BiomX Inc. Receives Notice of Non-Compliance with NYSE American Continued Listing Standards

Rhea-AI Summary

BiomX received a notice of non-compliance from NYSE American on May 23, 2024, due to failing to meet stockholders' equity requirements. The company has a capital deficiency of $9.54 million and reported losses for the past five fiscal years. The notice does not immediately affect the trading of BiomX shares, which will continue under the symbol 'PHGE' with a '.BC' designation for below compliance. BiomX must submit a compliance plan by June 22, 2024, and gain compliance by November 23, 2025, to avoid delisting. The company expects to resolve the equity issue by converting preferred stock to common stock, pending shareholder approval in July 2024.

Positive

• BiomX expects to resolve equity deficiency by converting $32.4 million of preferred stock to common stock.
• The company raised $50 million through a private investment in public equity.
• BiomX shares will continue to trade on NYSE American under the symbol 'PHGE'.

Negative

• BiomX has a total stockholders' capital deficiency of $9.54 million as of March 31, 2024.
• The company reported losses for the past five fiscal years ending December 31, 2023.
• Failure to meet NYSE American's equity requirements could lead to delisting.
• BiomX must submit a compliance plan by June 22, 2024, and achieve compliance by November 23, 2025, to avoid delisting.

Insights

Financial Analyst

BiomX's recent notice of non-compliance with NYSE American listing standards presents notable implications for investors. The primary concern is the company's $9.54 million stockholders' capital deficiency as of March 31, 2024. This deficiency stems from sustained operational losses over five years, which is a red flag regarding the company's financial health and operational efficiency.

BiomX's acquisition of Adaptive Phage Therapeutics, Inc. and the subsequent $50 million investment didn't immediately rectify equity issues due to accounting standards. This indicates a disjunction between cash availability and equity health, posing risks related to liquidity and financial stability.

For an investor, the upcoming July 2024 stockholders' meeting will be important as it could approve the reclassification of funds, potentially resolving the equity deficiency. However, the uncertainty surrounding the approval and the subsequent ability to meet listing requirements remains a concern. In the short-term, the stock might face volatility due to these uncertainties, while in the long-term, the company's ability to stabilize its financials will determine its market performance.

Overall, investors should closely monitor BiomX's compliance plan and the outcomes of the stockholders' meeting, as these will significantly impact the company's listed status and financial health.

Market Research Analyst

From a market perspective, BiomX's non-compliance notice highlights vulnerabilities in its operational strategy and financial planning. The company's focus on phage therapies, a relatively niche and innovative area, necessitates robust financial health to sustain R&D and clinical trials.

The immediate impact on the stock market may be a decline in stock price due to investor anxiety over potential delisting and ongoing financial instability. Additionally, the designation of 'below compliance' (.BC) can shape investor sentiment negatively, leading to reduced market confidence.

However, the company's strategy to reclassify $32.4 million to stockholders' equity indicates proactive steps toward resolving the issue. This move could restore investor confidence if executed successfully. Investors should also consider the broader market context, where biotech firms often face significant financial challenges but also have high growth potential if they achieve clinical and commercial milestones.

In conclusion, while the immediate outlook appears challenging, BiomX's ability to implement its compliance plan effectively and realign its financial strategy will be pivotal. Investors should weigh the risk-reward ratio, considering the speculative nature of biotech investments.

GAITHERSBURG, Md. and NESS ZIONA, Israel, May 30, 2024 (GLOBE NEWSWIRE) -- BiomX Inc. (NYSE American: PHGE) (“BiomX” or the “Company”), a clinical-stage company advancing novel natural and engineered phage therapies that target specific pathogenic bacteria, today announced that it received written notification (“the Notice”) from the NYSE American LLC (“NYSE American”), dated May 23, 2024, stating that the Company is no longer in compliance with continued listing standards, as set forth in Sections 1003(a)(i), 1003(a)(ii), and 1003(a)(iii) of the NYSE American Company Guide (the “Company Guide”).

Generally, Section 1003(a)(i) requires a listed company to have stockholders’ equity of $2 million or more if the listed company has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. Section 1003(a)(ii) requires a listed company to have stockholders’ equity of $4 million or more if the listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years. Section 1003(a)(iii) requires a listed company to have stockholders’ equity of $6 million or more if the listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years. BiomX reported a total stockholders’ capital deficiency of $9,544,000 as of March 31, 2024, and losses from continuing operations and/or net losses in its five most recent fiscal years ended December 31, 2023.

The Notice has no immediate impact on the listing of the Company’s shares of common stock, par value $0.0001 per share (the “Common Stock”), which will continue to be listed and traded on the NYSE American during this period, subject to the Company’s compliance with the other listing requirements of the NYSE American. The Common Stock will continue to trade under the symbol “PHGE”, but will have an added designation of “.BC” to indicate the status of the Common Stock as “below compliance”. The notice does not affect the Company’s ongoing business operations or its reporting requirements with the Securities and Exchange Commission.

BiomX must submit a plan of compliance (the “Plan”) by June 22, 2024, addressing how it intends to regain compliance with the continued listing standards by November 23, 2025. The Company has begun to prepare its Plan for submission to the NYSE American by the June 22, 2024, deadline.

If the NYSE American accepts the Company’s Plan, the Company will be able to continue its listing during the Plan period and will be subject to continued periodic review by the NYSE American staff. If the Plan is not submitted, or not accepted, or is accepted but the Company is not in compliance with the continued listing standards by November 23, 2025, or if the Company does not make progress consistent with the Plan during the Plan period, the Company will be subject to delisting procedures as set forth in the NYSE American Company Guide.

As previously reported, on March 15, 2024, the Company consummated an acquisition of Adaptive Phage Therapeutics, Inc. and a private investment in public equity resulting in aggregate gross proceeds of approximately $50 million. Due to certain accounting standards, these proceeds were not registered as equity of the Company and therefore were not taken into consideration for the purposes of the Company’s compliance with the listing standards of the Company Guide. At a stockholders meeting that is expected to take place in July 2024, the Company’s stockholders will be asked to approve the conversion of the Company’s Series X Non-Voting Convertible Preferred Stock into Common Stock. If approved, at least $32.4 million will be reclassified to stockholders equity, and the Company expects that would resolve the issue of the stockholders equity deficiency.

The Company is committed to achieving compliance with the NYSE American’s requirements. However, there can be no assurance that the Company will be able to achieve compliance with the NYSE American’s continued listing standards within the required timeframe.

About BiomX
BiomX is a clinical-stage company leading the development of natural and engineered phage cocktails and personalized phage treatments designed to target and destroy harmful bacteria for the treatment of chronic diseases with substantial unmet needs. BiomX discovers and validates proprietary bacterial targets and applies its BOLT (“BacteriOphage Lead to Treatment”) platform to customize phage compositions against these targets. For more information, please visit www.biomx.com, the content of which does not form a part of this press release.

Safe Harbor
This press release contains express or implied “forward-looking statements” within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “target,” “believe,” “expect,” “will,” “may,” “anticipate,” “estimate,” “would,” “positioned,” “future,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. For example, when BiomX discusses its expectation to regain compliance with NYSE American Continued Listing Standards, the timing of the upcoming stockholders meeting and approval of the relevant resolutions there as well as the accounting reclassification of certain liabilities into equity it is using forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on BiomX management’s current beliefs, expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of BiomX’s control. These risks and uncertainties include, but are not limited to, the following: BiomX’s ability to timely submit its Plan to the NYSE American, the acceptance of its Plan by the NYSE American and BiomX’s ability to regain compliance with the listing standards set forth in the Company Guide by November 23, 2025. Therefore, investors should not rely on any of these forward-looking statements and should review the risks and uncertainties described under the caption “Risk Factors” in BiomX’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 4, 2024, and additional disclosures BiomX makes in its other filings with the SEC, which are available on the SEC’s website at www.sec.gov. Forward-looking statements are made as of the date of this press release, and except as provided by law BiomX expressly disclaims any obligation or undertaking to update forward-looking statements.

BiomX, Inc.
Assaf Oron
+97254-2228901
assafo@biomx.com

FAQ

Why did BiomX receive a notice of non-compliance from NYSE American?

BiomX received the notice due to a stockholders' equity deficiency of $9.54 million and losses over the past five fiscal years.

What is the deadline for BiomX to submit a compliance plan to NYSE American?

BiomX must submit a compliance plan by June 22, 2024.

What will happen if BiomX fails to meet NYSE American's compliance requirements?

If BiomX fails to meet the requirements by November 23, 2025, it will face delisting procedures.

How does the non-compliance notice affect the trading of BiomX shares?

BiomX shares will continue to trade on NYSE American under the symbol 'PHGE' with a '.BC' designation for below compliance.

What is BiomX's plan to address the stockholders' equity deficiency?

BiomX plans to convert $32.4 million of preferred stock to common stock, pending shareholder approval in July 2024.