from the IIA, respectively. The grants represented 5.1% and 15.4% of BiomX’s gross research and development expenditures for the six months ended June 30, 2019 and 2018, respectively. For the years ended December 31, 2018, 2017 and 2016, BiomX recorded grants totaling $0.6 million, $0.7 million and $0.3 million, from the IIA, respectively. The grants represented 6.6%, 13.6% and 20.8% of BiomX’s gross research and development expenditures for the years ended December 31, 2018, 2017 and 2016, respectively.

Under the Research Law, BiomX is required to manufacture the major portion of each of its products developed using these grants in the State of Israel or otherwise ask for special approvals. BiomX may not receive the required approvals for any proposed transfer of manufacturing activities. Even if BiomX does receive approval to manufacture products developed with government grants outside of Israel, the royalty rate may be increased, and BiomX may be required to pay up to 300% of the grant amounts, plus interest, depending on the manufacturing volume that is performed outside of Israel. This restriction may impair BiomX’s ability to outsource manufacturing or engage in BiomX’s own manufacturing operations for those products or technology.

Additionally, under the Research Law, BiomX is prohibited from transferring, including by way of license, the IIA-financed technology and related intellectual property rights and know-how outside of the State of Israel, except under limited circumstances and only with the approval of the IIA Research Committee. BiomX may not receive the required approvals for any proposed transfer, and, even if received, BiomX may be required to pay the IIA a portion, to be set by the IIA, in its discretion and taking into account the circumstances, upon its approval of such transaction, of the consideration or milestone and royalty payments that BiomX receives upon any sale or out-licensing of such technology to a non-Israeli entity, up to 600% of the grant amounts plus interest.

These restrictions may impair BiomX’s ability to sell its technology assets or to perform or outsource manufacturing outside of Israel or otherwise transfer its know-how outside of Israel and may require it to obtain the approval of the IIA for certain actions and transactions and pay additional royalties and other amounts to the IIA. In addition, any change of control and any change of ownership of BiomX’s shares of common stock that would make a non-Israeli citizen or resident an “interested party,” as defined in the Research Law, requires prior written notice to the IIA, and BiomX’s failure to comply with this requirement could, under certain circumstances, result in criminal liability.

These restrictions will continue to apply even after BiomX has repaid the full amount of royalties on the grants.

Potential political, economic and military instability in the State of Israel, where the majority of BiomX’s senior management and BiomX’s research and development facilities are located, may adversely affect BiomX’s results of operations.

BiomX’s headquarters and principal offices and most of BiomX’s operations are located in the State of Israel. In addition, all but one of BiomX’s key employees and officers and the majority of BiomX’s directors are residents of Israel. Accordingly, political, economic and military conditions in Israel directly affect BiomX’s business. Since the State of Israel was established in 1948, a number of armed conflicts have occurred between Israel and its neighboring countries.

Any hostilities involving Israel or the interruption or curtailment of trade between Israel and its present trading partners, or a significant downturn in the economic or financial condition of Israel, could affect adversely BiomX’s operations. Ongoing and revived hostilities or other Israeli political or economic factors could harm BiomX’s operations, product development and results of operations.

Although Israel has entered into various agreements with Egypt, Jordan and the Palestinian Authority, there has been an increase in unrest and terrorist activity, which began in October 2000 and has continued with varying levels of severity. For instance, beginning in July 2014, for approximately seven weeks, Israel experienced an armed conflict between Israel and Hamas, which included rocket strikes against civilian targets in various parts of Israel and disrupted day-to-day civilian activity in southern and central Israel. If renewed, such hostilities may negatively affect business conditions in Israel. In addition, Israel faces threats from more distant neighbors, in particular, Iran. BiomX’s insurance policies do not cover it for the damages incurred in connection with these conflicts or for any resulting disruption in its operations. The Israeli government, as a matter of law, provides coverage for the reinstatement value of direct damages that are caused by terrorist attacks or acts of war; however, the government may cease providing such coverage or the coverage might not be enough to cover potential damages. In the event that hostilities disrupt the ongoing operation of BiomX’s facilities or the airports and seaports on which BiomX depend to import and export its supplies and products, BiomX’s operations may be materially adversely affected.

In addition, since the end of 2010, numerous acts of protest and civil unrest have taken place in several countries in the Middle East and North Africa, many of which involved significant violence. The civil unrest in Egypt, which borders Israel, resulted in the resignation of its president, Hosni Mubarak, and significant changes to the country’s government. In Syria, also bordering Israel, a civil war continues to take place. The ultimate effect of these developments on the political and security situation in the Middle East and on Israel’s position within the region is not clear at this time. Such instability may lead to deterioration in the political and trade relationships that exist between the State of Israel and certain other countries.

Several countries, principally in the Middle East, still restrict doing business with Israel and Israeli companies, and additional countries may impose restrictions on doing business with Israel and Israeli companies, whether as a result of hostilities in the region or otherwise. In addition, there have been increased efforts by activists to cause companies, research institutions and consumers to boycott Israeli goods and cooperation with Israeli-related entities based on Israeli government policies. Such actions, particularly if they become more widespread, may adversely impact BiomX’s ability to cooperate with research institutions and collaborate with other third parties. Any hostilities involving Israel, any interruption or curtailment of trade or scientific cooperation between Israel and its present partners, or a significant downturn in the economic or financial condition of Israel could adversely affect BiomX’s business, financial condition and results of operations. BiomX may also be targeted by cyber terrorists specifically because BiomX is an Israeli-related company.

Under applicable employment laws, BiomX may not be able to enforce covenants not to compete.

BiomX generally enters into noncompetition agreements with BiomX’s employees. These agreements prohibit BiomX’s employees, if they cease working for it, from competing directly with BiomX or working for BiomX’s competitors or clients for a limited period. BiomX may be unable to enforce these agreements under the laws of the jurisdictions in which BiomX’s employees work, and it may be difficult for BiomX to restrict its competitors from benefitting from the expertise BiomX’s former employees or consultants developed while working for it. For example, Israeli labor courts have required employers seeking to enforce noncompete undertakings of a former employee to demonstrate that the competitive activities of the former employee will harm one of a limited number of material interests of the employer that have been recognized by the courts, such as the protection of a company’s trade secrets or other intellectual property.

BiomX’s operations may be disrupted by the obligations of personnel to perform military service.

Some of BiomX’s employees based in Israel may be called upon to perform annual military reserve duty and, in emergency circumstances, could be called to immediate and unlimited active duty. BiomX’s operations could be disrupted by the absence of a significant number of BiomX’s employees related to military service or the absence for extended periods of one or more of BiomX’s executive officers or other key employees. Such disruption could materially adversely affect BiomX’s business and results of operations.

The tax benefits that are available to BiomX if and when BiomX generates taxable income requires BiomX to meet various conditions and may be prevented or reduced in the future, which could increase BiomX’s costs and taxes.

If and when BiomX generates taxable income, BiomX would be eligible for certain tax benefits provided to “Technologic Preferred Enterprise” and/or “Preferred Enterprise” as defined under the Encouragement of Capital Investment Law -1959 (the “Law”) and its regulations, as amended and, accordingly, could be subject to a reduced corporate tax rate on its income that will meet the provisions of the Law (ranging between 7.5%-16%). To the extent that BiomX is not be eligible to obtain such statuses, BiomX’s Israeli taxable income would be subject to regular Israeli corporate tax rates. The standard corporate tax rate for Israeli companies is 23%. The benefits available to BiomX in accordance to the Law and its regulations are subject to the fulfillment of conditions stipulated in the Law and the regulations. Further, in the future, these tax benefits may be reduced or discontinued.

It may be difficult to enforce a U.S. judgment against BiomX or BiomX’s officers and directors named in this proxy statement in Israel or the United States or to assert U.S. securities laws claims in Israel or serve process on BiomX’s officers and directors.

Not all of BiomX’s directors or officers are residents of the United States, and most of their and BiomX’s assets are located outside the United States. Service of process upon BiomX or BiomX’s non-U.S. resident directors and officers may be difficult to obtain within the United States. Israeli courts may refuse to hear a claim based on a violation of U.S. securities laws against BiomX or BiomX’s non-U.S. officers and directors, because Israel may not be the most appropriate forum to bring such a claim. In addition, even if an Israeli court agrees to hear a claim, it may determine that Israeli law, and not U.S. law, is applicable to the claim. If U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process. Certain matters of procedure will also be governed by Israeli law. There is little binding case law in Israel addressing the matters described above. Additionally, Israeli courts might not enforce judgments obtained in the United States against BiomX or BiomX’s non-U.S. directors and executive officers, which may make it difficult to collect on judgments rendered against BiomX or BiomX’s non-U.S. officers and directors.

Moreover, an Israeli court will not enforce a non-Israeli judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli courts (subject to exceptional cases), if its enforcement is likely to prejudice the sovereignty or security of the State of Israel, if it was obtained by fraud or in the absence of due process, if it is at variance with another valid judgment that was given in the same matter between the same parties, or if a suit in the same matter between the same parties was pending before a court or tribunal in Israel at the time the foreign action was brought.

Risks Related to Manufacturing and Supply

BiomX expects to rely on third parties to manufacture its clinical supply of product candidates, and BiomX intends to rely on third parties to produce and process its products, if approved.

BiomX currently relies on outside vendors to supply raw materials and other important components, such as lab equipment. BiomX has not yet caused any product candidates to be manufactured or processed on a commercial scale and may not be able to do so for any of its product candidates. BiomX will make changes as it works to optimize the manufacturing process for its product candidates, and BiomX cannot be sure that even minor changes in the process will result in therapies that are safe and effective.

The facilities used to manufacture BiomX’s product candidates must be approved by the FDA or equivalent foreign regulatory agencies pursuant to inspections that will be conducted after BiomX submits a marketing application to the FDA or equivalent foreign regulatory agency. Additionally, any facilities used for the manufacture of product candidates commercialized for non-therapeutic uses will be subject to inspection by the FDA and foreign

regulatory agencies. BiomX does not currently control all aspects of the manufacturing process of, and are currently largely dependent on, BiomX’s contract manufacturing partners for compliance with regulatory requirements, known as cGMP requirements, for manufacture of its product candidates. If and when BiomX’s manufacturing facility becomes operational, BiomX will be responsible for compliance with cGMP requirements. If BiomX or BiomX’s contract manufacturers cannot successfully manufacture in conformance with BiomX’s specifications and the strict regulatory requirements of the FDA or other regulatory authorities, BiomX and they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities with respect to the manufacture of BiomX’s product candidates. In addition, BiomX has no control over the ability of its contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or an equivalent foreign regulatory agency does not approve these facilities for the manufacture of BiomX’s product candidates or if it withdraws any such approval in the future, BiomX may need to find alternative manufacturing facilities, which would significantly impact its ability to develop, obtain regulatory approval for or market its product candidates, if approved.

BiomX has limited experience manufacturing its product candidates for purposes of clinical trials for therapeutic indications or for non-therapeutic clinical studies or trials. BiomX opened its own manufacturing facility at its headquarters in Ness Ziona, Israel in the third quarter of 2019. BiomX cannot assure you that it can manufacture its product candidates in compliance with regulations at a cost or in quantities necessary to make them commercially viable.

BiomX’s product candidates rely on the availability of specialty raw materials, which may not be available to BiomX on acceptable terms or at all.

BiomX’s product candidates require certain specialty raw materials, some of which BiomX obtains from small companies with limited resources and experience to support a commercial product. These third-party suppliers may be ill-equipped to support BiomX’s needs, especially in non-routine circumstances like an FDA inspection or medical crisis, such as widespread contamination. BiomX does not currently have contracts in place with all of the suppliers that BiomX may need at any point in time and, if needed, may not be able to contract with them on acceptable terms or at all. Accordingly, BiomX may experience delays in receiving key raw materials to support clinical or commercial manufacturing.

Risks Related to the Business Combination

The combined company expects to incur significant costs as a result of operating as a public company.

As a public company, the combined company will incur significant legal, accounting and other expenses. The combined company will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which require, among other things, that it file with the SEC annual, quarterly and current reports with respect to its business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and the NYSE American Stock Exchange to implement provisions of the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the Public Company Accounting Oversight Board impose significant requirements on public companies, including requiring the establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. These expenses will likely increase in the future, particularly after the combined company ceases to be an “emerging growth company” if it is also no longer a “smaller reporting company” as a result of additional corporate governance and disclosure requirements under the Sarbanes-Oxley Act, the Dodd-Frank Act, and SEC rules and regulations.

The combined company expects the rules and regulations applicable to public companies to result in it continuing to incur substantial legal and financial compliance costs. These costs will increase its net loss or decrease any net income and may require the combined company to reduce costs in other areas of its business.

BiomX’s management will be required to devote substantial time to maintaining and improving its internal controls over financial reporting and the requirements of being a public company which may, among other things, strain its resources, divert management’s attention and affect its ability to accurately report its financial results and prevent fraud.

Historically, BiomX has operated as a private company. Following the Business Combination, the combined company will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules of the NYSE American Stock Exchange. The Sarbanes-Oxley Act requires, among other things, that a company

maintain effective disclosure controls and procedures (“DCP”) and internal controls over financial reporting (“ICFR”). BiomX’s management and other personnel have limited experience operating as a public company, which may result in operational inefficiencies or errors, or a failure to improve or maintain effective ICFR and DCP necessary to ensure timely and accurate reporting of operational and financial results. BiomX’s existing management team will need to devote a substantial amount of time to these compliance initiatives, and may need to add personnel in areas such as accounting, financial reporting, investor relations and legal in connection with operations as a public company. Ensuring that the combined company has adequate internal financial and accounting controls and procedures in place is a costly and time-consuming effort that needs to be re-evaluated frequently. The combined company’s compliance with existing and evolving regulatory requirements will result in increased administrative expenses and a diversion of management’s time and attention.

Pursuant to Sections 302 and 404 of the Sarbanes-Oxley Act (“Section 404”), the combined company will be required to furnish certain certifications and reports by its management on its ICFR, which, after it is no longer an emerging growth company and if it becomes an accelerated or large accelerated filer under SEC rules, must be accompanied by an attestation report on ICFR issued by its independent registered public accounting firm. To achieve compliance with Section 404 within the prescribed period, the combined company will document and evaluate its ICFR, which is both costly and challenging. Implementing any appropriate changes to its internal controls may require specific compliance training for the combined company’s directors, officers and employees, entail substantial costs to modify its existing accounting systems, and take a significant period of time to complete. Such changes may not, however, be effective in maintaining the adequacy of its ICFR, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase its operating costs and could materially impair its ability to operate its business. Moreover, effective internal controls are necessary for the combined company to produce reliable and timely financial reports and are important to help prevent fraud. Any failure by the combined company to file its periodic reports in a timely manner may cause investors to lose confidence in its reported financial information and may lead to a decline in the price of our common stock.

In accordance with NYSE American Stock Exchange rules, the combined company will be required to maintain a majority independent Board of Directors. The various rules and regulations applicable to public companies make it more difficult and more expensive to maintain directors’ and officers’ liability insurance, and the combined company may be required to accept reduced coverage or incur substantially higher costs to maintain coverage. If the combined company is unable to maintain adequate directors’ and officers’ insurance, its ability to recruit and retain qualified officers and directors will be significantly curtailed.

BiomX will need to grow the size of its organization, and may experience difficulties in managing this growth.

As BiomX’s research, development, manufacturing and commercialization plans and strategies develop, and as it transitions into operating as a public company, BiomX expects to need additional managerial, operational, sales, marketing, financial and other personnel. Future growth would impose significant added responsibilities on members of management, including:

•        identifying, recruiting, compensating, integrating, maintaining and motivating additional employees;

•        managing BiomX’s internal research and development efforts effectively, including identification of clinical candidates, scaling its manufacturing process and navigating the clinical and FDA review process for its product candidates; and

•        improving BiomX’s operational, financial and management controls, reporting systems and procedures.

BiomX’s future financial performance and our ability to commercialize BiomX’s product candidates will depend, in part, on its ability to effectively manage any future growth, and BiomX’s management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

If BiomX is not able to effectively expand its organization by hiring new employees and expanding its groups of consultants and contractors, BiomX may not be able to successfully implement the tasks necessary to further develop and commercialize its product candidates and, accordingly, may not achieve its research, development and commercialization goals.

The unaudited pro forma financial information included in this proxy statement may not be representative of the combined company’s results following the Business Combination.

The unaudited pro forma financial information included in this proxy statement has been presented for informational purposes only and is not necessarily indicative of the financial position or results of operations that actually would have occurred had the Business Combination been completed as of the date indicated, nor is it indicative of the combined company’s future operating results or financial position. The pro forma financial statements have been derived from the historical financial statements of CHAC and BiomX and adjustments and assumptions have been made regarding the combined company after giving effect to the Business Combination. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the Business Combination. As a result, the actual financial condition of the combined company following the Business Combination may not be consistent with, or evident from, these pro forma financial statements. The assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition following the Business Combination.

We are an “emerging growth company,” and we cannot be certain that the reduced disclosure requirements applicable to “emerging growth companies” will not make our common stock less attractive to investors.

We are an “emerging growth company,” as defined under the JOBS Act. For so long as we are an emerging growth company, we intend to take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We could be an emerging growth company for up to five years from the end of our most recently completed fiscal year, although we may lose such status earlier, depending on the occurrence of certain events, including when we have generated total annual gross revenue of at least $1.07 billion or when we are deemed to be a “large accelerated filer” under the Exchange Act, which means that the market value of our common stock that is held by non-affiliates exceeds $700 million as of June 30 of the prior year, or when we have issued more than $1.0 billion in nonconvertible debt securities during the prior three-year period.

We cannot predict if investors will not find our common stock less attractive or our company less comparable to certain other public companies because we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

As a “smaller reporting company” we are permitted to provide less disclosure than larger public companies which may make our common stock less attractive to investors.

We are currently a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects which may result in less investor confidence. Investors may find our common stock less attractive as a result of our smaller reporting company status. If some investors find our common stock less attractive, there may be a less active trading market for our common stock and our stock price may be more volatile.

CHAC and BiomX have incurred and expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by CHAC whether or not the Business Combination is completed.

CHAC and BiomX expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, CHAC expects to incur approximately $1,300,000 in expenses, including a fee of $20,000 to be paid to Morrow Sodali, plus disbursements and reimbursement for out-of-pocket expenses, in connection with the proxy solicitation for the special meeting. These expenses will reduce the amount of cash available to be used for other corporate purposes by CHAC whether or not the Business Combination is completed.

In the event that a significant number of CHAC Shares are redeemed, its stock may become less liquid following the Business Combination.

If a significant number of CHAC Shares are redeemed, CHAC may be left with a significantly smaller number of stockholders. As a result, trading in the shares of the surviving company following the Business Combination may be limited and your ability to sell your shares in the market could be adversely affected. The NYSE American Stock Exchange may not list the CHAC Shares on its exchange, which could limit investors’ ability to make transactions in CHAC’s securities and subject CHAC to additional trading restrictions.

CHAC will be required to meet the initial listing requirements to be listed on the NYSE American Stock Exchange following the Business Combination. CHAC may not be able to meet those initial listing requirements. Even if CHAC’s securities are so listed, CHAC may be unable to maintain the listing of its securities in the future.

If CHAC fails to meet the initial listing requirements and the NYSE American Stock Exchange does not list its securities on its exchange, the Business Combination will not close. However even if CHAC meets the initial listing requirements, if CHAC is subsequently delisted, CHAC could face significant material adverse consequences, including:

•        a limited availability of market quotations for our securities;

•        reduced liquidity with respect to our securities;

•        a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities;

•        a limited amount of news and analyst coverage for the post-transaction company; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

CHAC may waive one or more of the conditions to the Business Combination without resoliciting stockholder approval for the Business Combination.

CHAC may agree to waive, in whole or in part, some of the conditions to its obligations to complete the Business Combination, to the extent permitted by applicable laws. The Board of Directors of CHAC will evaluate the materiality of any waiver to determine whether amendment of this proxy statement and resolicitation of proxies is warranted. In some instances, if the Board of Directors of CHAC determines that a waiver is not sufficiently material to warrant resolicitation of stockholders, CHAC has the discretion to complete the Business Combination without seeking further stockholder approval. For example, it is a condition to CHAC’s obligations to close the Business Combination that there be no restraining order, injunction or other order restricting BiomX’s conduct of its business, however, if the Board of Directors of CHAC determines that any such order or injunction is not material to the business of BiomX, then the Board of Directors may elect to waive that condition and close the Business Combination.

CHAC’s stockholders will experience immediate dilution as a consequence of the issuance of CHAC Shares as consideration in the Business Combination. Having a minority share position may reduce the influence that CHAC’ current stockholders have on the management of CHAC.

After the Business Combination, assuming no redemptions of CHAC Shares for cash and giving effect to the purchase and sale agreements described above, CHAC’s current public stockholders will own approximately 20% of the outstanding CHAC Shares, CHAC’s current directors, officers and affiliates will own approximately

7% of the outstanding CHAC Shares, and the former stockholders of BiomX will own approximately 73% of the outstanding CHAC Shares. Assuming redemption by holders of 2,062,157 outstanding CHAC Shares, CHAC public stockholders will own approximately 13% of the outstanding CHAC Shares, CHAC’s Sponsor and current directors, officers and affiliates will own approximately 5% of the outstanding CHAC Shares, and the former stockholders of BiomX will own approximately 82% of the outstanding CHAC Shares. The minority position of the former CHAC stockholders will give them limited influence over the management and operations of the combined company.

Risks Related to CHAC’s Business

CHAC will be forced to liquidate the trust account if it cannot consummate a business combination by the date that is 24 months from the closing of the Initial Public Offering, or December 18, 2020. In the event of a liquidation, CHAC’s public stockholders will receive $10.00 per share and the CHAC Warrants will expire worthless.

If CHAC is unable to complete a business combination by the date that is 24 months from the closing of the Initial Public Offering, or December 18, 2020, and is forced to liquidate, the per-share liquidation distribution will be $10.00, plus interest earned on amounts held in trust that have not been used to pay for taxes. Furthermore, there will be no distribution with respect to the CHAC Warrants, which will expire worthless as a result of CHAC’s failure to complete a business combination.

You must tender your CHAC Shares in order to validly seek redemption at the special meeting of stockholders.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to CHAC’s transfer agent or to deliver your common stock to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, in each case by two (2) business days prior to the date of the special meeting. The requirement for physical or electronic delivery ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is consummated. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the Business Combination.

If you or a “group” of stockholders are deemed to hold in excess of 20% of CHAC’s shares of common stock, you will lose the ability to redeem all such shares in excess of 20% of CHAC’s shares of common stock.

CHAC’s Amended and Restated Certificate of Incorporation provides that a public stockholder, individually or together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from seeking redemption rights with respect to more than an aggregate of 20% of the shares sold in this offering. Your inability to redeem more than an aggregate of 20% of the shares sold in this offering will reduce your influence over CHAC’s ability to consummate its initial business combination and you could suffer a material loss on your investment in CHAC if you sell such excess shares in open market transactions. As a result, you will continue to hold that number of shares exceeding 20% and, in order to dispose of such shares, you would be required to sell your shares in open market transaction, potentially at a loss.

If third parties bring claims against CHAC, the proceeds held in trust could be reduced and the per-share liquidation price received by CHAC’s stockholders may be less than $10.00.

CHAC’s placing of funds in trust may not protect those funds from third party claims against CHAC. Although CHAC has received from many of the vendors, service providers (other than its independent accountants) and prospective target businesses with which it does business executed agreements waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of CHAC’s public stockholders, they may still seek recourse against the trust account. Additionally, a court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of CHAC’s public stockholders. If CHAC liquidates the trust account before the completion of a business combination and distributes the proceeds held therein to its public stockholders, our Sponsor has contractually agreed that it will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to

us, but only if such a vendor or prospective target business does not execute such a waiver. However, CHAC cannot assure you that they will be able to meet such obligation. Therefore, the per-share distribution from the trust account for our stockholders may be less than $10.00 due to such claims.

Additionally, if CHAC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in CHAC’s bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the trust account, CHAC may not be able to return $10.00 to our public stockholders.

CHAC’s stockholders may be held liable for claims by third parties against CHAC to the extent of distributions received by them.

Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution. The pro rata portion of the trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not consummate an initial business combination by December 18, 2020 may be considered a liquidation distribution under Delaware law. If a corporation complies with certain procedures set forth in Section 280 of the DGCL intended to ensure that it makes reasonable provision for all claims against it, including a 60-day notice period during which any third-party claims can be brought against the corporation, a 90-day period during which the corporation may reject any claims brought, and an additional 150-day waiting period before any liquidating distributions are made to stockholders, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would be barred after the third anniversary of the dissolution. However, we intend to redeem our public shares as soon as reasonably possible following December 18, 2020 in the event we do not consummate an initial business combination and, therefore, we do not intend to comply with those procedures.

Because we will not be complying with Section 280 of the DGCL, Section 281(b) of the DGCL requires the Company to adopt a plan, based on facts known to us at such time that will provide for the payment of all existing and pending claims or claims that may be potentially brought against the Company within the 10 years following dissolution. However, because we are a blank check company, rather than an operating company, and our operations have been limited to searching for prospective target businesses, the only likely claims to arise would be from vendors (such as lawyers, investment bankers, and consultants) or prospective target businesses. If the Company’s plan of distribution complies with Section 281(b) of the DGCL, any liability of our stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata share of the claim or the amount distributed to the stockholder, and any liability of the stockholder would likely be barred after the third anniversary of the dissolution. There can be no assurance that we will properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of its stockholders may extend beyond the third anniversary of such date. Furthermore, if the pro rata portion of the trust account distributed to our public stockholders upon the redemption of 100% of our public shares in the event we do not consummate an initial business combination within the required timeframe is not considered a liquidation distribution under Delaware law and such redemption distribution is deemed to be unlawful, then pursuant to Section 174 of the DGCL, the statute of limitations for claims of creditors could then be six years after the unlawful redemption distribution, instead of three years, as in the case of a liquidation distribution.

If we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. Furthermore, because we intend to distribute the proceeds held in the trust account to our public stockholders promptly after December 18, 2020 in the event we do not consummate an initial business combination, this may be viewed or interpreted as giving preference to our stockholders over any potential creditors with respect to access to or distributions from the Company’s assets. Furthermore, our board of directors may be viewed as having breached its fiduciary duties to the Company’s creditors and/or may have acted in bad faith, thereby exposing itself and the Company to claims of punitive damages, by paying our stockholders from the trust account prior to addressing the claims of creditors. There can be no assurance that claims will not be brought against the Company for these reasons.

If CHAC’s due diligence investigation of BiomX was inadequate, then stockholders of CHAC following the Business Combination could lose some or all of their investment.

Even though CHAC conducted a due diligence investigation of BiomX, it cannot be sure that this diligence uncovered all material issues that may be present inside BiomX or its business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of BiomX and its business and outside of its control will not later arise.

Because CHAC’s Sponsor and all of CHAC’s officers and directors own CHAC Shares and CHAC Warrants which will not participate in liquidation distributions and, therefore, they will lose their entire investment in us and face other financial consequences if the Business Combination is not completed, they may have a conflict of interest in determining whether the Business Combination is appropriate.

CHAC’s Sponsor and all of CHAC’s officers and directors own an aggregate of 1,750,000 shares and warrants to purchase 2,900,000 shares of common stock of CHAC. Such individuals have waived their right to redeem these shares, or to receive distributions with respect to these shares upon the liquidation of the trust account if CHAC is unable to consummate a business combination. Accordingly, the CHAC Shares, as well as the Private CHAC Warrants purchased by an affiliate of our Sponsor, will be worthless if CHAC does not consummate a business combination. Based on a market price of $10.14 per share of common stock of CHAC on September 17, 2019 and $0.83 per warrant on September 17, 2019, the value of these shares and warrants was approximately $20,152,000. The CHAC Shares acquired prior to the Initial Public Offering, as well as the Private CHAC Warrants will be worthless if CHAC does not consummate a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting BiomX as a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of the Business Combination are appropriate and are fair to, and in the best interests of, CHAC and its stockholders.

In addition, at the closing of the Business Combination, our Sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on our behalf. These financial interests of our Sponsor, executive officers and directors may have influenced their motivation in identifying and selecting BiomX for the Business Combination.

CHAC is requiring stockholders who wish to redeem their common stock in connection with the Business Combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

CHAC is requiring stockholders who wish to redeem their common stock to either tender their certificates to our transfer agent or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s, or DTC, DWAC (Deposit/Withdrawal At Custodian) System by no later than two (2) business days prior to the Special Meeting. In order to obtain a physical certificate, a stockholder’s broker and/or clearing broker, DTC and CHAC’s transfer agent will need to act to facilitate this request. It is CHAC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent.

However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than CHAC anticipates for stockholders to deliver their common stock, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their common stock.

CHAC will require its stockholders who wish to redeem their common stock in connection with the Business Combination to comply with specific requirements for redemption described above, and such redeeming stockholders may be unable to sell their securities when they wish to in the event that the Business Combination is not consummated.

CHAC is requiring that public stockholders who wish to redeem their common stock in connection with the proposed Business Combination to comply with specific requirements for redemption as described above. If the Business Combination is not consummated, investors who attempted to redeem their common stock will be unable

to sell their securities after the failed Business Combination until CHAC has returned their securities to them. The market price for CHAC’s common stock may decline during this time and you may not be able to sell your securities when you wish to, even while other stockholders that did not seek redemption may be able to sell their securities.

CHAC’s Sponsor and other initial stockholders, which include its officers and directors, control a substantial interest in CHAC and thus may influence certain actions requiring a stockholder vote.

CHAC’s initial stockholders, including all of its officers and directors, collectively own approximately 20% of CHAC’s issued and outstanding common stock. CHAC’s Sponsor and other initial stockholders have agreed to vote any shares they own in favor of the Business Combination. Therefore, we would need only 437,501 of our public shares (or approximately 6.3% of our public shares) to be voted in favor of the transaction in order to have such transaction approved (assuming that only a quorum was present at the meeting).

If CHAC’s security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of CHAC’s securities.

CHAC’s Sponsor and other initial stockholders are entitled to make a demand that it register the resale of their insider shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, the purchasers of the private placement Private CHAC Warrants and our initial stockholders, officers and directors are entitled to demand that we register the resale of the shares underlying the Private CHAC Warrants and any securities our initial stockholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us at any time after we consummate a business combination. If such persons exercise their registration rights with respect to all of their securities, then there will be an additional 4,650,000 CHAC Shares eligible for trading in the public market. The presence of these additional common stock trading in the public market may have an adverse effect on the market price of CHAC’s securities.

CHAC will not obtain an opinion from an unaffiliated third party as to the fairness of the Business Combination to its stockholders.

CHAC is not required to obtain an opinion from an unaffiliated third party that the price it is paying is fair to its public stockholders from a financial point of view. CHAC’s public stockholders therefore, must rely solely on the judgment of CHAC’s Board of Directors, and our Board of Directors may not have properly valued such business. The lack of a third-party valuation or fairness opinion may also lead an increased number of stockholders to vote against the Business Combination or demand redemption of their shares into cash, which could potentially impact our ability to consummate the Business Combination.

CHAC’s directors and officers may have certain conflicts in determining to recommend the acquisition of BiomX, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a stockholder.

CHAC’s management and directors have interests in and arising from the Business Combination that are different from, or in addition to, your interests as a stockholder, which could result in a real or perceived conflict of interest. These interests include the fact that the CHAC Shares and CHAC Warrants owned by CHAC’s management and directors, or their affiliates and associates, would become worthless if the Business Combination Proposal is not approved and CHAC otherwise fails to consummate a business combination prior to its liquidation date.

Risks Related to the Financial Projections

You should be aware that uncertainties are inherent in prospective financial projections of any kind, and such uncertainties increase with the passage of time. None of CHAC or BiomX or any of their respective affiliates, advisors, officers, directors, or representatives has made or makes any representation or can give any assurance to any CHAC stockholders, or any other person, regarding the ultimate performance of BiomX compared to the information set forth under “The Business Combination Proposal — Summary of CHAC Financial Analysis” or that any such results will be achieved.

The inclusion of CHAC’s projections relating to BiomX’s business in this proxy statement should not be regarded as an indication that CHAC, BiomX or their respective advisors or other representatives considered or consider the projections to be necessarily predictive of actual future performance or events, and the projections set forth under “The Business Combination Proposal — Summary of CHAC Financial Analysis” should not be relied upon as such.

The projections were prepared by management of CHAC based, in part, on certain information furnished by BiomX. The prospective financial information was not prepared with a view toward public disclosure nor was it prepared with a view toward compliance with the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, or GAAP. Neither the independent registered public accounting firm of CHAC or BiomX nor any other independent accounts has audited, reviewed, compiled, examined or performed any procedures with respect to the accompanying unaudited prospective financial information for the purpose of its inclusion herein, and accordingly, neither the independent registered public accounting firm of CHAC or BiomX, nor any other independent accountant expresses an opinion or provides any form of assurance with respect thereto for the purpose of this proxy statement. Due to inherent uncertainties in financial projections of any kind, stockholders are cautioned not to place undue reliance, if any, on the projections.

The projections are subjective in nature and may not be realized.

CHAC’s projections are inherently subjective in nature and susceptible to interpretation and, accordingly, such projections may not be achieved. The projections also reflect numerous assumptions made by CHAC management, including material assumptions regarding, among other things, timing of clinical trials, patient enrollment, timing of receipt of regulatory approvals that may be needed, characterization of the product candidates, the timing of, and amounts of, any royalty payments, milestone payments or other payments due to third parties by BiomX, the entry by BiomX into license or collaboration agreements, market size, commercial efforts, industry performance, general business and economic conditions and numerous other matters that may not be realized and are subject to significant uncertainties and contingencies, all of which are difficult to predict and many of which are beyond the control of the preparing party. Accordingly, there can be no assurance that the assumptions made in preparing the projections will be realized. There may be differences between actual and projected results, and the differences may be material. The risk that these uncertainties and contingencies could cause the assumptions to fail to be reflective of actual results is further increased by the length of time over which these assumptions apply. The failure to achieve assumptions and projections in early periods could have a compounding effect on the projections shown for the later periods. Thus, any such failure of an assumption or projection to be reflective of actual results in an early period could have a greater effect on the projected results failing to be reflective of actual events in later periods. BiomX is a preclinical stage company, without any product that has received regulatory or marketing approval, and as discussed in this proxy statement, its business is subject to numerous risks. Moreover, 12-year projections in the context of a preclinical stage company are inherently unrealizable given the many variables, especially in later years, that may affect results.

All of these assumptions involve variables making them difficult to predict, and some are beyond the control of BiomX and CHAC. Although BiomX’s and CHAC’s management believes that there was a reasonable basis for the projections and underlying assumptions, any assumptions for near-term projected cases remain uncertain, and such uncertainty increases with the length of the projected period. The projections are forward-looking statements and are subject to risks and uncertainties. See the section titled “Special Note Regarding Forward-Looking Statements” on page 67. For a discussion of the CHAC projections, please see the section titled “The Business Combination Proposal — Summary of CHAC Financial Analysis” beginning on page 86.

In developing the CHAC projections provided to the CHAC Board of Directors, CHAC management made numerous material estimates with respect to BiomX for the years ending December 31, 2019 through 2030.

The projections prepared by CHAC management were based on estimates from both discussions with, and materials provided, by BiomX for the years from 2019 to 2022, which themselves were based on numerous assumptions. Additionally, such estimates were then used by CHAC to extrapolate certain prospective financial results based on CHAC management’s assessment of comparable companies and industry metrics. The selected summary of the adjusted and unadjusted CHAC projections that were made available to the CHAC Board of Directors and which CHAC management’s estimates were based upon can be found in the section titled “The Business Combination Proposal — Summary of CHAC Financial Analysis” beginning on page 86. CHAC management did not consider ranges for various financial measures but rather considered in deriving these measures, peak sales amounts, which may reduce the utility in later years of the prospective financial results.

Risks Related to Our Common Stock

The price of our common stock likely will be volatile like the stocks of other biotechnology companies.

The stock markets in general and the markets for biotechnology stocks have experienced extreme volatility. The market for the common stock of smaller companies such as ours is characterized by significant price volatility when compared to the shares of larger, more established companies that trade on a national securities exchange and have large public floats, and we expect that our share price will be more volatile than the shares of such larger, more established companies for the indefinite future.

In addition to the factors discussed in this “Risk Factors” section, price declines in our common stock could also result from general market and economic conditions and a variety of other factors, including:

•        adverse results or delays in our clinical trials;

•        adverse actions taken by regulatory agencies with respect to our product candidates, clinical trials or the manufacturing processes of our product candidates;

•        announcements of technological innovations, patents or new products by our competitors;

•        regulatory developments in the United States and foreign countries;

•        any lawsuit involving us or our product candidates;

•        announcements concerning our competitors, or the biotechnology or pharmaceutical industries in general;

•        developments concerning any strategic alliances or acquisitions we may enter into;

•        actual or anticipated variations in our operating results;

•        changes in recommendations by securities analysts or lack of analyst coverage;

•        deviations in our operating results from the estimates of analysts;

•        our inability, or the perception by investors that we will be unable, to continue to meet all applicable requirements for continued listing of our common stock on the NYSE American Stock Exchange, and the possible delisting of our common stock;

•        sales of our common stock by our executive officers, directors and principal stockholders or sales of substantial amounts of common stock; and

•        loss of any of our key scientific or management personnel.

In the past, following periods of volatility in the market price of a particular company’s securities, litigation has often been brought against that company. Any such lawsuit could consume resources and management time and attention, which could adversely affect our business.

If the Business Combination’s benefits do not meet the expectations of investors or securities analysts, the market price of our securities may decline.

If the benefits of the Business Combination do not meet the expectations of investors or securities analysts, the market price of our securities may decline. The market values of our securities at the time of the Business Combination may vary significantly from their prices on the date the Merger Agreement was executed, the date of this proxy statement, or the date on which our stockholders vote on the Business Combination.

In addition, following the Business Combination, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Prior to the Business Combination, there has not been a public market for BiomX’s securities. Accordingly, the valuation ascribed to BiomX’s ordinary shares in the Business Combination may not be indicative of the actual price that will prevail in the trading market following the Business Combination. If an active market for our securities develops and continues, the trading price of our securities following the Business Combination could be volatile and subject to wide fluctuations in response to various factors, some of

which are beyond our control. Our securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover and may experience a further decline, which could have a material adverse effect on your investment in our securities.

If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us, our business, our market, or our competitors. Securities and industry analysts do not currently, and may never, publish research on the company. Because the Business Combination will result in BiomX merging with a special purpose acquisition company (“SPAC”), research coverage from industry analysts may be limited. If no securities or industry analysts commence coverage of our company, our stock price and trading volume could be negatively impacted. If any of the analysts who may cover the company change their recommendation regarding our stock adversely, provide more favorable relative recommendations about our competitors or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If any analyst who may cover us ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

We may fail to realize any or all of the anticipated benefits of the Business Combination.

The success of the Business Combination will depend, in part, on our ability to successfully manage and deploy the cash received upon the consummation of the Business Combination. Although we intend to use the cash received upon the consummation of the Business Combination for the continued development of our product candidates, there can be no assurance that we will be able to achieve our intended objectives.

We have broad discretion in the use of our existing cash, cash equivalents and the net proceeds from the Business Combination and may not use them effectively.

Our management will have broad discretion in the application of our existing cash, cash equivalents and the net proceeds from the Business Combination, and you will not have the opportunity as part of your investment decision to assess whether such proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of our existing cash, cash equivalents and the net proceeds from the Business Combination, their ultimate use may vary substantially from their currently intended use. Our management might not apply our cash resources in ways that ultimately increase the value of your investment. The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest our cash resources in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our stockholders. If we do not invest or apply the net proceeds from this offering in ways that enhance stockholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

The price of our common stock may be subject to increased volatility and the Rule 144 resale exemption will be unavailable for our securities because the Business Combination will result in a merger with a SPAC.

The Business Combination will result in us merging with a SPAC, which can cause additional volatility in the price of our common stock. We expect that the price of our common stock and of that of SPACs in general may be more volatile compared to the stock price of an operating company.

Rule 144 of the Securities Act provides a safe harbor under which holders of restricted securities and affiliates of an issuer may resell their securities into the public market. However, Rule 144 is unavailable for securities of former SPACs until, among other things, twelve months have elapsed since the former SPAC has filed “Form 10 information” with the SEC. After the completion of the Business Combination, our stockholders may not rely on Rule 144 for resales of their common stock for a minimum of one year, which can impair the ability to resell our common stock at a favorable return.

The current unavailability and potential future unavailability of the Rule 144 resale exemption for our common stock could have an adverse effect on the market price of our common stock.

Special meeting OF CHAC STOCKHOLDERS

General

We are furnishing this proxy statement to the CHAC stockholders as part of the solicitation of proxies by our Board of Directors for use at the special meeting of CHAC stockholders to be held on October 23, 2019 and at any adjournment or postponement thereof. This proxy statement is first being furnished to our stockholders on or about September 23, 2019 in connection with the vote on the Business Combination Proposal, the two Amendment Proposals, the NYSE Proposal and the Business Combination Adjournment Proposal. This document provides you with the information you need to know to be able to vote or instruct your vote to be cast at the special meeting.

Date, Time and Place

The special meeting of stockholders will be held on October 23, 2019 at 10:00 a.m., at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154, or such other date, time and place to which such meeting may be adjourned or postponed.

Purpose of the Special Meeting of CHAC Stockholders

At the special meeting of stockholders, we are asking holders of CHAC Shares to approve the following proposals:

•        To approve the Merger Agreement, dated as of July 16, 2019 (the “Merger Agreement”) by and among CHAC, BiomX Ltd. (“BiomX”) and CHAC Merger Sub Ltd. (the “Merger Sub”), and the transactions contemplated thereby, (collectively referred to as the “Business Combination”). This proposal is referred to as the “Business Combination Proposal” or “Proposal No. 1.”

•        To approve the amendment of the Amended and Restated Certificate of Incorporation of CHAC to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000. This proposal is referred to as the “Share Increase Proposal” or “Proposal No. 2.”

•        To approve the amendment of the Amended and Restated Certificate of Incorporation of CHAC to classify the Board of Directors into three classes. This proposal is referred to as the “Classified Board Proposal” or “Proposal No. 3,” and together with the Share Increase Proposal, they are referred to as the “Amendment Proposals.”

•        To approve the Chardan Healthcare Acquisition Corp. 2019 Omnibus Long-Term Incentive Plan. This proposal is referred to as the “Equity Plan Adoption Proposal” or “Proposal No. 4.”

•        To approve the issuance of more than 20% of the issued and outstanding common stock of CHAC pursuant to the terms of the Merger Agreement, as required by NYSE American Listed Company Guide Sections 712 and 713. This proposal is referred to as the “NYSE Proposal” or “Proposal No. 5.”

•        To approve the adjournment of the special meeting, if necessary or advisable, in the event CHAC does not receive the requisite stockholder vote to approve the Business Combination. This proposal is called the “Business Combination Adjournment Proposal” or “Proposal No. 6.”

Recommendation of the CHAC Board of Directors to Stockholders

After careful consideration of the terms and conditions of the Merger Agreement, the Board of Directors of CHAC has determined that the Business Combination and the transactions contemplated thereby are fair to and in the best interests of CHAC and its stockholders. In reaching its decision with respect to the Business Combination and the transactions contemplated thereby, the Board of Directors of CHAC reviewed various industry and financial data and the due diligence and evaluation materials provided by BiomX. The Board of Directors did not obtain a fairness opinion on which to base its assessment. CHAC’s Board of Directors recommends that CHAC stockholders vote:

•        FOR the Business Combination Proposal;

•        FOR the Share Increase Proposal;

•        FOR the Classified Board Proposal;

•        FOR the Equity Plan Adoption Proposal;

•        FOR the NYSE Proposal; and

•        FOR the Business Combination Adjournment Proposal.

CHAC’s Board of Directors have interests that may be different from or in addition to your interests as a stockholder. See “The Business Combination Proposal — Interests of Certain Persons in the Business Combination” in this proxy statement for further information.

Record Date; Who Is Entitled to Vote

We have fixed the close of business on September 17, 2019, as the “record date” for determining those CHAC stockholders entitled to notice of and to vote at the special meeting. As of the close of business on September 17, 2019, there were 8,750,000 shares of common stock of CHAC outstanding and entitled to vote. Each holder of CHAC Shares is entitled to one vote per share on each of the Business Combination Proposal, the two Amendment Proposals, the NYSE Proposal and the Business Combination Adjournment Proposal.

As of September 17, 2019, CHAC’s Sponsor and other initial stockholders, either directly or beneficially, owned and were entitled to vote 1,750,000 shares of common stock, or approximately 20% of CHAC’s outstanding common stock. With respect to the Business Combination, CHAC’s Sponsor and other initial stockholders have agreed to vote their respective shares of common stock acquired by them in favor of the Business Combination Proposal and related Proposals.

Quorum and Required Vote for Stockholder Proposals

A quorum of CHAC stockholders is necessary to hold a valid meeting. A quorum will be present at the special meeting of CHAC stockholders if a majority of the CHAC Shares issued and outstanding and entitled to vote at the special meeting is represented in person or by proxy. Abstentions present in person and by proxy will count as present for the purposes of establishing a quorum but broker non-votes will not.

Approval of the Business Combination Proposal, the Equity Plan Adoption Proposal, the NYSE Proposal, and the Business Combination Adjournment Proposal will require the affirmative vote of the holders of a majority of the issued and outstanding common stock of CHAC present and entitled to vote at the special meeting. Approval of each of the Amendment Proposals will require the approval of the holders of a majority of the CHAC Shares entitled to vote at the special meeting. Attending the special meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the proposals and, assuming a quorum is present, broker non-votes will have no effect on the Proposals, except that a broker non-vote will have the same effect as voting against each of the Amendment Proposals.

Voting Your Shares

Each CHAC share of common stock that you own in your name entitles you to one vote for each proposal on which such shares are entitled to vote at the special meeting. Your proxy card shows the number of common stock that you own.

There are two ways to ensure that your CHAC Shares are voted at the special meeting:

•        You can cause your shares to be voted by signing and returning the enclosed proxy card. If you submit your proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted, as recommended by our Board of Directors, “FOR” the Business Combination Proposal, each of the two Amendment Proposals, the NYSE Proposal and the Business Combination Adjournment Proposal. Votes received after a matter has been voted upon at the special meeting will not be counted.

•        You can attend the special meeting and vote in person. We will give you a ballot when you arrive. However, if your shares are held in the name of your bank, broker or other nominee, you must get a proxy from the bank, broker or other nominee. That is the only way we can be sure that the bank, broker or other nominee has not already voted your shares.

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF THE BUSINESS COMBINATION PROPOSAL (AS WELL AS THE OTHER PROPOSALS). IN ORDER TO REDEEM YOUR SHARES, YOU MUST CONTINUE TO HOLD YOUR SHARES THROUGH THE CLOSING DATE OF THE BUSINESS COMBINATION AND TENDER YOUR PHYSICAL STOCK CERTIFICATE TO OUR TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE DATE OF THE SPECIAL MEETING. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO ELECTRONICALLY TRANSFER YOUR SHARES TO THE DTC ACCOUNT OF CONTINENTAL STOCK TRANSFER & TRUST COMPANY, OUR TRANSFER AGENT, AT LEAST TWO DAYS PRIOR TO THE DATE OF THE SPECIAL MEETING.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

•        you may send another proxy card with a later date;

•        if you are a record holder, you may notify our corporate secretary in writing before the special meeting that you have revoked your proxy at Chardan Healthcare Acquisition Corp., 17 State St., Floor 21, New York, NY 10004, Attn: Corporate Secrtary; or

•        you may attend the special meeting, revoke your proxy, and vote in person, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you have any questions about how to vote or direct a vote in respect of your common stock, you may call Morrow Sodali, our proxy solicitor, at (800) 662-5200, or CHAC at 646-465-9000.

No Additional Matters May Be Presented at the Special meeting

This special meeting has been called only to consider the approval of the Business Combination. Under CHAC’s Amended and Restated Certificate of Incorporation, other than procedural matters incident to the conduct of the special meeting, no other matters may be considered at the special meeting if they are not included in the notice of the special meeting.

Redemption Rights

Pursuant to CHAC’s Amended and Restated Certificate of Incorporation, a holder of CHAC Shares may demand that CHAC redeem such common stock for cash in connection with a business combination. You may not elect to redeem your shares prior to the completion of a business combination.

If you are a public stockholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern time on October 21, 2019 (two (2) business days before the special meeting), that CHAC redeem your shares into cash; and (ii) submit your request in writing to CHAC’s transfer agent, at the address listed at the end of this section and delivering your shares to CHAC’s transfer agent physically or electronically using the DWAC system at least two (2) business days prior to the vote at the meeting. In order to validly request redemption, you must either make a request for redemption on the proxy card or separately send a request in writing to CHAC’s transfer agent. The proxy card or separate request must be signed by the applicable stockholder in order to validly request redemption. A stockholder is not required to submit a proxy card or vote in order to validly exercise redemption rights.

You may tender the CHAC Shares for which you are electing redemption by two (2) business days before the special meeting by either:

•        Delivering certificates representing CHAC’s Shares to CHAC’s transfer agent, or

•        Delivering the CHAC Shares electronically through the DWAC system.

CHAC stockholders will be entitled to redeem their CHAC Shares for a full pro rata share of the trust account (currently anticipated to be no less than approximately $10.16 per share) net of taxes payable.

Any corrected or changed written demand of redemption rights must be received by CHAC’s transfer agent two (2) business days prior to the special meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent at least two (2) business days prior to the vote at the meeting.

Public stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of CHAC shares as of the Record Date. Any public stockholder who holds shares of CHAC on or before October 21, 2019 (two (2) business days before the special meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid, at the consummation of the Business Combination.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to CHAC’s transfer agent or deliver your shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, in each case, by the business day prior to the special meeting.

Through the DWAC system, this electronic delivery process can be accomplished by contacting your broker and requesting delivery of your shares through the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC, and CHAC’s transfer agent will need to act together to facilitate this request. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and the broker would determine whether or not to pass this cost on to the redeeming holder. It is CHAC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. CHAC does not have any control over this process or over the brokers or DTC, and it may take longer than two weeks to obtain a physical stock certificate. Stockholders who request physical stock certificates and wish to redeem may be unable to meet the deadline for tendering their CHAC Shares before exercising their redemption rights and thus will be unable to redeem their CHAC Shares.

In the event that a stockholder tenders its CHAC Shares and decides prior to the consummation of the Business Combination that it does not want to redeem its CHAC Shares, the stockholder may withdraw the tender. In the event that a stockholder tenders CHAC Shares and the business combination is not completed, these CHAC Shares will not be redeemed for cash and the physical certificates representing these CHAC Shares will be returned to the stockholder promptly following the determination that the Business Combination will not be consummated. CHAC anticipates that a stockholder who tenders CHAC Shares for redemption in connection with the vote to approve the Business Combination would receive payment of the redemption price for such CHAC Shares soon after the completion of the Business Combination.

If properly demanded by CHAC’s public stockholders, CHAC will redeem each share into a pro rata portion of the funds available in the Trust Account, calculated as of two business days prior to the anticipated consummation of the Business Combination. As of the record date, this would amount to approximately $10.14 per share. If you exercise your redemption rights, you will be exchanging your CHAC Shares for cash and will no longer own the CHAC Shares.

Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)-(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) will be restricted from seeking redemption rights with respect to more than 20% of the CHAC Shares.

If too many public stockholders exercise their redemption rights, we may not be able to meet certain condition, and as a result, would not be able to proceed with the Business Combination.

Tendering Common Stock Share Certificates in connection with Redemption Rights

CHAC is requiring the CHAC public stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to CHAC’s transfer agent, or to deliver their shares to the transfer agent electronically using Depository Trust Company’s

DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option at least two (2) business days prior to the special meeting. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether CHAC requires holders seeking to exercise redemption rights to tender their CHAC Shares. The need to deliver CHAC Shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

Any request for redemption, once made, may be withdrawn at any time up to the business day immediately preceding the consummation of the proposed Business Combination. Furthermore, if a stockholder delivered his certificate for redemption and subsequently decided prior to the date immediately preceding the consummation of the proposed Business Combination not to elect redemption, he may simply request that the transfer agent return the certificate (physically or electronically).

A redemption payment will only be made in the event that the proposed Business Combination is consummated. If the proposed Business Combination is not completed for any reason, then public stockholders who exercised their redemption rights would not be entitled to receive the redemption payment. In such case, CHAC will promptly return the share certificates to the public stockholder.

United States Federal Income Taxation Relating to Redeeming Stockholders

General

This section is a general summary of the material U.S. federal income tax provisions relating to the redemption of CHAC’s common stock in connection with a business combination. This section does not address any aspect of U.S. federal gift or estate tax, or the state, local or non-U.S. tax consequences of an investment in our securities, nor does it provide any actual representations as to any tax consequences of the acquisition, ownership or disposition of our securities.

The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of our securities that is for U.S. federal income tax purposes:

•        an individual citizen or resident of the United States;

•        a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia

•        an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source, or

•        a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, Treasury regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject to change or differing interpretations, possibly on a retroactive basis.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances. In particular, this discussion considers only the redemption of our shares of common stock holders who own and hold our securities as capital assets within the meaning of Section 1221 of the Code, and does not address the potential application of the alternative minimum tax. In addition, this discussion does not address the U.S. federal income tax consequences to holders that are subject to special rules, including:

•        financial institutions or financial services entities;

•        broker-dealers;

•        taxpayers that are subject to the mark-to-market accounting rules under Section 475 of the Code;

•        tax-exempt entities;

•        governments or agencies or instrumentalities thereof;

•        insurance companies;

•        regulated investment companies;

•        regulated investment companies;

•        expatriates or former long-term residents of the United States;

•        persons that actually or constructively own 5 percent or more of our voting shares;

•        persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;

•        persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated transaction;

•        persons whose functional currency is not the U.S. dollar;

•        controlled foreign corporations; or

•        passive foreign investment companies.

This discussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, state, local or non-U.S. tax laws or, except as discussed herein, any tax reporting obligations of a holder of our securities. Additionally, this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership.

We have not sought, and will not seek, a ruling from the IRS or an opinion of counsel as to any U.S. federal income tax consequence described herein. The IRS may disagree with the descriptions herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.

THIS DISCUSSION IS ONLY A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REDEMPTION OF OUR SECURITIES IN CONNECTION WITH THE BUSINESS COMBINATION. IT DOES NOT PROVIDE ANY ACTUAL REPRESENTATIONS AS TO ANY TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES AND WE HAVE NOT OBTAINED ANY OPINION OF COUNSEL WITH RESPECT TO SUCH TAX CONSEQUENCES. AS A RESULT, EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.

Redemption Of Common Stock

If a U.S. Holder redeemd common stock into the right to receive cash pursuant to the exercise of a shareholder redemption right, for U.S. federal income tax purposes, such conversion or sale generally will be treated as a redemption and will be subject to the following rules. If the redemption qualifies as a sale of the common stock under Section 302 of the Code:

•        a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the securities.

•        The regular U.S. federal income tax rate on capital gains recognized by U.S. Holders generally is the same as the regular U.S. federal income tax rate on ordinary income, except that under tax law currently

in effect long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal income tax at reduced rates. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder’s holding period for the securities exceeds one year. The deductibility of capital losses is subject to various limitations. U.S. Holders who recognize losses with respect to a disposition of our securities should consult their own tax advisors regarding the tax treatment of such losses.

Whether redemption of our shares qualifies for sale treatment will depend largely on the total number of shares of CHAC common stock treated as held by such U.S. Holder. The redemption of common stock generally will be treated as a sale or exchange of common stock (rather than as a distribution) if the receipt of cash upon the redemption (i) is “substantially disproportionate” with respect to a U.S. Holder, (ii) results in a “complete termination” of such holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to such holder. These tests are explained more fully below.

In determining whether any of the foregoing tests are satisfied, a U.S. Holder must take into account not only the CHAC common stock actually owned by such holder, but also our the CHAC common stock that is constructively owned by such holder. A U.S. Holder may constructively own, in addition to our common stock owned directly, common stocl owned by related individuals and entities in which such holder has an interest or that have an interest in such holder, as well as any common stocl such holder has a right to acquire by exercise of an option, which would generally include common stock which could be acquired pursuant to the exercise of warrants. In order to meet the substantially disproportionate test, the percentage of our issued and outstanding voting shares actually and constructively owned by a U.S. Holder immediately following the redemption of our common stock must, among other requirements, be less than 80% of the percentage of our issued and outstanding voting and common stock actually and constructively owned by such holder immediately before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (i) all of our common stock is actually and constructively owned by such U.S. Holder are redeemed or (ii) all of our common stock actually owned by such U.S. Holder is redeemed and such holder is eligible to waive, and effectively waives, in accordance with specific rules, the attribution of shares owned by family members and such holder does not constructively own any other shares. The redemption of the common stock will not be essentially equivalent to a dividend if such redemption results in a “meaningful reduction” of a U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” U.S. Holders should consult with their own tax advisors as to the tax consequences of any such redemption.

If none of the foregoing tests are satisfied, then the redemption may be treated as a distribution a U.S. Holder generally will be required to include in gross income as dividends the amount received. Such amount will be taxable to a corporate U.S. holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its common stock (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such common stock. With respect to non-corporate U.S. Holders, dividends may be subject to the lower applicable long-term capital gains tax rate (see above) if our common stock is readily tradeable on an established securities market in the United States and certain other requirements are met. U.S. Holders should consult their own tax advisors regarding the availability of the lower rate for any cash dividends paid with respect to our common stock. After the application of those rules, any remaining tax basis a U.S. Holder has in the redeemed common stock will be added to the adjusted tax basis in such holder’s remaining common stock. If there are no remaining common stock, a U.S. Holder should consult its own tax advisors as to the allocation of any remaining basis.

Certain U.S. Holders may be subject to special reporting requirements with respect to a redemption of common stock, and such holders should consult with their own tax advisors with respect to their reporting requirements.

Appraisal Rights

Appraisal rights are not available to holders of CHAC Shares in connection with the proposed Business Combination.

Proxies and Proxy Solicitation Costs

We are soliciting proxies on behalf of our Board of Directors. This solicitation is being made by mail but also may be made by telephone or in person. CHAC and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. CHAC has engaged Morrow Sodali to assist in the solicitation of proxies for the Special Meeting. Any solicitation made and information provided in such a solicitation will be consistent with the written proxy statement and proxy card.

CHAC will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. CHAC will pay Morrow Sodali a fee of $20,000, plus disbursements, reimburse Morrow Sodali for its reasonable out-of-pocket expenses and indemnify Morrow Sodali and its affiliates against certain claims, liabilities, losses, damages and expenses for their services as our proxy solicitor. CHAC will ask banks, brokers and other nominees to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. CHAC will reimburse them for their reasonable expenses.

If you send in your completed proxy card, you may still vote your shares in person if you revoke your proxy before it is exercised at the special meeting.

CHAC Initial Stockholders

In March 2018, CHAC issued an aggregate of 1,437,500 CHAC Shares for an aggregate purchase price of $25,000. On September 14, 2018, the Company effectuated a 1.4-for-1 stock dividend resulting in an aggregate of 2,012,500 Founder Shares outstanding. The Founder Shares included an aggregate of up to 262,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor would own 20% of CHAC’s issued and outstanding shares after the Initial Public Offering (assuming the Sponsor did not purchase any Public Shares in the Initial Public Offering). The underwriters’ over-allotment option expired unexercised on February 4, 2019. As such, 262,500 CHAC Shares were forfeited resulting in 1,750,000 Founder Shares issued and outstanding. In addition, in conjunction with the closing of the Initial Public Offering, an affiliate of the Sponsor purchased 2,900,000 warrants, each warrant to purchase one CHAC Share, at a price of $0.40 per warrant. Each of our officers has a pecuniary interest in the shares held by the Sponsor.

Pursuant to a registration rights agreement between us and our initial stockholders, those stockholders are entitled to certain registration rights with respect to the CHAC Shares and CHAC Warrants held by them, as well as the underlying securities. The holders of these securities are entitled to make up to two demands that CHAC register the sale of such securities. The holders of the initial shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a business combination. CHAC will bear the expenses incurred in connection with the filing of any such registration statements.

THE BUSINESS COMBINATION PROPOSAL

The discussion in this proxy statement of the Business Combination and the principal terms of the Merger Agreement, is subject to, and is qualified in its entirety by reference to, the Merger Agreement. The full text of the Merger Agreement is attached hereto as Annex A, which is incorporated by reference herein.

General Description of the Business Combination

Business Combination with BiomX; Business Combination Consideration

On the closing date of the transactions contemplated by the Merger Agreement, the Merger Sub will merge with and into BiomX, with BiomX surviving the merger as a wholly-owned subsidiary of CHAC. All of the issued and outstanding shares and other equity interests in and of BiomX immediately prior to the merger will be canceled, and, in consideration therefor, CHAC will issue (or reserve for issuance) 16,625,000 CHAC Shares or options or warrants to purchase CHAC Shares to BiomX security holders. Additional CHAC Shares will be reserved for issuance in respect of options to purchase shares of BiomX capital stock that are issued, outstanding and unvested as of immediately prior to the effective time of the Business Combination. The issuance of CHAC securities to the securityholders of BiomX is being consummated on a private placement basis, pursuant to Section 4(a)(2) of the Securities Act. As a result of the Business Combination, an aggregate of 16,625,000 shares of CHAC common stock will be issued (or reserved for issuance) in respect of shares of BiomX capital stock, and vested options and vested warrants to purchase shares of BiomX capital stock, issued and outstanding immediately prior to the effective time of the Business Combination. Additional shares of CHAC common stock will be reserved for issuance in respect of options or warrants to purchase shares of BiomX capital stock that are issued, outstanding and unvested as of immediately prior to the effective time of the Business Combination.

CHAC currently has authorized share capital of 31,000,000 shares consisting of 30,000,000 shares of common stock with a par value of $0.0001 per share and 1,000,000 shares of preferred stock with a par value of $0.0001 per share.

After the Business Combination, assuming no redemptions of common stock for cash, CHAC’s current public stockholders will own approximately 20% of the outstanding CHAC Shares, CHAC’s current directors, officers and affiliates will own approximately 7% of the outstanding CHAC Shares, and the former stockholders of BiomX will own approximately 73% of the outstanding CHAC Shares. Assuming redemption by holders of 2,062,157 shares of CHAC’s common stock, CHAC public stockholders will own approximately 13% of the outstanding CHAC Shares, CHAC’s Sponsor and current directors, officers and affiliates will own approximately 5% of the outstanding CHAC Shares, and the former shareholders of BiomX will own approximately 82% of the outstanding CHAC Shares. Upon consummation of the Business Combination, BiomX will be a wholly-owned subsidiary of CHAC.

Assuming the Business Combination Proposal is approved, the parties to the transaction expect to close the Business Combination in October 2019.

Background of the Business Combination

CHAC 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, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a “target business.” CHAC’s efforts to identify a prospective target business were not limited to any particular industry or geographic location.

On December 18, 2018, CHAC consummated the Initial Public Offering of 7,000,000 Units. The Units sold in the Initial Public Offering were sold at an offering price of $10.00 per Unit, generating total gross proceeds of $70,000,000. Chardan Capital Markets LLC. acted as sole book-running manager of the Initial Public Offering. The securities in the offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-228533). The SEC declared the registration statement effective on December 13, 2018. CHAC granted the underwriters a 45-day option to purchase up to 1,050,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions. The over-allotment option expired unexercised on February 4, 2019.

Simultaneous with the consummation of the Initial Public Offering, we consummated the private placement of an aggregate of 2,900,000 Private CHAC Warrants, each exercisable to purchase one CHAC Share for $11.50 per share, to Mountain Wood, LLC, an affiliate of the Sponsor at a price of $0.40 per Private CHAC Warrant, generating total proceeds of $1,160,000. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. These Private CHAC Warrants are identical to the warrants underlying the Units sold in the Initial Public Offering, except that these warrants are not transferable, assignable or salable until after the completion of a business combination, subject to certain limited exceptions. Additionally, these warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees.

After deducting the underwriting discounts, offering expenses, and commissions from the Initial Public Offering and the sale of the private placement Private CHAC Warrants, a total of $70,000,000 was deposited into a trust account established for the benefit of CHAC’s public stockholders, and the remaining proceeds became available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses.

Of the gross proceeds received from the Initial Public Offering and the Private Placement Warrants, $70,000,000 was placed in a trust account. CHAC paid a total of $500,000 in underwriting discounts and commissions and $283,566 for other costs and expenses related to the Initial Public Offering.

In accordance with CHAC’s Amended and Restated Certificate of Incorporation, the amounts held in the trust account may only be used by CHAC upon the consummation of a business combination, except that there can be released to CHAC, from time to time, any interest earned on the funds in the trust account that it may need to pay its tax obligations. The remaining interest earned on the funds in the trust account will not be released until the earlier of the completion of a business combination and CHAC’s liquidation. CHAC executed a definitive agreement on December 13, 2018 and it must liquidate unless a business combination is consummated by the date that is 24 months from the closing of the Initial Public Offering, or December 18, 2020.

Immediately after closing the Initial Public Offering on December 18, 2018, the officers and directors of CHAC began to contact potential candidates for a business combination. In addition, we were contacted by a number of individuals and entities with respect to business combination opportunities.

CHAC evaluated each opportunity in the context of the screening criteria established by its management, which included:

•        Venture-backed healthcare company in the biopharma or digital health sector;

•        Public-ready management team;

•        Actively considering a public listing;

•        $200 million to $500 million initial public valuation; and

•        Upcoming catalysts to drive valuation post-business combination.

We believe our management team has a unique combination of experience as an underwriter, sponsor and advisor to SPACs and a wide and active network of relationships and experiences as an investment bank to emerging growth healthcare companies with particular focus on the biotechnology sector. Because of this combination of strengths, we were able rapidly and efficiently to evaluate a wide range of potential business combination candidates, to determine which ones met our transaction criteria, and then quickly to submit to proposals for a business combination to each of those finalist candidates.

Between December 20, 2018 and May 31, 2019, CHAC reviewed 69 potential business combination candidates and submitted nine preliminary proposals to certain of these potential targets, including its initial proposal to BiomX. The CHAC management team held frequent discussion regarding the various targets during this period both internally and with a wide range of management teams at potential targets.

With regard to those eight targets with which CHAC did not pursue a business combination:

Candidate One:    On December 21, 2018, Mr. Grossman was introduced to the chief business officer of Candidate One by a third party. Candidate One focuses on innovative treatments for liver and metabolic diseases with its lead asset at the Phase IIb level of development. On December 26, 2018, the companies held a conference call which was followed by a series of emails and telephone calls and a meeting at Candidate One’s headquarters involving Messrs. Grossman, Amusa, Kaufman and the senior management team of Candidate One. An initial proposal was presented to Candidate One’s management during the meeting at Candidate One’s offices on January 3, 2019. The proposal valued Candidate One at pre-transaction valuation of $217 million and proposed a structure that would have issued 20 million new CHAC shares to Candidate One’s shareholders and resulted in Candidate One’s shareholders owning approximately 70% of the outstanding shares in the company post-transaction assuming no redemptions. The proposal included an earnout based on the combined company’s valuation during the year of closing. Discussions with Candidate One continued during the next week. However, Candidate One informed CHAC on January 11, 2019 that it had decided to pursue a traditional initial public offering, ending discussions between the companies regarding a business combination.

Candidate Two:    On January 7, 2019, CHAC was introduced to Candidate Two by a third party. Candidate Two is focused on gene-based therapies for certain rare diseases with its lead asset at the Phase I-II level of development. Subsequently, the companies held a series of calls, emails and a meeting at Candidate Two’s headquarters and manufacturing facilities. On January 22, 2019, CHAC submitted an initial proposal to Candidate Two. The proposal valued Candidate Two at pre-transaction range of $268 million to $318 million and proposed a structure that would have issued 25 million-to-30 million new CHAC shares to Candidate Two’s shareholders and resulted in Candidate Two’s shareholders owning approximately 61%-to-66% of the outstanding shares in the company post-transaction assuming no redemptions. The proposal included an earnout based on stock price performance during the six years post-closing. The proposal included the assumption that CHAC would raise up to $70 million of additional capital in a PIPE transaction prior to closing. This initial proposal transaction was followed by a series of conference calls to discuss the structure and valuation of that proposal and its advantages relative to other alternative under consideration by Candidate Two. Discussion with Candidate Two came to an end on February 26, 2019 when the company’s CEO informed CHAC management that Candidate Two would pursue alternative funding plans.

Candidate Three:    On January 17, 2019, Mr. Grossman was introduced to the CEO of Candidate Three via email by a third party. Candidate Three is a biopharmaceutical company focused on treatments for diseases of the kidney and gastrointestinal tract with a lead asset at the Phase III level of development. Between January 18, 2019 and February 10, 2019, CHAC and Candidate Three held a series of conversations regarding the scientific, clinical, and commercial status of Candidate Three’s business. On February 11, 2019, CHAC submitted an initial proposal to Candidate Three. The proposal valued Candidate Three at a pre-transaction value of $367 million and proposed a structure that would have issued 35 million ordinary shares of CHAC and resulted in Candidate Three’s shareholders owning approximately 69% of the outstanding shares in the company post-transaction assuming no redemptions. The proposal included an earnout based on stock price performance during the two years post-closing. The proposal included the assumption that CHAC would raise up to $70 million of additional capital in a PIPE transaction prior to closing. On February 21, 2019, Messrs. Grossman and Amusa held a conference call with a leading shareholder of Candidate Three. A draft proposal was sent to the CEO of Candidate Three on March 6, 2019. Subsequently, the CEO of Candidate Three reported to Mr. Grossman that the company would be pursuing alternative funding strategies and withdrew Candidate Three from discussion.

Candidate Four:    On February 21, 2019, Mr. Jonas Grossman was introduced by a third party to the Chairman of the Board of Candidate Four via email. Candidate Four is engaged in the development of gene-based therapies focused on the oncology market with a lead asset at the Phase Ib level of development. CHAC and Candidate Four entered into a nondisclosure agreement enabling CHAC to evaluate certain proprietary clinical and commercial information regarding Candidate Four. Between March 13, 2019 and early April 2019, Messrs. Grossman and Amusa held a series of telephone conversations with the CEO and research leadership of Candidate 4 and with certain institutional

investors of that company. During April 2019, as discussions with BiomX advanced, the frequency of interaction with Candidate Four decreased and no further interaction regarding the proposal took place. The initial proposal sent to Candidate Four valued Candidate Four at a pre-transaction value of $350 million and proposed a structure that would have issued 33.25 million ordinary shares of CHAC and resulted in Candidate Four’s shareholders owning approximately 79% of the outstanding shares in the company post-transaction assuming no redemption from CHAC’s trust. The proposal included multiple earnouts based on stock price performance during the three years post-closing. As discussions advanced throughout the month of March, a revised proposal was sent out to Candidate Four. The revised proposal valued Candidate Four at a pre-transaction value of $300 million and proposed a structure that would have issued 28.25 million ordinary shares of CHAC and resulted in Candidate Four’s shareholders owning approximately 67% of the outstanding shares in the company post-transaction assuming no redemptions. The revised proposal included multiple earnouts based on stock price performance during the three years post-closing.

Candidate Five:    Because of CHAC’s investment banking and research coverage of genetic medicine companies, Candidate Five was known to the principals of CHAC as a leading private gene therapy company. Candidate Five is focused on gene-based therapies for bleeding disorders and other chronic conditions with lead asset at the Phase I/II stage of development. Subsequent to CHAC’s Initial Public Offering, Candidate 5 emerged as a priority target for a potential business combination. No discussions regarding a potential business combination with Candidate 5 or any other candidate were held prior to CHAC’s Initial Public Offering. On March 1, 2019, Mr. Grossman discussed a potential transaction with the CEO of Candidate Five. Mr. Amusa had a follow-up call with Candidate Five’s CEO and CFO and other members of the management team on March 5,, 2019. CHAC submitted an initial proposal to Candidate Five on March 28, 2019. The proposal valued Candidate Five at a pre-transaction valuation of $600 million and a proposed structure that would have issued 58.25 million ordinary shares of CHAC and resulted in Candidate Five’s shareholders owning approximately 79% of the outstanding shares in the company post-transaction assuming no redemptions. The proposal included multiple earnouts based on stock price performance during the two years post-closing. The proposal included the assumption that CHAC would raise up to $70 million of additional capital in a PIPE transaction prior to closing. CHAC did not receive any substantive response and, as discussions with BiomX advanced, CHAC did not pursue this opportunity further.

Candidate Six:    On March 10, 2019, CHAC was introduced to the CEO of Candidate Six by a third party. Candidate Six is a company engaged in the development of gene-based therapies focused on the oncology market with lead asset at the Phase I stage of development. During the two weeks following the initial introduction, discussions continued between CHAC and Candidate Six through conference calls between Messrs. Grossman and Amusa and the CEO and CFO of Candidate Six. On these calls, CHAC and Candidate Six discussed general terms of a potential transaction and the resulting ranges of ownership based on a range of potential valuations. Based on this dialogue, an initial presentation containing an overview of SPACs and background on CHAC was sent to Candidate Six on March 25, 2019. No substantive response was received, and as discussion with BiomX advanced, CHAC ended substantive discussions with Candidate Six.

Candidate Seven:    Messrs. Grossman and Amusa met initially with Candidate Seven at an industry conference during early April 2019. Candidate Seven is focused on immune system-based therapies for a variety of diseases with lead asset at the Phase I stage of development. Subsequent to this meeting, CHAC held a series of conference calls and meetings with the senior leadership of Candidate Seven. As a result of these interactions, an initial presentation containing an overview of SPACs and some brief background on CHAC was sent to Candidate Seven. During subsequent teleconferences, CHAC and Candidate Seven discussed general terms of a potential transaction and the resulting ranges of ownership based on a range of potential valuations. Because discussions with BiomX accelerated and CHAC did not receive a reply from Candidate Seven, CHAC ended substantive discussions with Candidate Seven.

Candidate Eight:    CHAC was introduced to Candidate Eight in early April 2019 via email by a third party. Candidate Eight focuses on immune system-based therapies for infectious diseases and cancer with lead asset at the Phase III stage of development. Based on subsequent discussions and meetings between Messrs. Grossman and Amusa and Candidate Eight’s leadership team, an initial presentation

containing an overview of SPACs and background on CHAC was sent to Candidate Eight. However, discussions with BiomX accelerated at this time. As a result, CHAC ended substantive discussions with Candidate Eight.

The background of CHAC’s interaction with BiomX is as follows:

On January 15, 2019, CHAC management held an internal meeting to discuss the microbiome sector as a focus for the search for a suitable target company. The current clinical programs and prospects for growth were discussed for several companies, including BiomX. Management commenced outreach both directly and to third parties regarding certain of these potential candidates, including BiomX.

On January 21, 2019, Mr. George Kaufman, CFO of CHAC, was introduced via email by a current investor in BiomX to Mr. Assaf Oron, the Chief Business Officer of BiomX. This investor was aware of BiomX’s capital-raising plans and also of CHAC’s Initial Public Offering and strategic goal to enter into a business combination with an innovative biotechnology company.

–       On January 22, 2019 CHAC and BiomX entered into a nondisclosure agreement that allowed CHAC to be able to evaluate detailed financial and clinical information concerning BiomX.

–       Between January 23, 2019 and March 5, 2019, a series of email and conference calls took place between Messrs. Amusa, Grossman, and Kaufman and BiomX management, including Jonathan Solomon, BiomX’s CEO, Mr. Oron, and Sigal Fattal, BiomX’s CFO, to discuss BiomX’s technical, strategic, commercial and capital-raising plans and the prospects for a business combination with CHAC. Messrs. Grossman and Amusa also had calls with certain of BiomX’s investors, including certain biotechnology-oriented funds and family offices to discuss a range of strategic factors that could affect a business combination between CHAC and BiomX, including the background for those investors’ interest and valuations, their willingness to roll their equity forward or to increase their investments in a possible business combination.

–       On March 4, 2019 Messrs. Grossman and Kaufman sent an initial proposal to BiomX management. The proposal valued BiomX at a pre-transaction valuation of $153 million and proposed a structure that would have issued 15.25 million new CHAC shares to BiomX’s shareholders and resulted in BiomX’s shareholders owning approximately 64% of the outstanding shares in the company post-transaction assuming no redemptions from CHAC’s trust. The proposal included two earnouts based on share price during the two years following closing. The earnout stated BiomX would receive 3 million shares if the share price reached $19.30 in 2020 and an additional 3 million shares if the share price reached $29.09. Discussions with BiomX continued during the next week.

–       On March 6, 2019, CHAC sent to BiomX a letter of intent (“LOI”) regarding a potential business combination.

–       On March 7, 2019, Messrs. Solomon and Oron presented at Chardan’s Microbiome Summit in New York. During the conference, Messrs. Grossman and Amusa and Messrs. Solomon and Oron met with several biotechnology sector investors in attendance at the conference to introduce BiomX, discuss the company’s commercial and scientific strategies, and establish dialogues with those investors about their potential interest in BiomX.

–       On March 14, 2019, BiomX responded via email to the initial LOI with questions regarding certain terms of the proposal, including the valuation range, post-transaction corporate governance, and timing and the organization schedule and related tasks necessary to complete due diligence.

–       On March 20, 2019, George Kaufman and Jonas Grossman had a conference call with Mr. Solomon and Mr. Oron to discuss the proposed LOI, including valuation ranges and the treatment of various tiers of the BiomX capital structure.

–       On March 24, 2019, Messrs. Grossman and Kaufman traveled to Israel for meetings at BiomX’s offices. The CHAC management team met with the BiomX management team and researchers. CHAC managers visited BiomX’s facilities. The respective teams reviewed the status of the proposed LOI as well as BiomX scientific, operational, and commercial strategies and the company’s readiness for a business

combination with CHAC. The BiomX and CHAC management teams negotiated certain of the terms in the initial proposal including valuation and revisions of the earnout milestones. Certain additional terms were discussed including the participation of current BiomX investors in the transaction and the introduction of a minimum cash condition to closing.

–       Between March 25, 2019 and April 4, 2019, the parties held a series of conference calls and meetings regarding both BiomX technology and the terms of a proposed business combination. Negotiations regarding the terms of the LOI took place between the CHAC’s management, CHAC’s counsel at Loeb & Loeb LLP, BiomX, and BiomX’s counsel Goodwin Proctor LLP.

–       On April 4, Messrs. Grossman and Kaufman sent BiomX a revised proposal. The proposal valued BiomX at a pre-transaction range of $153 million to $180 million and proposed a structure that would have issued 15.25 million-to-18 million new CHAC shares to BiomX’s shareholders and resulted in BiomX’s shareholders owning approximately 64%-to-73% of the outstanding shares in the company post-transaction assuming no redemptions. The proposal included three earnouts based on share price during the six years following closing. The earnout stated BiomX would receive 2 million shares if the share price reached $16.50 in 2021, an additional 2 million shares if the share price reached $22.75 in 2023 and another 2 million shares if the share price reached $29.00 in 2025.

–       On April 5, 2019, CHAC and BiomX executed the LOI.

–       Between April 8, 2019 and June 14, 2019, Messrs. Solomon and Oron and other members of the BiomX management and scientific advisory teams, along with Messrs. Grossman, Amusa, and Kaufman met in various combinations and confidentially in the United States and Europe with fund managers, including certain stockholders of CHAC, to discuss BiomX and the proposed business combination with CHAC to determine the potential level of market interest in a transaction between BiomX and CHAC. Negotiations continued in several areas including setting an initial minimum cash condition of between $50 million and $70 million. Discussions regarding the valuation range also continued. Feedback from the meetings with certain stockholders of CHAC and BiomX resulted in refinement of certain terms regarding the participation of current shareholders and the minimum cash condition.

–       On May 9, 2019, during a Board of Directors conference call meeting to review CHAC’s quarterly financial disclosure and Form 10-Q filing, CHAC management briefed the CHAC Board of Directors on the progress of a search for a business combination target and provided an update on the status of talks with BiomX.

–       On May 21, 2019, a conference call took place to discuss timing and plans for continuing due diligence between BiomX and CHAC. The conference call was attended by Messrs. Grossman, Kaufman, Amusa, and support staff from Chardan; Messrs. Solomon, Oron, Fattal and support staff from BiomX; Loeb & Loeb LLP; and Goodwin Proctor LLP. Later on that same date, a conference call was held between Loeb & Loeb LLP, Goodwin Proctor LLP, and partners from Marcum LLP and Brightman Almagor Zohar & Co. (the Israel member firm of Deloitte Touche Tohmatsu Limited, “Deloitte Israel”), CHAC’s and BiomX’s auditors, respectively, to discuss required review, audit, disclosure, ongoing diligence procedures, and timing of tasks to be undertaken by all parties.

–       On May 23, 2019, CHAC provided an initial draft merger agreement to BiomX. Negotiations of transaction terms continued. The parties also discussed the participation of certain BiomX stock option holders and warrant holders in the transaction.

–       Between May 22, 2019 and July 16, 2019, CHAC continued its review of due diligence materials.

–       On June 20, 2019, Mr. Amusa held a telephone call with one of BiomX’s commercial partners to discuss the status and progress of BiomX’s cooperation with that partner and to review the prospects for continued clinical cooperation in the future.

–       In May and June 2019, the various deal teams negotiated the terms of a definitive agreement between CHAC and BiomX. During those negotiations the parties narrowed the valuation range being discussed, finalized the post-closing composition of the new Board of Directors, discussed a minimum cash condition for closing, and reviewed a range of potential structures for the transaction, among other deal

terms. With regard to the transaction structure, the parties analyzed and discussed the legal, financial, operational, tax, and strategic impact of different structures on the investors of both BiomX and CHAC before agreeing on final terms.

–       On June 24, 2019, Mr. Grossman traveled to Israel to conduct negotiations on remaining business terms for a business combination between CHAC and BiomX. He returned to New York on June 25, 2019.

–       On June 26, 2019, CHAC held a special meeting of its Board of Directors. Attending the meeting were Messrs. Grossman, Amusa, and Kaufman along with independent directors Messrs. Rossen, Kusseluk, Rice, Gnedy, and Giroux. Also attending the meeting was Loeb & Loeb LLP. Mr. Grossman presented a review of the overall search process and a summary of the status of negotiations with BiomX including the remaining business issues that had yet to be resolved. He informed the Board of Directors that the talks were either going to conclude shortly and that the Board of Directors would be called on to review a proposed merger agreement and related document or that CHAC would move on to consideration a new round of potential merger candidates that had been identified but with whom discussion had been discontinued pending resolution of negotiations with BiomX.

–       On June 27, 2019, Mr. Grossman and Messrs. Solomon and Oron held a conference call and discussed certain negotiation points, including CHAC’s willingness to forego certain amounts of Founder Shares in the event minimum levels of cash did not remain in CHAC’s trust account at the time of the potential business combination, and BiomX’s willingness to exclude certain vested or unvested employee warrants and options from inclusion in merger consideration at the time of the potential business combination. The parties agreed to certain final business terms and informed their respective counsels that an agreement in principal had been reached, pending final documentation and respective Board of Directors’ approvals.

–       Later in the day on June 27, 2019, a conference call was held attended by the respective working group members including Mr. Grossman from CHAC, Messrs. Solomon and Oron and Ms. Fattal from BiomX, Loeb & Loeb LLP and Goodwin Proctor LLP, Deloitte Israel, and certain other advisors to both CHAC and BiomX. The group reviewed the general agreement in principal on certain terms including final valuation, treatment of BiomX option holders and warrant holders, and the minimum cash condition.    The working group discussed plans to finalize transaction documents, including the merger agreement and ancillary required documents and regulatory filings, and the timeline for all parties to complete their work prior to a public announcement and subsequent schedule of events prior to a proposed closing of the business combination.

–       On July 10, 2019 the CHAC Board of Directors held a special meeting to review the transaction with BiomX. At this meeting, CHAC’s Board of Directors approved the transaction and authorized CHAC to enter into the definitive agreement with BiomX to effect the business combination between BiomX and CHAC subject to there being no material changes in the business terms of the Merger Agreement between that date and the approval of the transaction by the BiomX Board of Directors.

–       On July 15, 2019 the BiomX Board of Directors approved the Merger Agreement and related agreements to effect the business combination between BiomX and CHAC.

–       On July 16, 2019, the signing of the Merger Agreement by CHAC and BiomX was announced to the public.

–       On July 17, 2019, CHAC filed a Current Report on Form 8-K including a press release, a copy of the Merger Agreement, and a presentation for investors.

CHAC’s Board of Directors’ Reasons for the Approval of the Business Combination

CHAC’s Board of Directors considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Merger Agreement and the Business Combination, including but not limited to, the following material factors:

•        Phage represents a potentially disruptive and emerging technology.    BiomX is a preclinical stage microbiome product discovery company developing customized, precision phage products and

therapies to improve the appearance of acne-prone skin and treat medical conditions related to the presence of specific strains of harmful bacteria that emerging science suggests may be causative agents in acne-prone skin and chronic diseases such as inflammatory bowel disease (IBD), primary sclerosing cholangitis (PSC), and colorectal cancer. BiomX discovers and validates proprietary bacterial targets and customizes natural and engineered phage cocktails against these specific targets, to overcome the limitations of antibiotic therapies, such as drug resistance and the lack of precision in antibiotic antibacterial activity which may lead to dysbiosis. Emerging preclinical science is showing harmful bacterial may play a role in acne (P. acnes), IBD (K. pneumoniae), PSC (K. pneumoniae), and/or colorectal cancer (F. nucleatum); and, phage technology may be a precision tool to reduce or eliminate specific strains of harmful bacteria without exposing patients to risks of eliminating beneficial bacteria through the use of antibiotics.

•        The safety of phage therapies has been discussed by the U.S. FDA.    Human exposure to phages occurs every day. Certain bacteriophage cocktails are generally recognized as safe (GRAS) under U.S. food laws and have been approved as food additives. During a July 10, 2017 session at the FDA (“Bateriophage Therapy: Scientific and Regulatory Issues Public Workshop”), Doran Fink, MD, PhD, of the Center for Biologics Evaluation and Research at the FDA stated that phage target specific bacteria and are presumed not to affect human cells and tissue. Indeed, as discussed in the same workshop, the FDA has not had requirements for general GLP toxicology studies for phage therapies. Although it is not established that the use of phage cocktails in food additives indicates that any future phage products developed by BiomX will be safe (particularly if higher doses will be required to have a clinically-meaningful impact), it is our opinion that existing FDA precedents on food additives, the FDA’s 2017 Workshop comments on phage safety, and the associated historical evidence of phage safety increase the probability BiomX’s products will be deemed safe if the FDA ultimately deems BiomX’s products effective to treat specific medical indications. Potentially disruptive biotechnologies associated with safety have increased likelihood to meet unmet medical needs in large chronic disease markets given desires for wide safety margins.

•        BiomX targets large market opportunities with potentially safe phage cocktails.    Due to the safety of phage technologies so far, BiomX is applying its technologies in larger, more attractive chronic disease markets. EvaluatePharma estimates the global IBD and colorectal cancer markets, respectively, generated $17.7 billion and over $8.4 billion in prescription sales in 2018. We estimate that the prevalence of PSC in the United States is approximately 30,000 patients. For example, a rare disease drug price for PSC of $125,000 or more annually would provide for a total addressable U.S. PSC market opportunity of over $3.5 billion in sales. BiomX is also targeting the potentially lower-risk cosmetic market for the product candidate that may improve the appearance of acne-prone skin. Due to the potential safety of phage, commercialization of a cosmetic product to improve the appearance of acne-prone skin with BiomX’s global partner may occur without the need for FDA approval. WiseGuy Reports estimates the market for cosmetic treatments for acne-prone skin in developed markets during 2018 to exceed approximately $4 billion.

•        Multiple clinical readouts could create value inflection points in the years ahead.    BiomX targets to generate proof-of-concept results in its first clinical trial in acne-prone skin by the first quarter of 2020, with results from the second clinical trial by the end of 2020. BiomX targets generating Phase 1 data in IBD by the end of 2020. PSC Phase 1/2 data are targeted by the end of 2021. If one or more of the clinical datasets results in positive results, the potential for BiomX to see future commercial successes may be enhanced.

•        BiomX has diversified paths to future revenues and profits.    BiomX’s therapeutic programs target a diversified set of markets cited above, enabling potential future commercial successes to not be entirely dependent on the success of a single product candidate or on the patient populations, reimbursement policies, or competing therapeutic agents associated with a particular commercial market. Given BiomX’s platform technologies, the possibility of expanding the uses of BiomX’s technologies into new indications may create strategic options that further diversify potential future revenue and profit streams.

•        High scientific barriers to entry exist to replicate BiomX’s capabilities.    BiomX’s technologies are notable for microbiome (bacterial) biology, phage (viral) biology, computational biology (through the

December acquisition of RondinX), and synthetic biology capabilities generated in house and from the research of pre-eminent thought leaders at the Weizmann Institute and MIT. Replicating competencies in microbiome biology, phage biology, computational biology, and synthetic biology is a significant barrier, which potentially attracted the interest of BiomX’s large cap strategic investors.

•        Support exists from preeminent scientific sponsors and founders.    BiomX’s technology is based on the research and continuing work of Profs. Rotem Sorek, Ph.D., Eran Elinav, M.D., Ph.D., and Eran Segal, Ph.D., of The Weizmann Institute; and Professor Timothy K. Lu, M.D., Ph.D., of MIT. The scientific founders lead microbiome, phage, and synthetic biology research that has seen widespread publication in respected peer-reviewed articles. The quality and credibility of BiomX’s sponsors is a meaningful differentiator and a competitive advantage as BiomX develops its therapeutic portfolio. For example, due to the relationships of the scientific founders, BiomX has been able to obtain access to a potentially pathological strain of Klebsiella pneumoniae for the IBD program.

•        BiomX has intellectual property that is intended to generate important barriers to entry.    BiomX seeks to protect its programs with intellectual property related to: phage combinations and cocktails that create new therapeutic functionality, engineering to create synthetic phage cocktails, bacterial targets for eradication and therapies targeting such bacteria, proprietary target discovery tools including the use of data analytic techniques, new formulations including novel topical gels, and innovative manufacturing techniques. BiomX’s intellectual property may represent a strategic advantage in general but particularly at the early phases of microbiome-targeted medicines where BiomX’s technology may serve as a valuable foundation for broader use in an emerging industry where BiomX may capture economic benefits.

•        BiomX has an experienced and proven management team.    The BiomX management team has a successful track record managing emerging growth biotechnology companies from early stages through commercialization. Prior to joining BiomX, CEO Jonathan Solomon was co-founder, president, and CEO of ProClara (formerly NeuroPhage) where the company raised more than $100 million and launched clinical trials during his tenure. Chief Business Officer Assaf Oron held various positions including executive vice president of corporate development and executive vice president of strategy at Evogene, an agricultural biotechnology company, and served as CEO of ChondroSite, a biotechnology company. Chief Medical Officer Dr. Sailaja Puttagunta was most recently Vice President, Development at Iterum Therapeutics, a clinical-stage pharmaceutical company developing antibiotics against multi-drug resistant pathogens. Prior to Iterum, Dr. Puttagunta served as VP, Medical Affairs for Anti-infectives at Allergan from early 2015 and was the VP of Development and Medical Affairs at Durata Therapeutics, Inc. prior to its acquisition by Actavis plc. Prior to Durata, Dr. Puttagunta led teams within clinical development and medical affairs on various antibiotic compounds at Pfizer Inc.

•        BiomX has support and validation from leading global commercial partners.    BiomX is working with a leading multinational cosmetic company on studies of its acne-prone skin product candidate. The Company is working with Janssen, a unit of Johnson & Johnson, on biomarker discovery for its IBD treatment. The interest and support of these commercial partners enhances BiomX’s research and commercialization potential.

•        Continued participation by leading biotech private investors.    BiomX shareholders include OrbiMed Healthcare Fund Management, Johnson & Johnson, Takeda Pharmaceuticals, Seventure, and 8VC. No current investors are selling shares during the Business Combination and all have agreed to vote in favor of the transaction. We believe the research and due diligence done by these investors represents a validation of BiomX’s technology, strategies, and management.

•        Industry Trends and the Business and Financial Condition and Prospects of BiomX.    The board is knowledgeable about the biotechnology industry and considered BiomX’s business, financial condition, results of operations (including BiomX’s favorable cash burn profile) and future growth prospects. The Board discussed BiomX’s current prospects for growth in executing upon and achieving BiomX’s business plans. The Board considered these potential prospects as they might have an impact on the future per share valuation of BiomX relative to the $10.00 per share valuation at which the Merger Agreement was negotiated.

•        Other Alternatives.    The Board’s belief is that the proposed Business Combination represents the best potential business combination for the Company based upon the process utilized to evaluate and assess other potential acquisition targets, and the Board’s and management’s belief that such processes had not presented a better alternative.

•        Terms of the Merger Agreement.    The Board considered the terms and conditions of the Merger Agreement and the transactions contemplated thereby including the negotiated valuation of $10.00 per share relative to the results of the Company’s financial analysis of BiomX’s potential future valuation.

CHAC’s Board of Directors also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination, including, but not limited to, the following:

•        Benefits Not Achieved.    The risk that the potential benefits of the Business Combination may not be fully achieved, or may not be achieved within the expected timeframe.

•        Liquidation of CHAC.    The risks and costs to CHAC if the Business Combination is not completed, including the risk of diverting management focus and resources from other businesses combination opportunities, which could result in CHAC being unable to effect a business combination by December 2020 and force CHAC to liquidate and the warrants to expire worthless.

•        Stockholder Vote.    The risk that CHAC’s stockholders may fail to provide the votes necessary to effect the Business Combination.

•        Closing Conditions.    The fact that completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within the Company’s control.

•        Litigation.    The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

•        Fees and Expenses.    The fees and expenses associated with completing the Business Combination.

•        Other Risks.    Various other risks associated with the Business Combination, the business of the Company and the business of BiomX described under the section entitled “Risk Factors.”

In addition to considering the factors described above, the Board of Directors also considered that:

•        Interests of Certain Persons.    Some officers and directors of the Company may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of the Company’s stockholders (see The Business Combination Proposal — Interests of Certain Persons in the Business Combination”). Our independent directors reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the Board, the Merger Agreement and the Business Combination.

The Board of Directors concluded that the potential benefits that it expected CHAC and its stockholders to achieve as a result of the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, the Board of Directors unanimously determined that the Merger Agreement and the Business Combination were advisable, fair to, and in the best interests of, CHAC and its stockholders.

Summary of CHAC Financial Analysis

The following is a summary of the material financial analyses prepared and reviewed by CHAC in connection with the valuation of BiomX. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by us nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by the Board of Directors. We may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be our view of the actual value of BiomX. Some of the summaries of the financial analyses set forth

below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by us. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying our financial analyses and our Board of Directors’ recommendation.

In performing our analyses, we made numerous material assumptions with respect to, among other things, timing of clinical trials, patient enrollment, timing of receipt of regulatory approvals that may be needed, characterization of the product candidates, the timing of, and amounts of, any royalty payments, milestone payments or other payments due to third parties by BiomX, the entry by BiomX into license or collaboration agreements, market size, commercial efforts, industry performance, general business and economic conditions and numerous other matters, many of which are beyond the control of CHAC, BiomX or any other parties to the Business Combination. None of BiomX, CHAC, or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of BiomX do not purport to be appraisals or reflect the prices at which BiomX shares may actually be valued. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before July 15, 2019 (the last trading day before the public announcement of the Business Combination) and is not necessarily indicative of current market conditions.

For purposes of evaluating BiomX’s financial condition and in connection with CHAC’s preparation of projections, CHAC management was provided with documents from BiomX including forward-looking top-line cash expense projections and market sizing based on disease prevalence. Based on CHAC’s experience and professional judgment, CHAC applied certain adjustments to those cash expense estimates for modeling purposes. CHAC’s assumptions used in connection with its valuation analysis were based in part on BiomX’s projected expenses, but forward looking revenues were derived by CHAC from internal research and proprietary modeling, without BiomX’s participation or review. See “Certain CHAC Forecasts.”

Selected Initial Public Offering Market Analysis

CHAC reviewed certain financial information of BiomX and the structure of the proposed Business Combination and compared it to corresponding financial information of certain recent initial public offerings (in this section) and certain publicly-traded companies (in the next section) that CHAC selected based on CHAC’s experience and professional judgment. Although none of the selected companies is directly comparable to BiomX, the companies listed below were chosen by CHAC, among other reasons, because they successfully completed initial public offerings and they were microbiome and related companies with what we consider comparable assets comparable clinical stage assets and with certain operational, business and/or financial characteristics that, for purposes of CHAC’s analysis, may be considered similar to those of BiomX. Since BiomX intends to initiate first human studies of BX001 in 2019, CHAC considers the relevant comparable companies to be clinical-stage companies. (We additionally note the absence of publicly-traded, U.S.-listed pre-clinical microbiome companies.)

However, because none of the selected companies is exactly the same as BiomX, CHAC believed that it was inappropriate to, and therefore did not rely solely on the quantitative results of the selected initial public offering analysis. Accordingly, CHAC also made qualitative judgments, based on its experience and professional judgment, concerning differences between the operational, business and/or financial characteristics of BiomX and the selected companies to provide a context in which to consider the results of the quantitative analysis.

CHAC reviewed and compared pre-money and post-money equity values for the initial public offerings of selected companies based on information obtained from public filings, publicly available information, and available research. Based on this analysis of microbiome initial public offerings, which CHAC deemed relevant based on its professional judgment and expertise, CHAC applied a band of plus or minus 25% to the mean post-money valuation of these transactions.

The selected companies’ Initial Public Offering Market Analysis is set forth below:

CHAC divided the post-money equity value for each comparable initial public offering by the number of pro forma company shares outstanding, assuming no redemptions from trust. CHAC then took the average of this calculation across the three transactions, which equaled $21.48 per share. We then derived a range around that average by adding or subtracting 25% of that average. This analysis resulted in the following implied per share equity value ranges for the BiomX shares:

CHAC compared these ranges to the $10.00 valuation per CHAC Share proposed to be paid to the holders of the BiomX shares in the form of newly issued CHAC Shares pursuant to the Merger Agreement.

Selected Microbiome Public Comparable Company Analysis

CHAC reviewed certain financial information of BiomX and compared it to certain publicly traded companies, selected based on CHAC’s experience and professional judgment.

Because none of the selected companies is exactly the same as BiomX, CHAC believed that it was inappropriate to, and therefore did not rely solely on the quantitative results of the selected public company analysis. Accordingly, CHAC also made qualitative judgments, based on its experience and professional judgment, concerning differences between the operational, business and/or financial characteristics of BiomX and the selected companies to provide a context in which to consider the results of the quantitative analysis.

CHAC considered certain financial and operating data for publicly traded microbiome and related genetic medicine-oriented companies that CHAC deemed relevant for analysis. The selected companies were:

•        Kaleido Biosciences, Inc.

•        Evelo Biosciences, Inc.

•        Seres Therapeutics, Inc.

None of the selected companies have characteristics identical to BiomX. These companies have greater resources than does BiomX and their product candidates may be more advanced than those of BiomX. However, CHAC selected these companies based on its experience and professional judgment. An analysis of selected publicly traded companies is not purely quantitative; rather it involves complex consideration and judgements concerning differences in financial and operating characteristics of the selected companies and other factors that could affect the public trading values of the companies reviewed. CHAC believed that it was inappropriate to, and therefore did not, rely solely on the quantitative results of the selected public company analysis. Accordingly, CHAC also made qualitative judgments, based on its experience and professional judgment, concerning differences between the operational, business and/or financial characteristics of BiomX and the selected companies to provide a context in which to consider the results of the quantitative analysis.

Because BiomX’s projected revenues would be expected to become material after 2025, CHAC calculated the long-term forward revenue multiples for the selected companies based on information it obtained from public filings and from Chardan Equity Research.

Based on experience and professional judgment, CHAC applied a range of forward multiples to BiomX’s long-term revenues in each of the three forecast scenarios to derive enterprise value. CHAC then calculated an average enterprise value across the multi-year forecast period. CHAC then derived equity value by adding the forecast net cash balance to each enterprise value, and then divided the aggregate equity values by shares outstanding to obtain an estimated equity value per share.

The selected company analysis indicated an implied per share reference ranges shown in the table below for each of the Case A, Case B, and Case C Forecasts as set forth in the section entitled “Certain Forecasts” below.

CHAC compared these ranges to the $10.00 valuation per CHAC Share proposed to be paid to the holders of the BiomX shares in the form of newly issued CHAC Shares pursuant to the Merger Agreement.

Discounted Cash Flow Analysis

CHAC performed discounted cash flow analyses of BiomX based on Case A Forecasts, Case B Forecasts and Case C Forecasts as set forth below, all of which forecasts were produced by CHAC based on information provided by BiomX. A discounted cash flow analysis is an established valuation method used to estimate the “present value” of future cash inflows of an asset or investment in order to estimate the attractiveness of the investment opportunity. The “present value” can be calculated by discounting the future cash flows at a discount rate (weighted average cost of capital, or “WACC”) that considers opportunity costs of capital, the return that investors expect, and the investment’s exposure to macroeconomic or systemic risks, and other appropriate factors. A discounted cash flow analysis can also be adapted to fit the specifics of a certain sector like the microbiome sector. However, it should be understood that the microbiome sector is still a new area of focus, the regulatory approval pathway for novel and engineered phage is uncertain, and it is inherently unreliable to predict the cash flows for a preclinical stage company. Moreover, the analysis assumes that BiomX will be treated as a cosmetic product and there can be no assurance, as discussed in “Risk Factors” that regulators will not object to this approach.

In conducting discounted cash flow analyses across the cases presented, CHAC calculated ranges of BiomX equity per share values by calculating, using the mid-year convention, present values as of June 30, 2019 using WACCs ranging from 13.4% to 15.4%. CHAC additionally considered or generated (a) risk-adjusted sales estimates for BiomX’s products in acne-prone skin, IBD, PSC, and colorectal cancer, (b) a full income statement, a full cash flow statement, and a full balance sheet, (c) BiomX’s estimated net cash balance as of June 30, 2019 of approximately $40 million, based on the internal data provided by BiomX management, (c) an assumed $70 million equity financing in 2019 at $10 per share net proceeds to support the development of products in acne-prone skin, IBD, PSC, and colorectal cancer. CHAC divided the BiomX enterprise value by the pro forma fully diluted BiomX shares as at the estimated close of the Business Combination to derive equity value per share ranges listed below.

This analysis resulted in the following implied per share equity value ranges for the BiomX shares:

CHAC compared these ranges to the $10.00 valuation per CHAC Share proposed to be paid to the holders of the BiomX shares in the form of newly issued CHAC Shares pursuant to the Merger Agreement.

General

In arriving at BiomX valuations under various scenarios and cases, CHAC made assumptions and determinations on the basis of its professional judgment and experiences, independently of BiomX, after reviewing the results of various financial analyses and other diligence. The financial analyses above and other diligence should not be considered determinative as to perspectives or views of the BiomX management or Board, as relates to whether the current or a different consideration is fair. The ultimate consideration for the Business Combination was established through arm’s-length negotiations between BiomX and CHAC prior to approval by the BiomX and CHAC boards.

Certain CHAC Forecasts

BiomX is a preclinical stage microbiome company expecting to start a first clinical trial by the end of 2019, and as such does not yet have any revenue-generating products, and thus does not make public its long-term financial forecasts driven by the potential of its phage products. In connection with BiomX’s Board of Directors’ evaluation of the Business Combination, BiomX’s management did not prepare long-range, risk-adjusted revenue projections but did provide expense estimates for the years 2019 through 2022, which were based on numerous assumptions and qualifications believed by BiomX to be reasonable. The expense forecasts were provided to the BiomX Board of Directors and to CHAC. CHAC conducted additional analyses, independently of BiomX, to assess the risk-adjusted revenue prospects of acne (assuming the product candidate will be marketed as a cosmetic), IBD, PSC, and colorectal cancer products by relying on assumptions, none of which were approved by BiomX, about the robustness of BiomX’s technologies, the likelihood of the emergence of phage as a therapeutic platform, regulatory postures around phage technology, and individual product probabilities of success, launch timing, pricing, pricing growth, market growth, phage market penetration, BiomX product candidates’ market share, effects from competition and certain other factors affecting the commercial prospects of BiomX’s product candidates. Factors considered and assumptions made by CHAC are extremely uncertain and difficult to predict, with many being beyond the control of BiomX or its competitors as discussed in the section titled “Risk Factors.” CHAC thought it appropriate to prepare forecasts representing three cases (A, B, and C) reflecting a range of risk-adjusted commercial outcomes on BiomX’s portfolio of product candidates, none of which has received any regulatory or marketing approvals. As such, there can be no certainty that the forecasts presented will be realized or that BiomX will ever receive regulatory approval required in connection with any product candidate or achieve profitability.

CHAC’s management has prepared the prospective financial information set forth below to present three cases (A, B, and C) reflecting a range of risk-adjusted commercial outcomes on BiomX’s portfolio of product candidates, none of which has received any regulatory or marketing approvals. The three cases represent three potential outcomes with revenue variations over the three cases (A, B, and C) driven only by differences in various assumptions relating to product launch probabilities. These assumptions are based on the industry-based expertise of CHAC’s management as well as an assessment undertaken by CHAC of BiomX’s internal scientific data.

For all three cases, projected cash expenses for fiscal years 2019 through 2022 were based on financial estimates provided by BiomX management, deemed to be reasonable by CHAC (shown below). Based on CHAC’s experience and professional judgment, CHAC applied certain adjustments to those cash expense estimates for modeling purposes. Projected costs beyond fiscal year 2022 were sales volume dependent and derived solely from CHAC modeling. The projected expenses provided by BiomX are cash expense projections only and were based on a number of assumptions considered to be reasonable by BiomX under the circumstances. BiomX does not intend to update the cash expense data furnished to CHAC nor does it intend to make public such expense projections in the future.

____________

(1)      Does not include transaction expenses.

(2)      Projected costs are estimates, which include projected cash flows.

The accompanying prospective financial information was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the SEC, nor for GAAP or other foreign or international accounting standards respect to prospective financial information, but, in the view of CHAC’s management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management’s knowledge and belief, the expected course of action and the expected future financial performance of the Company. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this proxy statement are cautioned not to place undue reliance on the prospective financial information.

Neither CHAC’s independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information.

The combined company does not intend to update or otherwise revise the prospective financial information to reflect circumstances existing since its preparation or to reflect the occurrence of unanticipated events, even in the event that any or all of the underlying assumptions are shown to be in error. Furthermore, the combined company does not intend to update or revise the prospective financial information to reflect changes in general economic or industry conditions.

Case A Forecasts (15.4% WACC)

Case B Forecasts (15.4% WACC)