Delaware
(State or other jurisdiction of incorporation or organization) |
3841
(Primary Standard Industrial Classification Code Number) |
47-3812456
(I.R.S. Employer Identification No.) |
Copy to
|
Large accelerated filer ☐
|
Accelerated filer
☐
|
Non-accelerated filer ☐
(Do not check if a smaller reporting company) |
Smaller reporting company
☒
Emerging growth company
☒
|
Title of Each Class of Securities
to be Registered |
Amount to Be
Registered(1)
|
Proposed Maximum
Offering Price per Share |
Proposed Maximum
Aggregate Offering Price |
Amount of
Registration Fee (2) |
||||||||||||
|
||||||||||||||||
Title of Each Class of Securities
to be Registered |
Amount to Be
Registered (1)
|
Proposed Maximum Offering Price per Share
|
Proposed Maximum Aggregate Offering Price
|
Amount of
Registration Fee (2)
|
||||||||||||
Common stock, $0.0001 par value per share
|
2,299,802
|
4.25
(2
|
)
|
$
|
9,820,154.54
|
$
|
1,216.88
|
|
||||||||
Common stock, $0.0001 par value per share issuable upon exercise of warrants to purchase shares of Common Stock |
2,299,802
|
4.25 |
$
|
9,774,158.50
|
$ | 1,216.88 | ||||||||||
Total |
4,599,604
|
$
|
19,548,317
|
$
|
2439.49
|
(1) |
Pursuant to Rule 416 of the Securities Act of 1933, as amended, this Registration Statement also registers such additional shares of Common Stock as may become issuable to prevent dilution as a result of stock splits, stock dividends or similar transactions.
|
(2) |
Estimated solely for the purpose of calculating the amount of the registration fee in accordance with Rule 457(c) under the Securities Act.
|
5
|
|
13
|
|
17
|
|
54
|
|
59
|
|
60
|
|
62
|
|
63
|
|
74
|
|
99
|
|
106 | |
106
|
|
116 | |
116
|
|
116
|
|
116
|
Product
|
Indication
|
Development Status
|
Further Information
|
AIT-PH
(Pulmonary Hypertension)
|
In-Hospital Use
|
Commercial system in development
|
Regulatory filings expected ~year end 2018
|
AIT-BRO
(Bronchiolitis)
|
Bronchiolitis in Infants
(elderly to follow)
|
94 patient study ongoing
|
Data expected in 2Q18
|
AIT-NTM
(Nontuberculous
Mycobacteria)
|
Mycobacterium Abscessus Complex
(MABSC)
|
9 patient pilot study dosing complete
|
Meet with FDA by mid-year to discuss potential pivotal trial design
|
· |
optimized to deliver 160 ppm and higher of NO, whereas existing formulations of NO currently on the market consist of a maximum deliverable NO concentration of 80 ppm;
|
· |
equipped with a monitoring system that continuously monitors system parameters (e.g., NO, NO
2
and FiO
2
concentrations) as well as patient parameters (e.g. vital signs, MetHemoglobin and OxyHemoglobin percentages);
|
· |
capable of providing constant flow of our NO formulation, which we believe allows it to adequately cover the surface area of the lung to eliminate bacteria, viruses, fungi and other microbes;
|
· |
programmable and able to deliver different dosage regimens for a wide range of lung infections;
|
· |
able to generate NO from ambient air, eliminating the need for the use of high-pressure cylinders;
|
· |
designed to be used by the patient, thus convenient and portable; and
|
· |
administered non-invasively through a facial mask, which has the potential to address large, underserved chronic-care markets, such as CF.
|
· |
The antimicrobial and multiple other properties of the NO molecule delivered to the lungs suggest the potential for application in a wide range of respiratory diseases. In contrast to the often arduous and slow drug discovery process for small molecules, proteins, peptides, etc., the use of NO in medicine is well-known, and therefore the identification of conditions where NO provides benefits has been, and we expect will continue to be, much simpler, quicker and less costly.
|
· |
The FDA approved the use of an NO formulation as an inhaled drug for the treatment of pulmonary hypertension in newborns in 1999. More than 18 years of clinical experience in the delivery, monitoring and understanding of NO in the clinical environment for vascular uses has been documented.
|
· |
NO is naturally produced by the immune system and acts as a first line of defense against infectious diseases. We believe therapeutic use of NO for viral and bacterial co-infections would potentially improve the success of antimicrobial and anti-viral treatments by mimicking the body’s natural defense mechanism and thereby directly reduce viral infectivity, as well as antibiotic drug resistant bacteria.
|
· |
NO is used naturally by the body for vasodilation and we believe that the benefits to patients with various medical conditions will be seen via vasodilation when delivered with our system
|
· |
We licensed Phase 1 study results in healthy volunteers from University of British Columbia Hospital, or UBC. Results showed safe delivery of 160 ppm NO to the lung.
|
· |
Bronchiolitis
. We completed a double blind, randomized, placebo controlled pilot study conducted in Israel in infants with bronchiolitis. We commenced an Israeli-based clinical trial in the first quarter of 2017 that will complete in the second quarter of 2018 which will serve as another pilot study. We intend to submit an
Investigational Device Exemption (“IDE”)
to the FDA in 2018 and expect to commence a
pivotal clinical trial in 2018
or 2019 in the United States.
|
· |
NTM
. Three patients with CF who suffer from NTM infections (specifically,
M. Abscessus
) have been treated under compassionate use, comprising two patients at the Rambam healthcare campus in Israel and one patient in the United States, treated with our AIT generator based NO Delivery System, at the National Heart, Lung and Blood Institute (NHLBI). A pilot study of nine CF patients infected with NTM
Abscessus
in Israel were treated with our AIT NO Delivery System using cylinder gas was completed in the fourth quarter of 2017. In addition, we intend to speak with the FDA in 2018 to get agreement on a pivotal trial design. We expect that the pivotal study will use our generator based NO delivery system and treat patients infected with NTM and other severe, refractory lung infections with and without CF. Endpoints are expected to include 6-minute walk, bacterial load, forced expiratory volume in one second (FEV1), quality of life and safety. The study is anticipated to commence in 2019.
|
· |
CF-Related Lung Infections
. We completed a pilot open label, multi-center study in Israel of CF patients who are over 10 years old. Results showed a reduction in bacterial load in multiple infections.
|
· |
December 31, 2021;
|
· |
the last day of the fiscal year during which we have total annual gross revenues of $1 billion or more;
|
· |
the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and
|
· |
the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act, (we would qualify as a large accelerated filer as of the first day of the first fiscal year after we (i) have more than $700 million in aggregate market value of outstanding common equity held by our non-affiliates as of the last day of our second fiscal quarter of our prior fiscal year and (ii) have been public for at least 12 months).
|
Issuer
|
AIT Therapeutics, Inc.
|
Common stock offered by selling shareholders
|
4,599,604
shares, consisting of 2,299,802 shares and 2,299,802 shares issuable upon exercise of the Tranche B Warrants.
|
Common Stock outstanding
|
8,397,056 as of the date of prospectus excluding
* 6,113,642 shares issuable upon the exercise of all outstanding warrants and Tranche B Warrants
·
799,486 shares issuable upon the exercise of stock options.
|
Terms of the Offering
|
The selling stockholders will determine when and how they sell the Common Stock offered in this Prospectus, as described in “
Plan of Distribution
”.
|
Use of proceeds
|
The selling stockholders will receive the proceeds from the sale of shares of Common Stock offered hereby. We will not receive any proceeds from the sale of the shares of Common Stock but will pay the expenses (other than any underwriting discounts and broker’s commissions and similar expense) of this offering.
|
Risk factors
|
See "Risk Factors" and other information included in this prospectus for a discussion of risks you should carefully consider before deciding to invest in our Common Stock.
|
Trading market
|
Our Common Stock is currently subject to only limited quotation on OTC Pink under the symbol “AITB”, and it is not otherwise regularly quoted on any other over-the-counter market. Until such time as our Common Stock is so quoted, the shares of Common Stock covered by this prospectus will be sold by the selling stockholders from time to time at a fixed price of $4.25 per share, representing the exercise price of the warrants sold in connection with our most recent private placement, effected on February 16, 2018. If and when our Common Stock is regularly quoted on an over-the-counter market or on a national securities exchange, the selling stockholders may sell their respective shares of Common Stock from time to time at prevailing market prices or in privately negotiated transactions. For additional information on the possible methods of sale that may be used by the selling stockholders, please see “
Plan of Distribution
”, beginning on page 110.
|
As of December 31,
|
||||||||
2017
|
2016
|
|||||||
ASSETS :
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
1,201
|
$
|
7
|
||||
Restricted cash
|
6
|
-
|
||||||
Marketable securities
|
606
|
-
|
||||||
Other accounts receivable and prepaid expenses
|
109
|
78
|
||||||
Total
current assets
|
1,922
|
85
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Deferred private placement costs
|
-
|
90
|
||||||
Property and equipment, net
|
267
|
61
|
||||||
Total
non-current assets
|
267
|
151
|
||||||
TOTAL ASSETS
|
$
|
2,189
|
$
|
236
|
For the Year ended December 31,
|
||||||||
2017
|
2016
|
|||||||
Operating expenses:
|
||||||||
Research and development expenses
|
$
|
4,438
|
$
|
673
|
||||
General and administrative expenses
|
6,629
|
1,039
|
||||||
Costs related to aborted IPO
|
-
|
621
|
||||||
Operating loss
|
11,067
|
2,333
|
||||||
Financial expense, net
|
6,977
|
1,360
|
||||||
Loss before taxes on income
|
18,044
|
3,693
|
||||||
Taxes on income
|
-
|
27
|
||||||
Net loss
|
$
|
18,044
|
$
|
3,720
|
||||
Net unrealized gain on available-for-sale investments
|
(2
|
)
|
-
|
|||||
Total comprehensive loss
|
$
|
18,042
|
$
|
3,720
|
||||
Net basic and diluted loss per share
|
(3.01
|
)
|
(2.69
|
)
|
||||
Weighted average number of Common Stock used in computing basic and diluted net loss per share
|
6,002,052
|
1,448,363
|
For the year ended December 31,
|
||||||||
2017
|
2016
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(18,044
|
)
|
$
|
(3,720
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
38
|
25
|
||||||
Capital loss in respect to property and equipment
|
-
|
5
|
||||||
Stock-based compensation warrants, RSs and RSUs
|
4,385
|
365
|
||||||
Issuance of Common Stock to finder upon the conversion of
Convertible Notes
|
18
|
-
|
||||||
Amortization of beneficial conversion feature and debt issuance costs related to Convertible Notes
|
1,046
|
1,050
|
||||||
Issuance cost related to liability warrants
|
457
|
-
|
||||||
Adjustment of liability warrants
|
2,434
|
-
|
||||||
Revaluation of warrants to purchase Common Stock
|
2,978
|
-
|
||||||
Imputed interest on Convertible Notes, loans from related parties and others
|
33
|
299
|
||||||
Waiver of salary by the Company's officer
|
-
|
304
|
||||||
Change in:
|
||||||||
Other accounts receivables and prepaid expenses
|
(31
|
)
|
(67
|
)
|
||||
Trade payables
|
141
|
404
|
||||||
Other accounts payable
|
(574
|
)
|
291
|
|||||
Deferred IPO costs that was aborted
|
-
|
352
|
||||||
Net cash used in operating activities
|
(7,119
|
)
|
(692
|
)
|
||||
Cash flows from investing activities
|
||||||||
Increase in restricted cash
|
(6
|
)
|
-
|
|||||
Investment in marketable securities
|
(2,000
|
)
|
-
|
|||||
Proceeds from redemption of marketable securities
|
1,396
|
-
|
||||||
Selling of property and equipment
|
-
|
12
|
||||||
Purchase of property and equipment
|
(244
|
)
|
2
|
|||||
Purchase price that has been paid upon the reverse merger
|
(295
|
)
|
-
|
|||||
Net cash (used in) provided by investing activities
|
(1,149
|
)
|
14
|
|||||
Cash flows from financing activities
|
||||||||
Proceeds from issuance of units consisting of Common Stock and warrants, net of issuance costs
|
9,889
|
-
|
||||||
Proceeds from loan from related parties and others
|
57
|
340
|
||||||
Maturity of loan and interest from related parties and others
|
(418
|
)
|
-
|
|||||
Proceeds from bank loan
|
-
|
467
|
||||||
Repayment of bank loan
|
(42
|
)
|
(431
|
)
|
||||
Treasury shares
|
(25
|
)
|
-
|
|||||
Proceeds from issuance of Convertible Note
|
-
|
184
|
||||||
Deferred private placement costs that were paid
|
-
|
(4
|
)
|
|||||
Exercise of options
|
1
|
-
|
||||||
Net cash provided by financing activities
|
9,462
|
556
|
||||||
Increase (decrease) in cash and cash equivalents
|
1,194
|
(122
|
)
|
|||||
Cash and cash equivalents at the beginning of the year
|
7
|
129
|
||||||
Cash and cash equivalents at the end of the year
|
$
|
1,201
|
$
|
7
|
||||
Supplemental disclosure of non‑cash financing activities:
|
||||||||
Conversion of Convertible Notes into Common Stock
|
$
|
3,955
|
$
|
-
|
||||
Capitalization of deferred private placement costs
|
$
|
-
|
$
|
86
|
· |
we are a development-stage medical device and biopharmaceutical company and have a limited operating history on which to assess our business, have incurred significant losses since our inception, including a net loss of $18 million for year ended December 31, 2017, and an accumulated deficit of approximately $31.6 million as of December 31, 2017, and anticipate that we will continue to incur significant losses for the foreseeable future;
|
· |
we are unable to predict the extent of future losses or when we will become profitable based on the sale of any product, if at all. Even if we succeed in developing and commercializing our product candidates, we may never generate revenue to sustain profitability;
|
· |
we have no source of revenue, and we expect that we will need to raise additional funding before we can expect to become profitable from sales of our products;
|
· |
we are heavily dependent upon the success of our product candidates, which are in various stages of clinical development, and we cannot provide any assurance that the FDA or other regulatory agencies will allow us to conduct further clinical trials;
|
· |
we are in the process of developing our proprietary NO delivery system, and unexpected delays will adversely impact the timing of our U.S.-based clinical trials and approvals;
|
· |
we might be unable to develop product candidates that will achieve commercial success in a timely and cost-effective manner, or ever;
|
· |
our competitors may develop or commercialize products faster or more successfully than us;
|
· |
because some of the target patient populations of our product candidates are small, we must be able to successfully identify patients and achieve a significant market share to maintain profitability and growth;
|
· |
our reliance on third parties to help conduct our pre-clinical studies, clinical trials and commercial scale manufacturing;
|
· |
we do not have any products approved for sale by the FDA or any other regulatory agencies, and we cannot provide any assurance that any of our product candidates will receive regulatory approval;
|
· |
if we are unable to obtain and maintain effective intellectual property rights for our technologies, product candidates or any future product candidates, we may not be able to compete effectively in our markets; and
|
· |
our future success depends in part upon our ability to retain our executive and scientific teams, and to attract, retain and motivate other qualified personnel.
|
· |
clinical trials for our product candidates;
|
· |
researching and developing new products;
|
· |
pursuing growth opportunities, including more rapid expansion;
|
· |
acquiring complementary businesses or technologies;
|
· |
making capital improvements to improve our infrastructure;
|
· |
hiring qualified management and key employees;
|
· |
responding to competitive pressures;
|
· |
complying with regulatory requirements; and
|
· |
maintaining compliance with applicable laws.
|
· |
completion of or reference to extensive preclinical laboratory tests and preclinical animal studies, all performed in accordance with the FDA’s Good Laboratory Practice (“GLP”);
|
· |
submission to the FDA of a pre-IDE application, which the FDA authorizes before we may begin conducting human clinical trials, provided that the FDA does not object; the IDE must be updated annually;
|
· |
performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the medical device candidate for each proposed indication; and
|
· |
submission to the FDA of a 510(k) or PMA, after completion of all pivotal clinical trials.
|
· |
the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical studies;
|
· |
we may be unable to demonstrate to the FDA or comparable foreign regulatory authorities that a product candidate’s risk-benefit ratio for its proposed indication is acceptable;
|
· |
the FDA may determine that the population studied in the clinical program was not sufficiently broad or representative to assure safety in the full population for which we seek approval;
|
· |
the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical studies;
|
· |
the data collected from clinical studies of our product candidates may not be sufficient to support the submission of a PMA in the United States or elsewhere;
|
· |
the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;
|
· |
the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval; and
|
· |
inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical studies;
|
· |
delays in reaching a consensus with regulatory agencies on study design;
|
· |
delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites;
|
· |
delays in obtaining required IRB approval at each clinical study site;
|
· |
imposition of a clinical hold by regulatory agencies, after review of an IDE application, or equivalent application, or an inspection of our clinical study operations or study sites;
|
· |
delays in recruiting suitable patients to participate in our clinical studies;
|
· |
difficulty collaborating with patient groups and investigators;
|
· |
failure by our CROs, other third parties or us to adhere to clinical study requirements;
|
· |
failure to perform in accordance with the FDA’s GPC requirements, or applicable regulatory guidelines in other countries;
|
· |
delays in having patients complete participation in a study or return for post-treatment follow-up;
|
· |
patients dropping out of a study;
|
· |
occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits;
|
· |
changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;
|
· |
the cost of clinical studies of our product candidates being greater than we anticipate;
|
· |
clinical studies of our product candidates producing negative or inconclusive results, which may result in us deciding, or regulators requiring us, to conduct additional clinical studies or abandon product development programs; and
|
· |
delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our product candidates for use in clinical studies or the inability to do any of the foregoing.
|
· |
regulatory authorities may withdraw approvals of such product;
|
· |
regulatory authorities may require additional warnings on the label;
|
· |
as a condition of approval, we may be required to create a Risk Evaluation and Mitigation Strategy (“REMS”) plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use;
|
· |
we could be sued and held liable for harm caused to patients; and
|
· |
our reputation may suffer.
|
· |
conduct an investigation into our practices and any alleged violation of law;
|
· |
issue warning letters or untitled letters asserting that we are in violation of the law;
|
· |
seek an injunction or impose civil or criminal penalties or monetary fines;
|
· |
suspend or withdraw regulatory approval;
|
· |
require that we suspend or terminate any ongoing clinical trials;
|
· |
refuse to approve pending applications or supplements to applications filed by us;
|
· |
suspend or impose restrictions on operations, including costly new manufacturing requirements;
|
· |
seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall; or
|
· |
exclude us from providing our products to those participating in government health care programs, such as Medicare and Medicaid, and refuse to allow us to enter into supply contracts, including government contracts.
|
· |
the safety and efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments;
|
· |
the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling;
|
· |
the clinical indications for which approval is granted;
|
· |
relative convenience and ease of administration;
|
· |
the cost of treatment, particularly in relation to competing treatments;
|
· |
the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;
|
· |
the strength of marketing and distribution support and timing of market introduction of competitive products;
|
· |
publicity concerning our products or competing products and treatments; and
|
· |
sufficient third-party insurance coverage and reimbursement.
|
· |
the federal health care program Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering, or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order, or recommendation of, any good or service for which payment may be made under government health care programs such as the Medicare and Medicaid programs;
|
· |
federal false claims laws that prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other government health care programs that are false or fraudulent;
|
· |
federal criminal laws that prohibit executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; and
|
· |
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers.
|
· |
the scope of rights granted under the license agreement and other interpretation-related issues;
|
· |
the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;
|
· |
the sublicensing of patent and other rights;
|
· |
our diligence obligations under the license agreement and what activities satisfy those diligence obligations;
|
· |
the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and
|
· |
the priority of invention of patented technology.
|
· |
our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates;
|
· |
we may not be able or willing to assemble sufficient resources to acquire or discover additional product candidates;
|
· |
our product candidates may not succeed in preclinical or clinical testing;
|
· |
our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval;
|
· |
competitors may develop alternatives that render our product candidates obsolete or less attractive;
|
· |
product candidates we develop may be covered by third parties’ patents or other exclusive rights;
|
· |
the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop;
|
· |
a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and
|
· |
a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors.
|
· |
the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;
|
· |
federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other third-party payors that are false or fraudulent;
|
· |
the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
|
· |
HIPAA, as amended by the Health Information Technology and Clinical Health Act (“HITECH”), and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information;
|
· |
the federal physician sunshine requirements under the Health Care Reform Laws requires manufacturers of drugs, devices and medical supplies to report annually to the U.S. Department of Health and Human Services information related to payments and other transfers of value to physicians, other healthcare providers and teaching hospitals and ownership and investment interests held by physicians and other healthcare providers and their immediate family members and applicable group purchasing organizations; and
|
· |
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers, state 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 and other potential referral sources; state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
|
· |
multiple, conflicting and changing laws and regulations such as privacy regulations, tax laws, export and import restrictions, employment laws, regulatory requirements and other governmental approvals, permits and licenses;
|
· |
failure by us to obtain regulatory approvals for the use of our products in various countries;
|
· |
additional potentially relevant third-party patent rights;
|
· |
complexities and difficulties in obtaining protection and enforcing our intellectual property;
|
· |
difficulties in staffing and managing foreign operations;
|
· |
complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;
|
· |
limits on our ability to penetrate international markets;
|
· |
financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;
|
· |
natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions;
|
· |
certain expenses including, among others, expenses for travel, translation and insurance; and
|
· |
regulatory and compliance risks that relate to maintaining accurate information and control over sales and activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act (“FCPA”), its books and records provisions or its anti-bribery provisions.
|
· |
the product candidates we seek to pursue, and our ability to obtain rights to develop, commercialize and market those product candidates;
|
· |
our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial;
|
· |
actual or anticipated adverse results or delays in our clinical trials;
|
· |
our failure to commercialize our product candidates, if approved;
|
· |
unanticipated serious safety concerns related to the use of any of our product candidates;
|
· |
adverse regulatory decisions;
|
· |
additions or departures of key scientific or management personnel;
|
· |
changes in laws or regulations applicable to our product candidates, including without limitation clinical trial requirements for approvals;
|
· |
disputes or other developments relating to patents and other proprietary rights and our ability to obtain patent protection for our product candidates;
|
· |
our dependence on third parties, including CROs as well as our potential partners that provide us with companion diagnostic products; failure to meet or exceed any financial guidance or expectations regarding development milestones that we may provide to the public;
|
· |
actual or anticipated variations in quarterly operating results;
|
· |
failure to meet or exceed the estimates and projections of the investment community;
|
· |
overall performance of the equity markets and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies;
|
· |
conditions or trends in the biotechnology and biopharmaceutical industries;
|
· |
introduction of new products offered by us or our competitors;
|
· |
announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
|
· |
our ability to maintain an adequate rate of growth and manage such growth;
|
· |
issuances of debt or equity securities;
|
· |
sales of our Common Stock by us or our stockholders in the future, or the perception that such sales could occur;
|
· |
trading volume of our Common Stock; ineffectiveness of our internal control over financial reporting or disclosure controls and procedures;
|
· |
general political and economic conditions;
|
· |
effects of natural or man- made catastrophic events; and
|
· |
other events or factors, many of which are beyond our control.
|
· |
exemption from the auditor attestation requirements under Section 404 of the Sarbanes-Oxley Act of 2002;
|
· |
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements;
|
· |
exemption from the requirements of holding non-binding stockholder votes on executive compensation arrangements; and
|
· |
exemption from any rules requiring mandatory audit firm rotation and auditor discussion and analysis and, unless the SEC otherwise determines, any future audit rules that may be adopted by the Public Company Accounting Oversight Board.
|
· |
providing that directors may be removed by stockholders with or without cause;
|
· |
limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;
|
· |
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board of Directors;
|
· |
authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Common Stock; and
|
· |
limiting the liability of, and providing indemnification to, our directors and officers.
|
· |
We have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future. We are a clinical-stage company with no approved products, and have generated no revenue to date and may never generate revenue or achieve profitability.
|
· |
It is highly likely that we will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute current stockholders’ ownership interests.
|
· |
We are heavily dependent on the success of our product candidates, which are in the early stages of clinical development. We cannot give any assurance that any of our product candidates will receive regulatory approval, which is necessary before they can be commercialized.
|
· |
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
|
· |
Medical device development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies may not be predictive of future study results.
|
· |
We are working on NTM
Abscessus
, which is very rare.
|
· |
We are working on bronchiolitis in infants that usually is caused by the RSV virus. RSV is a seasonal virus and the length of the disease and the severity of the disease might change every year.
|
· |
We are heavily dependent on the Aeronox system to conduct our trial outside the United States.
|
· |
Our delivery system is classified as a Class III medical device by the FDA and requires 510(k) or PMA approval by the FDA, which can be a rigorous, time-consuming and expensive process.
|
· |
We may find it difficult to enroll patients in our clinical studies. Difficulty in enrolling patients could delay or prevent clinical studies of our product candidates.
|
· |
We may encounter substantial delays in our clinical studies, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities.
|
· |
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if any.
|
· |
Even if we obtain regulatory approval for our product candidates, we will still face extensive, ongoing regulatory requirements and review, and our products may face future development and regulatory difficulties.
|
· |
We will be seeking Fast Track review by the FDA, but the agency may refuse to accord us accelerated review.
|
· |
We rely on third parties to conduct our preclinical and clinical studies and perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed.
|
· |
We will rely on third parties to manufacture our NO formulation and delivery system. Our business could be harmed if those third parties fail to provide us with sufficient quantities of our needed supplies, or fail to do so at acceptable quality levels or prices.
|
· |
We and our collaborators and contract manufacturers are subject to significant regulation with respect to manufacturing our product candidates. The manufacturing facilities on which we rely may not continue to meet regulatory requirements and have limited capacity.
|
· |
Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
|
· |
If the market opportunities for our product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer.
|
· |
We intend to rely on third-party manufacturers to produce our product candidates, but we have not entered into binding agreements with any such manufacturers to support commercialization.
|
· |
We face intense competition and rapid technological change and the possibility that our competitors may discover, develop or commercialize therapies that are similar, more advanced or more effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product candidates.
|
· |
We currently have no marketing and sales organization. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenue.
|
· |
The commercial success of any current or future product candidate will depend upon the degree of market acceptance by physicians, patients, third-party payors and others in the medical community.
|
· |
The insurance coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.
|
· |
Healthcare legislative reform measures may have a material adverse effect on our business and results of operations.
|
· |
Future legislation or regulations may adversely affect reimbursement from government programs.
|
· |
We are subject to additional federal and state laws and regulations relating to our business, and our failure to comply with those laws could have a material adverse effect on our results of operations and financial conditions.
|
· |
If we are unable to obtain and maintain effective patent rights for our product candidates or any future product candidates, we may not be able to compete effectively in our markets.
|
· |
We have a non-exclusive license to certain patents owned by CareFusion that relate to methods and devices for delivering 80-400 PPM NO formulations to patients. CareFusion may grant additional non-exclusive licenses to third parties.
|
· |
Intellectual property rights of third parties could adversely affect our ability to commercialize our product candidates, and we might be required to litigate or obtain licenses from third parties in order to develop or market our product candidate. Such litigation or licenses could be costly or not available on commercially reasonable terms.
|
· |
Patent terms are limited and we may not be able to effectively protect our products and business.
|
· |
Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.
|
· |
If we are unable to maintain effective proprietary rights for our product candidates or any future product candidates, we may not be able to compete effectively in our markets.
|
· |
Third-party claims of intellectual property infringement may prevent or delay our development and commercialization efforts.
|
· |
We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses.
|
· |
If we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.
|
· |
We may be involved in lawsuits or post-grant proceedings to protect or enforce our patents or the patents of our licensor, which could be expensive, time consuming and unsuccessful.
|
· |
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.
|
· |
We may be subject to claims challenging the inventorship of our patents and other intellectual property.
|
· |
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
|
· |
We may not be able to protect our intellectual property rights throughout the world.
|
· |
Under applicable employment laws, we may not be able to enforce covenants not to compete and therefore may be unable to prevent our competitors from benefiting from the expertise of some of our former employees.
|
· |
We manage our business through a small number of employees and key consultants. We depend on them even more than similarly-situated companies.
|
· |
We will need to expand our organization and we may experience difficulties in recruiting needed additional employees and consultants, which could disrupt our operations.
|
· |
We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
|
· |
We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.
|
· |
International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States or Israel.
|
· |
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
|
· |
The use of any of our product candidates could result in product liability or similar claims that could be expensive, damage our reputation and harm our business.
|
· |
Our business and operations would suffer in the event of system failures.
|
· |
We may incur substantial costs and receive adverse outcomes in litigation matters.
|
· |
There is not now, and there may never be, an active, liquid and orderly trading market for our Common Stock, which may make it difficult for you to sell your shares of our Common Stock.
|
· |
Our share price is volatile and may be influenced by numerous factors, some of which may be beyond our control.
|
· |
Our Common Stock may be a “penny stock.”
|
· |
FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.
|
· |
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
|
· |
We may be exposed to additional risks as a result of “going public” by means of a reverse merger transaction.
|
· |
We will incur increased costs associated with, and our management will need to devote substantial time and effort to, compliance with public company reporting and other requirements.
|
· |
We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Common Stock less attractive to investors.
|
· |
We have elected under the JOBS Act to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies.
|
· |
Shares of our Common Stock that have not been registered under federal securities laws are subject to resale restrictions imposed by Rule 144, including those set forth in Rule 144(i) which apply to a former “shell company.”
|
· |
If we issue additional shares of our capital stock in the future, our existing stockholders will be diluted.
|
· |
Future sales and issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity incentive plans or otherwise, could result in dilution of the percentage ownership of our stockholders and could cause our stock price to fall.
|
· |
Anti-takeover provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware law, might discourage, delay or prevent a change in control of our company or changes in our Board of Directors or management and, therefore, depress the trading price of our Common Stock.
|
· |
The elimination of personal liability against our directors and officers under Delaware law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.
|
· |
We do not intend to pay cash dividends on our capital stock in the foreseeable future.
|
|
Equity Compensation Plan Information
|
|||||||||||
Plan category
|
Number of securities to be
issued upon exercise of outstanding stock options |
Weighted-average
exercise price of outstanding stock options |
Number of securities remaining
available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|||||||||
|
(a)
|
(b)
|
(c)
|
|||||||||
Equity compensation plans approved by security holders
|
||||||||||||
2013 Equity Incentive Plan
|
548,271
|
$
|
5.23
|
251,215
|
||||||||
Total
|
548,271
|
$ |
5.23
|
|
251,215
|
|
December 31, 2017
(thousands) |
|||
Cash, cash equivalents and marketable securities
|
$
|
1,807
|
||
Total debt
|
$
|
10,568
|
||
Stockholders’ Deficit:
|
||||
Common Stock
|
$
|
1
|
||
Accumulated other comprehensive income
|
$
|
2
|
||
Treasury shares
|
$
|
(25
|
)
|
|
Additional Paid-In Capital
|
$
|
23,260
|
||
Deficit Accumulated during the Development Stage
|
$
|
(31,617
|
)
|
|
Total Stockholders’ (Deficit) equity
|
$
|
(8,379
|
)
|
|
Total Capitalization
|
$
|
2,189
|
|
|
For the Year ended
December 31
|
|||||||
|
2017
|
2016
|
||||||
(in thousands)
|
||||||||
Research and development expenses
|
$
|
4,438
|
$
|
673
|
||||
General and administrative expenses
|
6,629
|
1,039
|
||||||
Costs related to aborted IPO
|
-
|
621
|
||||||
Operating loss
|
11,067
|
2,333
|
||||||
Financial expense, net
|
1,565
|
1,360
|
||||||
Revaluation of warrants to purchase Common Stock
|
5,412
|
–
|
||||||
Loss before taxes on Income
|
18,044
|
3,693
|
||||||
Taxes on income
|
-
|
27
|
||||||
Net loss
|
$
|
18,044
|
$
|
3,720
|
For the Year ended
December 31
|
||||||||
2017
|
2016
|
|||||||
(in thousands)
|
||||||||
Costs to third-party related to conducting
clinical and preclinical trials, manufacturing and other R&D subcontractors
|
$
|
2,694
|
$
|
157
|
||||
Purchase of certain intellectual property assets
|
500
|
-
|
||||||
Salaries and related personnel
|
378
|
198
|
||||||
Stock-based compensation and warrants
|
618
|
109
|
||||||
Other
|
248
|
209
|
||||||
Total
|
$
|
4,438
|
$
|
673
|
|
For the Year ended
December 31
|
|||||||
|
2016
|
2015
|
||||||
(in thousands)
|
||||||||
Research and development expenses
|
$
|
673
|
$
|
1,620
|
||||
General and administrative expenses
|
1,039
|
589
|
||||||
Costs related to aborted IPO
|
621
|
–
|
||||||
Operating loss
|
2,333
|
2,209
|
||||||
Financial expense, net
|
1,360
|
994
|
||||||
Revaluation of warrants to purchase Series A Preferred Shares
|
–
|
152
|
||||||
Loss before taxes on Income
|
3,693
|
3,355
|
||||||
Taxes on income
|
27
|
127
|
||||||
Net comprehensive loss
|
$
|
3,720
|
$
|
3,482
|
Year ended
|
||||||||
|
December 31,
2016
|
December 31,
2015
|
||||||
(in thousands)
|
||||||||
Cost to third-party clinical consultants and expenses related to conducting clinical and preclinical trials
|
$
|
157
|
$
|
623
|
||||
Salaries and related personnel
|
198
|
266
|
||||||
Share-based compensation
|
109
|
331
|
||||||
Patents
|
130
|
64
|
||||||
Other
|
79
|
336
|
||||||
Total
|
$
|
673
|
$
|
1,620
|
· |
the progress and costs of our preclinical studies, clinical trials and other research and development activities;
|
· |
the scope, prioritization and number of our clinical trials and other research and development programs;
|
· |
the costs and timing of obtaining regulatory approval for our product candidate;
|
· |
the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;
|
· |
the costs of, and timing for, strengthening our manufacturing agreements for production of sufficient clinical quantities of our product candidate;
|
· |
the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally;
|
· |
the costs of acquiring or undertaking the development and commercialization efforts for additional, future therapeutic applications of our product candidate;
|
· |
the magnitude of our general and administrative expenses; and
|
· |
any cost that we may incur under current and future in-and out-licensing arrangements relating to our product candidate.
|
For the Year ended
December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Net cash provided by (used in):
|
||||||||||||
Operating activities
|
$
|
(7,119
|
)
|
$
|
(692
|
)
|
$
|
(1,658
|
) | |||
Investing activities
|
(1,149
|
)
|
14
|
(7
|
) | |||||||
Financing activities
|
9,462
|
556
|
1,633
|
|||||||||
Net decrease in cash and cash equivalents
|
1,194
|
(122
|
)
|
(32
|
) |
· |
the progress and costs of our preclinical studies, clinical trials and other research and development activities;
|
· |
the scope, prioritization and number of our clinical trials and other research and development programs;
|
· |
the costs and timing of obtaining regulatory approval for our product candidates;
|
· |
the costs of filing, prosecuting, enforcing and defending patent claims and other intellectual property rights;
|
· |
the costs of, and timing for, strengthening our manufacturing agreements for production of sufficient clinical quantities of our product candidates;
|
· |
the potential costs of contracting with third parties to provide marketing and distribution services for us or for building such capacities internally;
|
· |
the costs of acquiring or undertaking the development and commercialization efforts for additional, future therapeutic applications of our product candidates;
|
· |
the magnitude of our general and administrative expenses; and
|
· |
any cost that we may incur under current and future in-and out-licensing arrangements relating to our product candidates.
|
Date
|
Study
|
Indication
|
Primary
|
Results
|
2011
|
Phase 1 Safety (n=10)
|
All comers
|
Safety
|
•
No SAEs
|
2013 – 2014
|
Phase 2
double blind randomized
(n=43)
|
Bronchiolitis
(all causes)
|
Safety & Efficacy
|
•
No SAEs
•
Length of hospital stay reduced by 24 hours in hospitalized infants
|
2013 - 2014
|
Phase 2 open label
(n=9)
|
Cystic Fibrosis (CF)
|
Safety & Efficacy
|
•
No SAEs
•
Lowered bacterial load
|
2016
|
Compassionate use Israel (n=2)
|
Nontuberculous Mycobacteria(NTM) in CF patients
|
Efficacy
|
•
No SAEs
•
Improvements in clinical and surrogate endpoints
|
2017
|
Compassionate use
National Institute of Health
(n=1)
|
NTM in
CF patient
|
Efficacy
|
•
No SAEs
•
Improvements in clinical endpoints
|
2017
|
Pilot open label (N=9)
|
Refractory NTM
abscessus
|
Safety
|
•
No SAEs
•
Dosing complete, data pending
|
Product
|
Indication
|
Development Status
|
Further Information
|
AIT-PH
(Pulmonary Hypertension)
|
In-Hospital Use
|
Commercial system in development
|
Regulatory filings expected ~year end 2018
|
AIT-BRO
(Bronchiolitis)
|
Bronchiolitis in Infants
(elderly to follow)
|
94 patient study ongoing
|
Data expected in 2Q18
|
AIT-NTM
(Nontuberculous
Mycobacteria)
|
Mycobacterium Abscessus Complex
(MABSC)
|
9 patient pilot study dosing complete
|
Meet with FDA by mid-year to discuss potential pivotal trial design
|
· |
optimized to deliver a high 160 ppm of NO, whereas existing formulations of NO currently on the market consist of an NO concentration of up to 80 ppm;
|
· |
equipped with a monitoring system that continuously monitors system parameters (e.g., NO, NO
2
and FiO
2
concentrations) as well as patient parameters (e.g. vital signs, MetHemoglobin and OxyHemoglobin percentages);
|
· |
capable of providing constant flow of our NO formulation, which we believe allows it to adequately cover the surface area of the lung to eliminate bacteria, viruses, fungi and other microbes;
|
· |
programmable and able to deliver different dosage regimens for a wide range of lung infections;
|
· |
able to generate NO from ambient air, eliminating the need for the use of high pressure cylinders;
|
· |
designed to be convenient and portable; and
|
· |
administered non-invasively through a facial mask, which has the potential to address large, underserved chronic-care markets, such as CF.
|
· |
The antimicrobial and signaling properties of the NO molecule delivered to the lungs suggest the potential for application in a wide range of respiratory diseases. In contrast to the often arduous and slow drug discovery process for small molecules, the use of NO in medicine is well-known, and therefore the identification of NO product candidates has been, and we expect will continue to be, much simpler, quicker and less costly.
|
· |
The FDA approved the use of an NO formulation as an inhaled drug for the treatment of pulmonary hypertension in newborns in 1999. More than 15 years of clinical experience in the delivery, monitoring and understanding of NO in the clinical environment for vascular uses has been documented.
|
· |
NO is naturally produced by the immune system and acts as a first line of defense against infectious diseases. We believe therapeutic use of NO for viral and bacterial co-infections would potentially improve the success of antimicrobial and anti-viral treatments by mimicking the body’s natural defense mechanism and thereby directly reduce viral infectivity, as well as antibiotic drug resistant bacteria.
|
· |
We licensed the Phase 1 study results from University of British Columbia Hospital, or UBC.
|
· |
Bronchiolitis
. We completed a Phase 2, double blind, randomized study conducted in Israel in infants with bronchiolitis. We have commenced an Israeli-based Phase 3 clinical trial in the first quarter of 2017, and we intend to submit an Investigational Device Exemption (“IDE”) to the FDA in 2018 and expect to commence a pivotal Phase 3 clinical trial in 2018 in the United States.
|
· |
NTM Abscessus in CF patients
. Three patients with CF who suffer from NTM infections (specifically, M. Abscessus) have been treated under compassionate use, comprising two patients at the Rambam healthcare campus in Israel and one patient in the United States, treated with our AIT NO Delivery System, at the National Heart, Lung and Blood Institute. A pilot study of nine CF patients infected with NTM
Abscessus
in Israel were treated with our AIT NO Delivery System using cylinder gas was completed in the fourth quarter of 2017. In addition, we intend to submit an IND to the FDA in 2018 to commence a U.S.-based pivotal Phase 3 clinical trial in 2019. We expect that the pivotal Phase 3 study will use our generator based NO delivery system and treat patients infected with NTM with and without CF. Endpoints are expected to include 6-minute walk, bacterial load, FEV1, quality of life and safety. .
|
· |
CF-Related Lung Infections
. We completed a Pilot open label, multi-center study in Israel of CF patients who are over 10 years old.
|
· |
Our Initial Disease Targets and Market Opportunity
5
|
· |
Bronchiolitis
|
· |
Bronchiolitis Market Data
|
· |
Limitations of Current Treatment Options for Bronchiolitis
|
· |
NTM
|
· |
NTM Market Data
|
· |
Limitations of Current Treatment Options for NTM
|
· |
Our Clinical Results to Date
|
· |
Phase
1 Clinical Results
|
· |
NTM Clinical Results
|
· |
NTM Compassionate Treatment
|
· |
CF Pilot
Clinical Trial
|
· |
Bronchiolitis Clinical Results
|
· |
Nitric Oxide for NTM abscessus (NO-NTM abscessus)
|
· |
Nitric Oxide for
Bronchiolitis (NO-BRO) Trial Design
|
· |
Commercialization
|
· |
Competition
|
· |
Manufacturing
|
· |
Intellectual Property
|
· |
devices and methods for delivering NO formulations to a patient at steady and alternating concentrations (80-400 ppm), including intermittent delivery of NO;
|
· |
a device and methods for treatment of surface infections; and
|
· |
use of NO as a mucolytic agent and for treatment and disinfection of biofilms.
|
· |
each of our directors;
|
· |
each of our named executive officers; and
|
· |
all of our directors and executive officers as a group.
|
Name and Address of
Beneficial Owner
(1)
|
Number of Shares
|
Percentage of Outstanding Shares
(2)
|
||||||
5% Owners
|
||||||||
Deerfield Special Situations Fund, L.P.
|
1,228,930
|
(3)
|
9.985
|
%
(4)
|
||||
Pulmonox Technologies Corporation
|
982,733
|
(5)
|
4.99
|
%
(6)
|
||||
Allianz Biotechnologie
|
954,779
|
(7)
|
9.985
|
%
(4)
|
||||
M. Kingdon Offshore Master Fund, L.P.
|
968,385
|
(8)
|
4.99
|
%
(6)
|
||||
Executive Officers and Directors
|
||||||||
Steven A. Lisi
|
723,511
|
(9)
|
4.99
|
%
(6)
|
||||
Amir Avniel
|
630,956
|
(10)
|
4.99
|
%
(6)
|
||||
Ron Bentsur
|
356,918
|
(11)
|
4.21
|
%
|
||||
Yossef Av-Gay
|
378,843
|
(12)
|
4.50
|
%
|
||||
David Grossman
|
40,166
|
(13)
|
*
|
|||||
Ari Raved
|
768,260
|
(14)
|
4.99
|
%
(6)
|
||||
Erick Lucera
|
2,342
|
(16)
|
*
|
|||||
Yoori Lee
|
4,684
|
(17)
|
*
|
|||||
Executive Officers and Directors as a Group (Nine persons)
|
2,920,005
|
23.68
|
%
|
|
*
|
Less than one percent (1.0%).
|
(1)
|
The address of these persons, unless otherwise noted, is c/o AIT Therapeutics, Inc., 2 Ilan Ramon, Science Park, Ness Ziona, 7403635, Israel.
|
(2)
|
Shares of Common Stock beneficially owned and, except as limited by the Ownership Cap, the respective percentages of beneficial ownership of Common Stock includes for each person or entity shares issuable on the exercise of all options and warrants and the conversion of other convertible securities beneficially owned by such person or entity that are currently exercisable or will become exercisable or convertible within 60 days following May 7, 2018. Such shares, however, are not included for the purpose of computing the percentage ownership of any other person.
|
(3)
|
Based, in part, on information provided on Schedule 13G/A filed with the SEC on February 16, 2018 by Deerfield Mgmt, L.P. Deerfield Management Company, L.P., Deerfield Special Situations Fund, L.P. and James E. Flynn. Includes 856,863 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants. James E. Flynn is the President of J.E. Flynn Capital, LLC, which is the general partner of Deerfield Mgmt, L.P., which is the general partner of Deerfield Special Situations Fund, L.P. Flynn Management LLC is the general partner of Deerfield Management Company, L.P., which is the investment advisor to Deerfield Special Situation Fund, L.P. The reporting persons’ business address is 780 Third Avenue, 37th Floor, New York, NY 10017.
|
(4)
|
The provisions of the warrants beneficially owned by the holder restrict the exercise of such warrants to the extent that, upon such exercise, the number of shares then beneficially owned by the holder and any other person or entities with which such holder would constitute a Section 13(d) “group” would exceed 9.985% (subject to an increase of such percentage to 9.99%) of the total number of our then-outstanding shares of Common Stock.
|
(5)
|
Includes 675,652 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants.
|
(6)
|
The provisions of the warrants beneficially owned by the holder restrict the exercise of such warrants to the extent that, upon such exercise, the number of shares then beneficially owned by the holder and any other person or entities with which such holder would constitute a Section 13(d) “group” would exceed 4.99% (subject to an increase of such percentage to 9.99%) of the total number of our then-outstanding shares of Common Stock.
|
(7)
|
Based, in part, on information provided on Schedule 13G filed with the SEC on March 9, 2018 by Allianz Global Investors U.S. Holdings LLC and Allianz Global Investors GmbH. Includes 560,723 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants. Allianz Global Investors U.S. Holdings LLC and Allianz Global Investors GmbH are investment advisors to Allianz Biotechnologie. The business address for Allianz Global Investors U.S. Holdings LLC is 1633 Broadway, New York, NY 10019. The business address for Allianz Global Investors GmbH is Bockenheimer Landstrasse 42-44, Frankfurt, 2M 60323 Germany.
|
(8)
|
Based, in part, on information provided on Schedule 13G filed with the SEC on February 14, 2018 by M. Kingdon Capital Management, L.L.C, M. Kingdon Offshore Master Fund L.P. and Mark Kingdon. Includes 567,526 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants. Mark Kingdon is the Managing Member of Kingdon GP, LLC, which is the general partner of M. Kingdon Offshore Master Fund L.P. The business address for the reporting persons is 152 West 57th Street, 50th Floor, New York, NY 10019.
|
(9)
|
Includes 200,446 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants.
|
(10)
|
Includes 145,676 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants, as well as options held by Mr. Avniel. Also includes 32,666 shares of Common Stock held by Dandelion Investments Ltd., over which Mr. Avniel has sole voting and dispositive power.
|
(11)
|
Includes 73,419 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants.
|
(12)
|
Includes 9,186 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants.
|
(13)
|
Includes 36,158 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants, as well as options
|
(14)
|
Includes 128,375 shares of Common Stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants.
|
(15)
|
Includes 16,667 shares of Common Stock issuable upon exercise options
|
(16)
|
Includes 1,171 shares of Common Stock issuable upon exercise of the February 2018 Warrants.
|
(17)
|
Includes 2,342 shares of Common Stock issuable upon exercise of the February 2018 Warrants.
|
Shares Owned
Prior to the Offering |
Number of Shares Offered
|
Shares Owned
After the Offering |
||||||||||||||
Name
|
Number
|
Shares
|
Number
|
Percent(1)
|
||||||||||||
ABM IDO Holdings (2)
|
58,548
|
58,548
|
-
|
-
|
||||||||||||
Adam T. Newman (3)
|
146,840
|
46,840
|
100,000
|
1.2
|
%
|
|||||||||||
Ali Ardakani (4)
|
106,611
|
9,368
|
97,243
|
1.2
|
%
|
|||||||||||
Allianz Biotechnologie (5)
|
954,779
|
454,778
|
500,001
|
6.0
|
%
|
|||||||||||
Allianz Health Sciences Fund (6)
|
247,798
|
247,798
|
-
|
-
|
||||||||||||
Alois “Luis” Praxmarer & Sandra Praxmarer (7)
|
7,024
|
7,024
|
-
|
-
|
||||||||||||
Amir Avniel (8)
|
630,956
|
4,684
|
626,272
|
7.5
|
%
|
|||||||||||
Ari and Rony Raved (9)
|
768,260
|
23,418
|
744,842
|
8.8
|
%
|
|||||||||||
Asher Tal (10)
|
15,767
|
4,682
|
11,085
|
*
|
||||||||||||
Brio Capital Master Fund Ltd (11)
|
117,096
|
117,096
|
-
|
-
|
||||||||||||
Christopher Morgan (12)
|
47,058
|
47,058
|
-
|
-
|
||||||||||||
Cynergy Brookline Healthcare Fund LLC (13)
|
58,548
|
58,548
|
-
|
-
|
||||||||||||
David Bassa (14)
|
87,812
|
87,812
|
-
|
-
|
||||||||||||
David Greenberg (15)
|
310,752
|
4,682
|
306,070
|
3.6
|
%
|
|||||||||||
David Grossman (16)
|
40,166
|
4,684
|
35,482
|
*
|
||||||||||||
Deerfield Special Situations Fund, L.P. (17)
|
1,228,930
|
47,058
|
1,181,872
|
14
|
%
|
|||||||||||
Deutsch Family Investment Partnership (18)
|
46,838
|
46,838
|
-
|
-
|
||||||||||||
Duncan Bathe (19)
|
20,000
|
20,000
|
-
|
-
|
||||||||||||
Enrique Derzavich (20)
|
391,946
|
46,840
|
345,106
|
4.1
|
%
|
|||||||||||
Erick Lucera (21)
|
2,342
|
2,342
|
-
|
-
|
||||||||||||
Frederick Montgomery (22)
|
18,600
|
18,600
|
-
|
-
|
||||||||||||
Giora Davidai (23)
|
4,684
|
4,684
|
-
|
-
|
||||||||||||
Gregory Lisi (24)
|
46,838
|
46,838
|
-
|
-
|
||||||||||||
Healthcare Opportunities Master Fund LP (25)
|
234,192
|
234,192
|
-
|
-
|
||||||||||||
Iroquois Capital Investment Group LLC (26)
|
117,092
|
117,092
|
-
|
-
|
||||||||||||
Iroquois Master Fund LTD (27)
|
46,840
|
46,840
|
-
|
-
|
||||||||||||
J Goldman Master Fund LP (28)
|
468,384
|
468,384
|
-
|
-
|
||||||||||||
James P Agah (29)
|
46,838
|
46,838
|
-
|
-
|
||||||||||||
Jan J Laskowski & Sofia M Laskowski (30)
|
11,708
|
11,708
|
-
|
-
|
||||||||||||
Jarrod Newman (31)
|
9,368
|
9,368
|
-
|
-
|
||||||||||||
JBS Healthcare Ventures LLC (32)
|
46,840
|
46,840
|
-
|
-
|
||||||||||||
Jeffrey Fox (33)
|
4,684
|
4,684
|
-
|
-
|
||||||||||||
John Doolan (34)
|
23,420
|
23,420
|
-
|
-
|
||||||||||||
John Molter (35)
|
16,392
|
16,392
|
-
|
-
|
||||||||||||
Jon E Newman (36)
|
35,128
|
35,128
|
-
|
-
|
||||||||||||
Klaus Kretshmer (37)
|
70,258
|
70,258
|
-
|
-
|
||||||||||||
Laurence Chang (38)
|
40,000
|
40,000
|
-
|
-
|
||||||||||||
M. Kingdon Offshore Master Fund L.P. (39)
|
968,385
|
468,384
|
500,001
|
5.6
|
%
|
|||||||||||
Mark Mizrahi (40)
|
11,343
|
7,010
|
4,333
|
*
|
||||||||||||
Medlant Biotech Ltd (41)
|
87,812
|
87,812
|
-
|
-
|
||||||||||||
Michael Geschwer (42)
|
46,838
|
46,838
|
-
|
-
|
||||||||||||
Mor Research Applications, Ltd. (43)
|
405,257
|
46,824
|
358,433
|
4.2
|
%
|
|||||||||||
NauVista Capital Master Fund LP (44)
|
46,840
|
46,840
|
-
|
-
|
||||||||||||
Pulmonox Technologies Corporation (45)
|
982,733
|
234,160
|
748,573
|
8.7
|
%
|
|||||||||||
Rhona Beth Shanker (46)
|
10,000
|
4,000
|
6,000
|
*
|
||||||||||||
Robert Katz (47)
|
14,052
|
14,052
|
-
|
-
|
||||||||||||
Ron Bentsur (48)
|
356,918
|
46,838
|
310,080
|
3.7
|
%
|
|||||||||||
Ronald A. Soicher (49)
|
5,000
|
5,000
|
-
|
-
|
||||||||||||
Doron, Tikotzky, Kantoe, Gutman Cederboum & Co. (50)
|
121,034
|
4,644
|
116,390
|
1.4
|
%
|
|||||||||||
Rosalind Master Fund L.P. (51)
|
240,000
|
240,000
|
-
|
-
|
||||||||||||
Schonfeld Fundamental Equity fund LLC (52)
|
140,516
|
140,516
|
-
|
-
|
||||||||||||
Steven Lisi (53)
|
723,511
|
234,224
|
489,287
|
5.7
|
%
|
|||||||||||
Tatiana Kotchoubey (54)
|
11,708
|
11,708
|
-
|
-
|
||||||||||||
Todd A. Deutsch (55)
|
23,420
|
23,420
|
-
|
-
|
||||||||||||
Whitney Capital Series Fund LLC (56)
|
327,868
|
327,868
|
-
|
-
|
||||||||||||
Yoori Lee (57)
|
4,684
|
4,684
|
-
|
-
|
||||||||||||
Satheesh Kumar and Anju Satheesh (58)
|
11,710
|
11,710
|
-
|
-
|
||||||||||||
G.N.E. BIOtechnologies Ltd. (59)
|
378,843
|
11,708
|
367,135
|
4.4
|
%
|
* |
Less than one percent.
|
(1) |
Based on 8,397,056 shares issued and outstanding as of March 27, 2018.
Under the terms of the Warrants no holder may exercise a Warrant to the extent such exercise would cause such holder, together with its affiliates and any other persons acting as a group with such holder or any of its affiliates, to have acquired a number of shares of Common Stock which would exceed 4.99%, or, in the case of certain holders, 9.985% (subject to an increase of such percentage to 9.99% on 61 days’ notice by the holder to the Company) of our then outstanding Common Stock, excluding for purposes of such determination shares of Common Stock issuable upon exercise of Warrants that have not been exercised. We refer to the foregoing limitation applicable to each holder or group as the “Ownership Cap”. As a result, in order to exercise certain of their Warrants, certain of the selling stockholders would first be required to sell a sufficient amount of Common Stock such that their exercise of such Warrants would not result in their ownership percentage of our then outstanding Common Stock exceeding the applicable Ownership Cap. See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(2) |
Includes 29,274 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(3) |
Includes 123,420 shares of common stock issuable upon exercise of the February 2018 Warrants and options.
|
(4) |
Includes 95,795 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants, as well as options held by Mr. Ardakani.
|
(5) |
Includes 560,723 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(6) |
Includes 123,899 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
|
(7) |
Includes 3,512 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(8) |
Includes 145,676 shares of Common Stock issuable upon exercise of the
January 2017 and the February 2018
Warrants, as well as options held by Mr. Avniel. Also includes 32,666 shares of Common Stock held by Dandelion Investments Ltd., over which Mr. Avniel has sole voting and dispositive power. See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(9) |
Includes 128,375 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(10) |
Includes 13,426 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(11) |
Includes 58,548 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(12) |
Includes 23,529 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(13) |
Includes 29,274 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(14) |
Includes 43,906 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(15) |
Includes 2,341 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(16) |
Includes 36,158 shares of common stock issuable upon exercise of the February 2018 Warrants, as well as options held by Mr. Grossman.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(17) |
Includes
856,863 shares of common stock issuable upon exercise of the
January 2017 and the February 2018
Warrants. See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(18) |
Includes 23,419 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(19) |
Includes 10,000 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(20) |
Includes 90,086 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
|
(21) |
Includes 1,171 shares of common stock issuable upon exercise of the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(22) |
Includes 9,300 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(23) |
Includes 2,342 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(24) |
Includes 23,419 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(25) |
Includes 117,096 shares of common stock issuable upon exercise of the February 2018Warrants.
|
(26) |
Includes 58,546 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(27) |
Includes 23,420 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(28) |
Includes 234,192 shares of common stock issuable upon exercise of the February 2018Warrants.
|
(29) |
Includes 23,419 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(30) |
Includes 5,854 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(31) |
Includes 4,684 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(32) |
Includes 23,420 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(33) |
Includes 2,342 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(34) |
Includes 11,710 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(35) |
Includes 8,196 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(36) |
Includes 17,564 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(37) |
Includes 35,129 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(38) |
Includes 20,000 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(39) |
Includes 567,526 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(40) |
Includes 7,838 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(41) |
Includes 43,906 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(42) |
Includes 23,419 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(43) |
Includes 40,078 shares of common stock issuable upon exercise of the January 2017 and February 2018 Warrants.
|
(44) |
Includes 23,420 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(45) |
Includes 675,652 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(46) |
Includes 8,000 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(47) |
Includes 7,026 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(48) |
Includes 73,419 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(49) |
Includes 2,500 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(50) |
Includes 12,322 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(51) |
Includes 120,000 shares of common stock issuable upon exercise of the February 2018Warrants.
|
(52) |
Includes 70,258 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(53) |
Includes 200,446 shares of common stock issuable upon exercise of the January 2017 and the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(54) |
Includes 5,854 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(55) |
Includes 11,710 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(56) |
Includes 163,934 shares of common stock issuable upon exercise of the February 2018Warrants.
|
(57) |
Includes 2,342 shares of common stock issuable upon exercise of the February 2018 Warrants.
See “
Security Ownership of Certain Beneficial Owners and Management
”.
|
(58) |
Includes 5,855 shares of common stock issuable upon exercise of the February 2018 Warrants.
|
(59) |
Includes 9,186 shares of common stock issuable upon exercise of the January 2017 Warrants and the February 2018 Warrants.
|
Name
|
|
Age
|
|
Position
|
Steven A. Lisi
|
|
47
|
|
Chief Executive Officer and Chairman of the Board of Directors
|
Amir Avniel
|
|
44
|
|
President, Chief Operating Officer and Director
|
Stephen J. DiPalma
|
|
59
|
|
Chief Financial Officer (interim)
|
Ron Bentsur
|
|
50
|
|
Director
|
David Grossman
|
|
42
|
|
Director
|
Erick J. Lucera
|
50
|
Director
|
||
Ari Raved
|
|
62
|
|
Director
|
Yoori Lee
|
|
45
|
|
Director
|
Name and
Principal Position
|
Year
|
Salary
Cost (1)
|
Stock-based
compensation
|
Bonus
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||||
Steven A. Lisi. (2)
|
2017
|
$
|
163
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||
Chief Executive Officer and Chairman of the Board
|
||||||||||||||||||
|
|
|||||||||||||||||
Amir Avniel
|
2017
|
$
|
286
|
$
|
89
|
$
|
50
|
$
|
425
|
|||||||||
President, Chief Operating Officer and Director
|
2016
|
$
|
220
|
-
|
-
|
$
|
220
|
|||||||||||
2015 | $ |
198
|
-
|
-
|
$ |
198
|
||||||||||||
Hai Aviv (3)
|
2017
|
$
|
160
|
$
|
39
|
$
|
-
|
$
|
199
|
|||||||||
Chief Financial Officer
|
(1)
|
Salary cost includes the Covered Executive’s gross salary plus payment of social benefits made by the Company on behalf of such Covered Executive. Such benefits may include, to the extent applicable to the Covered Executive, payments, contributions and/or allocations for savings funds (
e.g.,
Managers’ Life Insurance Policy), education funds (referred to in Hebrew as “
keren hishtalmut
”), pension, severance, risk insurances (
e.g.,
life, or work disability insurance), payments for social security and tax gross-up payments, vacation, car, medical insurances and benefits, phone, convalescence or recreation pay and other benefits and perquisites consistent with the Company’s policies.
|
(2)
|
Mr. Lisi was appointed as the Company’s CEO on June 14, 2017. The costs presented in the above table include payments which were paid to Mr. Lisi since his appointment as the Company’s CEO.
|
(3)
|
Mr. Aviv resigned as our CFO effective as of April 30, 2018, and Stephen J. DiPalma was appointed as interim CFO effective May 1, 2018.
|
|
Equity awards
|
|||||||||||||||||||||||||
Name
|
Date of
Grant
|
Number of securities underlying unexercised options (#) exercisable
|
Number of securities underlying unexercised options (#) unexcercisable
|
Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)
|
Option exercise price ($)
|
Option expiration date
|
Number of shares or units of stock that have not vested (#)
|
|||||||||||||||||||
Steven A. Lisi
|
01/13/2017
|
-
|
-
|
-
|
0.001
|
-
|
121,429
|
|||||||||||||||||||
Amir Avniel
|
02/20/2017
|
25,000
|
75,000
|
-
|
6.0
|
02/20/2027
|
-
|
|||||||||||||||||||
Hai Aviv (1)
|
05/15/2017
|
8,333
|
41,667
|
-
|
6.9
|
05/15/2027
|
-
|
(1)
|
Mr. Aviv resigned as our CFO effective as of April 30, 2018, and Stephen J. DiPalma was appointed as interim CFO effective May 1, 2018.
|
Name
|
Fees earned or
paid in cash ($)
|
Stock awards ($)
|
Option awards ($)
|
Non-equity incentive plan compensation ($)
|
Nonqualified deferred compensation earnings ($)
|
All Other Compensation ($)
|
Total ($)
|
|||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||
Steven A. Lisi
|
99
|
1,433
|
-
|
-
|
-
|
150
|
1,682
|
|||||||||||||||||||||
Ron Bentsur
|
-
|
1,960
|
-
|
-
|
-
|
-
|
1,960
|
|||||||||||||||||||||
David Grossman
|
50
|
-
|
62
|
-
|
-
|
-
|
112
|
|||||||||||||||||||||
Yossef Av-Gay
|
75
|
-
|
-
|
-
|
-
|
-
|
75
|
|||||||||||||||||||||
Erick J. Lucera
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Ari Raved
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
·
|
prior to this time, our Board of Directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;
|
|
·
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, subject to certain exceptions; or
|
|
·
|
at or subsequent to such time, the business combination is approved by our Board of Directors and authorized at an annual or special meeting of our stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
|
|
·
|
any merger or consolidation involving the Company and the interested stockholder;
|
|
·
|
any transaction with the interested stockholder involving any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets of the Company having a market value of 10% or more of either the consolidated assets of the Company or the market value of all of the Company’s outstanding stock (whether in one transaction or in a series of transactions);
|
|
·
|
any transaction that results in the issuance or transfer by the Company of any stock of the Company to the interested stockholder, subject to limited exceptions;
|
|
·
|
any transaction involving the Company that has the effect of increasing the proportionate share of the stock of any class or series of the Company beneficially owned by the interested stockholder; or
|
|
·
|
any receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the Company.
|
|
·
|
permit our Board of Directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions), redemption price or prices, and dissolution preferences);
|
|
·
|
provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by a vote of a majority of directors then in office;
|
|
·
|
do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of Common Stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose);
|
|
·
|
provide that, unless with otherwise consent to an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (A) any derivative action or proceeding brought on behalf of us; (B) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (C) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our Amended and Restated Certificate of Incorporation or our Bylaws; or (D) any action asserting a claim against us governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and to have consented to the foregoing exclusive forum.
|
· |
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
· |
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
· |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
· |
an exchange distribution in accordance with the rules of the applicable exchange;
|
· |
privately negotiated transactions;
|
· |
settlement of short sales;
|
· |
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
|
· |
through the writing or settlement of options or other hedging transactions,
|
· |
whether through an options exchange or otherwise;
|
· |
a combination of any such methods of sale; or any other method permitted pursuant to applicable law.
|
• |
U.S. expatriates and former citizens or long-term residents of the United States;
|
• |
persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
|
• |
banks, insurance companies, and other financial institutions;
|
• |
brokers, dealers or traders in securities;
|
• |
“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
|
• |
partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);
|
• |
tax-exempt organizations or governmental organizations;
|
• |
persons deemed to sell our common stock under the constructive sale provisions of the Code;
|
• |
persons who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation;
|
• |
persons subject to special tax accounting rules as a result of any item of gross income with respect to our common stock being taken into account in an “applicable financial statement” (as defined in the Code);
|
• |
tax-qualified retirement plans; and
|
• |
“qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds.
|
• |
an individual who is a citizen or resident of the United States;
|
• |
a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;
|
• |
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
|
• |
a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.
|
• |
the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable);
|
• |
the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or
|
• |
our common stock constitutes a U.S. real property interest (“USRPI”) by reason of our status as a U.S. real property holding corporation (“USRPHC”) for U.S. federal income tax purposes.
|
Page
|
|
F-2
|
|
F-3 - F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-8 - F-30
|
Kost Forer Gabbay & Kasierer
144 Menachem Begin Road, Building A
Tel-Aviv 6492102, Israel
|
Tel: +972-3-6232525
Fax: +972-3-5622555
ey.com
|
/s/ KOST FORER GABBAY & KASIERER
|
|
A Member of EY Global
|
March 28, 2018
|
|
Tel-Aviv, Israel
|
As of December 31,
|
||||||||
2017
|
2016
|
|||||||
ASSETS :
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
1,201
|
$
|
7
|
||||
Restricted cash
|
6
|
-
|
||||||
Marketable securities
|
606
|
-
|
||||||
Other accounts receivable and prepaid expenses
|
109
|
78
|
||||||
Total
current assets
|
1,922
|
85
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Deferred private placement costs
|
-
|
90
|
||||||
Property and equipment, net
|
267
|
61
|
||||||
Total
non-current assets
|
267
|
151
|
||||||
TOTAL ASSETS
|
$
|
2,189
|
$
|
236
|
For the Year ended December 31,
|
||||||||
2017
|
2016
|
|||||||
Operating expenses:
|
||||||||
Research and development expenses
|
$
|
4,438
|
$
|
673
|
||||
General and administrative expenses
|
6,629
|
1,039
|
||||||
Costs related to aborted IPO
|
-
|
621
|
||||||
Operating loss
|
11,067
|
2,333
|
||||||
Financial expense, net
|
6,977
|
1,360
|
||||||
Loss before taxes on income
|
18,044
|
3,693
|
||||||
Taxes on income
|
-
|
27
|
||||||
Net loss
|
$
|
18,044
|
$
|
3,720
|
||||
Net unrealized gain on available-for-sale investments
|
(2
|
)
|
-
|
|||||
Total comprehensive loss
|
$
|
18,042
|
$
|
3,720
|
||||
Net basic and diluted loss per share
|
(3.01
|
)
|
(2.69
|
)
|
||||
Weighted average number of Common Stock used in computing basic and diluted net loss per share
|
6,002,052
|
1,448,363
|
Common Stock
|
Treasury
|
Additional Paid-in
|
Accumulated
|
Other Comprehensive |
Total stockholders'
|
|||||||||||||||||||||||
Number
|
Amount
|
Shares
|
Capital
|
Deficit
|
income
|
(Deficiency)
|
||||||||||||||||||||||
Balance as of January 1, 2016
|
2,207,449
|
$
|
1
|
$
|
-
|
$
|
8,028
|
$
|
(9,853
|
)
|
$
|
-
|
$
|
(1,824
|
)
|
|||||||||||||
Modification of Consultants' warrants to purchase Common Stock
|
-
|
-
|
-
|
94
|
-
|
-
|
94
|
|||||||||||||||||||||
Waiver of salary by the Company's officer
|
-
|
-
|
-
|
304
|
-
|
-
|
304
|
|||||||||||||||||||||
Stock-based compensation related to options granted to employees and non-employees
|
-
|
-
|
-
|
243
|
-
|
-
|
243
|
|||||||||||||||||||||
Stock-based compensation related to RSUs granted to Board of Directors' member
|
-
|
-
|
-
|
28
|
-
|
-
|
28
|
|||||||||||||||||||||
Beneficial conversion feature in respect to Convertible Notes
|
-
|
-
|
-
|
177
|
-
|
-
|
177
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,720
|
)
|
-
|
(3,720
|
)
|
|||||||||||||||||||
Balance as of December 31, 2016
|
2,207,449
|
1
|
-
|
8,874
|
(13,573
|
)
|
-
|
(4,698
|
)
|
|||||||||||||||||||
-
|
||||||||||||||||||||||||||||
Shares issued with respect to reverse merger of AITT Inc.
|
103,200
|
*
|
)
|
-
|
(295
|
)
|
-
|
-
|
(295
|
)
|
||||||||||||||||||
Treasury shares
|
(90,000
|
)
|
*
|
)
|
(25
|
)
|
-
|
-
|
-
|
(25
|
)
|
|||||||||||||||||
Stock-based compensation related to options granted to employees and non-employees
|
-
|
-
|
-
|
536
|
-
|
-
|
536
|
|||||||||||||||||||||
Stock-based compensation related to RSUs granted to Board of Directors' member
|
3,927
|
*
|
)
|
-
|
(24
|
)
|
-
|
-
|
(24
|
)
|
||||||||||||||||||
Stock-based compensation related to RSs granted to members of the Board of Directors
|
856,910
|
*
|
)
|
-
|
2,549
|
-
|
-
|
2,549
|
||||||||||||||||||||
Cancellation of RSs to members of the Board of Directors
|
(246,312
|
)
|
*
|
)
|
-
|
844
|
-
|
-
|
844
|
|||||||||||||||||||
Issuance of warrants to service provider
|
-
|
-
|
-
|
480
|
-
|
-
|
480
|
|||||||||||||||||||||
Issuance of Common Stock, net of issuance costs
|
1,812,110
|
*
|
)
|
-
|
6,322
|
-
|
-
|
6,322
|
||||||||||||||||||||
Conversion of Convertible Notes into Common Stock upon the merger
|
1,397,068
|
*
|
)
|
-
|
3,973
|
-
|
-
|
3,973
|
||||||||||||||||||||
Issuance of shares upon exercise of options
|
52,902
|
*
|
)
|
1
|
-
|
-
|
1
|
|||||||||||||||||||||
Net unrealized gains on available-for-sale investments
|
-
|
-
|
-
|
-
|
-
|
2
|
2
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(18,044
|
)
|
-
|
(18,044
|
)
|
|||||||||||||||||||
Balance as of December 31, 2017
|
6,097,254
|
$
|
1
|
$
|
(25
|
)
|
$
|
23,260
|
$
|
(31,617
|
)
|
$
|
2
|
$
|
(8,379
|
)
|
For the year ended December 31,
|
||||||||
2017
|
2016
|
|||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(18,044
|
)
|
$
|
(3,720
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
38
|
25
|
||||||
Capital loss in respect to property and equipment
|
-
|
5
|
||||||
Stock-based compensation warrants, RSs and RSUs
|
4,385
|
365
|
||||||
Issuance of Common Stock to finder upon the conversion of Convertible Notes
|
18
|
-
|
||||||
Amortization of beneficial conversion feature and debt issuance costs related to Convertible Notes
|
1,046
|
1,050
|
||||||
Issuance cost related to
liability
warrants
|
457
|
-
|
||||||
Adjustment
of
liability
warrants
|
2,434
|
-
|
||||||
Revaluation of warrants to purchase Common Stock
|
2,978
|
-
|
||||||
Imputed interest on Convertible Notes, loans from related parties and others
|
33
|
299
|
||||||
Waiver of salary by the Company's officer
|
-
|
304
|
||||||
Change in:
|
||||||||
Other accounts receivables and prepaid expenses
|
(31
|
)
|
(67
|
)
|
||||
Trade payables
|
141
|
404
|
||||||
Other accounts payable
|
(574
|
)
|
291
|
|||||
Deferred IPO costs that was aborted
|
-
|
352
|
||||||
Net cash used in operating activities
|
(7,119
|
)
|
(692
|
)
|
||||
Cash flows from investing activities
|
||||||||
Increase in restricted cash
|
(6
|
)
|
-
|
|||||
Investment in marketable securities
|
(2,000
|
)
|
-
|
|||||
Proceeds from redemption of marketable securities
|
1,396
|
-
|
||||||
Selling of property and equipment
|
-
|
12
|
||||||
Purchase of property and equipment
|
(244
|
)
|
2
|
|||||
Purchase price that has been paid upon the reverse merger
|
(295
|
)
|
-
|
|||||
Net cash (used in) provided by investing activities
|
(1,149
|
)
|
14
|
|||||
Cash flows from financing activities
|
||||||||
Proceeds from issuance of units consisting of Common Stock and warrants, net of issuance costs
|
9,889
|
-
|
||||||
Proceeds from loan from related parties and others
|
57
|
340
|
||||||
Maturity of loan and interest from related parties and others
|
(418
|
)
|
-
|
|||||
Proceeds from bank loan
|
-
|
467
|
||||||
Repayment of bank loan
|
(42
|
)
|
(431
|
)
|
||||
Treasury shares
|
(25
|
)
|
-
|
|||||
Proceeds from issuance of Convertible Note
|
-
|
184
|
||||||
Deferred private placement costs that were paid
|
-
|
(4
|
)
|
|||||
Exercise of options
|
1
|
-
|
||||||
Net cash provided by financing activities
|
9,462
|
556
|
||||||
Increase (decrease) in cash and cash equivalents
|
1,194
|
(122
|
)
|
|||||
Cash and cash equivalents at the beginning of the year
|
7
|
129
|
||||||
Cash and cash equivalents at the end of the year
|
$
|
1,201
|
$
|
7
|
||||
Supplemental disclosure of non‑cash financing activities:
|
||||||||
Conversion of Convertible Notes into Common Stock
|
$
|
3,955
|
$
|
-
|
||||
Capitalization of deferred private placement costs
|
$
|
-
|
$
|
86
|
NOTE 1:- |
GENERAL
|
a. |
AIT Therapeutics, Inc. ("AITT" or the "Company") was incorporated on April 24, 2015 as KokiCare, Inc. under the laws of the State of Delaware. On January 9, 2017, the name of the Company was changed to AIT Therapeutics, Inc.
|
b. |
Reverse merger:
|
1. |
The Company received a $320 cash purchase price (the "Purchase Price") from AIT and used the cash purchase price to (i) pay off all the liabilities of the Company as of the Closing of the Merger, (ii) issue a cash dividend of $2.50 per share to its stockholders as of immediately prior to the Closing of the Merger, and (iii) acquire 90,000 (on a post-reverse stock split basis) shares of its common stock, par value $0.0001 per share (“Common Stock”) from the Company’s prior sole officer and director, for $25.
|
2. |
KokiCare Inc. adopted its Amended and Restated Certificate of Incorporation ("COI") to (i) change its name from "KokiCare Inc." to "AIT Therapeutics Inc.", (ii) increase its capitalization to provide for the issuance of up to 100,000,000 shares of its Common Stock and up to 10,000,000 shares of Preferred Stock, par value $0.0001 per share; and (iii) effect a one-for-100 reverse stock split of the Common Stock.
|
NOTE 1:- |
GENERAL (Cont.)
|
3. |
On December 31, 2016, Kokicare's Common Stock was quoted on the Pink Open Market of the OTC Markets
(the “OTC Pink”) under the symbol "KKIC". After the Merger, the symbol changed to "AITB".
|
c. |
Since its inception, the Company has devoted substantially most of its effort to business planning, research and development. The Company has incurred losses and has accumulated negative cash flow from operating activities amounted to $18,044 and $7,119 during the year ended December 31, 2017, respectively, and has an accumulated deficit of $31,617 as of December 31, 2017. The Company's management and the Board of Directors believe that the Company’s existing financial resources are adequate to satisfy its expected liquidity requirements for at least twelve month period from the date of approval of the financial statements (refer also to note 15). To further address the Company's liquidity needs, the Company has adopted a contingency plan, which was approved by the Board, to be effected, in whole or in part, at its discretion, to allow the Company to continue its operations and meet its obligations, to the extent required. The contingency plan consist of cost reduction, which include mainly the following steps: reduction in consultant's expenses, headcount, compensation paid to key management personal and overhead expenses. The contingency plan
will
commence in January 2019.
|
a. |
The Company is also continuing to evaluate additional sources of capital and financing. However, there is no assurance that additional capital and/or financing will be available to the Company, and even if available, whether it will be on terms acceptable to the Company or in amounts required.
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES
|
a. |
Use of estimates:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
b. |
Principles of consolidation:
|
c. |
Financial statements in U.S. dollars in thousands:
|
d. |
Cash equivalents:
|
e. |
Restricted cash:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
g. |
Property and equipment, net:
|
%
|
||
Computers and electronic equipment
|
33
|
|
Clinical and medical equipment
|
10-15
|
h. |
Impairment for long-lived assets:
|
i. |
Research and development expenses:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
j. |
Severance pay:
|
k. |
Income taxes:
|
l. |
Concentrations of credit risk:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
m. |
Legal and other contingencies:
|
n. |
Warrants to purchase Common Stock:
|
o. |
Treasury shares:
|
p. |
Basic and diluted net loss per share:
|
NOTE 2:- |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
q. |
Stock-based compensation:
|
2017
|
2016
|
|||
Dividend yield
|
0%
|
0%
|
||
Expected volatility
|
75%
|
75.2%
|
||
Risk-free interest
|
2.1%-3.5%
|
2.1%-3.6%
|
||
Expected life (years)
|
5.5-6
|
5.5-6.25
|
NOTE 2: - |
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
|
r. |
Impact of recently issued accounting standards:
|
NOTE 3:- |
OTHER ACCOUNTS RECEIVABLE
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Prepaid expenses
|
$
|
46
|
$
|
73
|
||||
Government authorities
|
63
|
5
|
||||||
$
|
109
|
$
|
78
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Cost:
|
||||||||
Computers and electronic equipment
|
$
|
32
|
$
|
28
|
||||
Clinical and medical equipment
|
359
|
119
|
||||||
391
|
147
|
|||||||
Accumulated depreciation:
|
||||||||
Computers and electronic equipment
|
27
|
20
|
||||||
Clinical and medical equipment
|
97
|
66
|
||||||
124
|
86
|
|||||||
Depreciated cost
|
$
|
267
|
$
|
61
|
NOTE 5:- |
OTHER ACCOUNTS PAYABLE
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Accrued expenses
|
$
|
4
50
|
$
|
851
|
||||
Employees and payroll accruals
|
90
|
88
|
||||||
Income tax
|
154
|
154
|
||||||
$
|
6
94
|
$
|
1,093
|
NOTE 6:- |
BANK LOAN
|
NOTE 7:- |
CONVERTIBLE NOTES
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Opening balance
|
$
|
2,895
|
$
|
1,552
|
||||
Receipt of Convertible Notes
|
-
|
184
|
||||||
BCF in respect of Convertible Notes
|
-
|
(177
|
)
|
|||||
Amortization of BCF
|
1,031
|
1,034
|
||||||
Amortization of debts issuance costs
|
15
|
16
|
||||||
Imputed interest
|
14
|
286
|
||||||
Conversion of Convertible Notes into Common Stock
|
(3,955
|
)
|
-
|
|||||
$
|
-
|
$
|
2,895
|
NOTE 8:- |
FAIR VALUE MEASUREMENT
|
Level 1 -
|
quoted prices in active markets for identical assets or liabilities;
|
Level 2 -
|
inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or
|
Level 3 -
|
unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
December 31,
|
||||
2017
|
||||
Risk-free interest rate (1)
|
2.64%-2.69
|
%
|
||
Expected volatility (2)
|
75
|
%
|
||
Expected life (in years) (3)
|
4.04-4.25
|
|||
Dividend yield (4)
|
0
|
%
|
||
Fair value per warrant
|
$
|
2.5-2.57
|
NOTE 8:- |
FAIR VALUE MEASUREMENT (Cont.)
|
(1) |
Risk-free interest rate - based on yield rates of non-index linked U.S. Federal Reserve treasury bonds.
|
(2) |
Expected volatility - was calculated based on actual historical stock price movements of comparable companies in the same industry over a term that is equivalent to the expected term of the option.
|
(3) |
Expected life - the expected life was based on the expiration date of the warrants.
|
(4) |
Dividend yield - was based on the fact that the Company has not paid dividends to its stockholders in the past and does not expect to pay dividends to its stockholders in the future.
|
Number of
warrants |
Fair value
of liability related to warrants |
|||||||
Balance at January 1, 2017
|
-
|
$
|
-
|
|||||
Fair value of warrants issued to investors and placement agent
|
1,933,654
|
3,760
|
||||||
Fair value of the adjustment liability warrants issued (see also Note 11c2)
|
1,701,616
|
2,434
|
||||||
Revaluation of warrants to purchase Common Stock
|
2,978
|
|||||||
Balance at December 31, 2017
|
3,635,270
|
$
|
9,172
|
NOTE 9:- |
TAXES ON INCOME
|
a. |
Tax rates applicable to AIT:
|
1. |
Taxable income of AIT is subject to a corporate tax rate as follow: 2017 - 24% and 2016 - 25%.
|
2. |
In December 2016, the Israeli Parliament approved the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), which reduces the corporate income tax rate to 24% (instead of 25%) effective from January 1, 2017 and to 23% effective from January 1, 2018.
|
b. |
AITT and Inc.:
|
c. |
Net operating losses carry forward:
|
NOTE 9:- |
TAXES ON INCOME (Cont.)
|
d. |
Deferred income taxes:
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Deferred tax assets:
|
||||||||
Operating loss carry forward
|
$
|
2,
584
|
$
|
1,381
|
||||
Reserves and allowances
|
7
|
5
|
||||||
Research and development
|
667
|
153
|
||||||
Net deferred tax asset before valuation allowance
|
3,
258
|
1,539
|
||||||
Valuation allowance
|
(3,
258
|
)
|
(1,539
|
)
|
||||
Net deferred tax asset
|
$
|
-
|
$
|
-
|
e. |
Loss before taxes on income consists of the following:
|
Year ended
December 31,
|
||||||||
2017
|
2016
|
|||||||
Foreign
|
$
|
10,574
|
$
|
3,727
|
||||
Domestic
|
7,470
|
(34
|
)
|
|||||
$
|
18,044
|
$
|
3,693
|
f. |
The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of valuation allowances in respect to deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.
|
g. |
Accounting for uncertainty in income taxes:
|
Year ended
December 31,
|
||||||||
2017
|
2016
|
|||||||
Balance at beginning of year
|
$
|
1
54
|
$
|
127
|
||||
Additions for current year's tax position
|
-
|
27
|
||||||
Balance at the end of year
|
$
|
1
54
|
$
|
154
|
NOTE 9:- |
TAXES ON INCOME (Cont.)
|
a. |
On October 22, 2013, AIT entered into a patent license agreement with a third party, pursuant to which AIT agreed to pay to the third party a non-refundable upfront fee of $150 and is obligated to pay 5% royalties of any licensed product revenues, but at least $50 per annum during the royalty period as defined in the agreement. As of December 31, 2017, AIT did not record any revenues and therefore no royalties were paid or accrued.
|
b. |
In August 2015, AIT entered into an Option Agreement (the "Option Agreement") with a third party whereby AIT acquired on September 7, 2016 for $25 the Option to purchase certain intellectual property assets and rights (the "Option"). According to the Option Agreement, the Option was originally exercisable for a period of six months, starting August 2015 (which was extended in 2016 for a period that ended January 2017). AIT exercised the Option in January 2017 and paid an exercise price of $500. Additionally, AIT is required to make certain one-time development and sales milestone payments to the third party, starting from the date on which AIT receives regulatory approval for the commercial sale of its first product candidate.
|
NOTE 11:- |
STOCKHOLDERS' DEFICIENCY
|
a. |
Share capital:
|
b. |
Effective December 29, 2016, the Company's Board of Directors and the stockholders approved a reverse stock split of the outstanding Common Stock, at the ratio of 1 for 100.
|
NOTE 11:- |
STOCKHOLDERS' DEFICIENCY (Cont.)
|
c. |
Issuance of Common Stock:
|
1. |
In December 2016, AIT entered into a Securities Purchase and Registration Rights Agreement (the "SPA") pursuant to which AIT agreed to issue and sell purchased units in the minimum aggregate amount of $10,000 and up to a maximum aggregate amount of $25,000.
|
NOTE 11:- |
STOCKHOLDERS' DEFICIENCY (Cont.)
|
2. |
In addition, based on the terms of the SPA, because the issuance of Units by AIT, together with issuances of Units by the Company following the Merger, failed to raise aggregate gross proceeds of at least $15,000, the Company
adjusted the number of warrants and
issued an additional 1,701,616
liability
warrants to the Investors. Consequently, the Company recorded in 2017 additional finance expenses amounting to $2,434.
|
3. |
In March 2017, the Company raised additional gross funds amounting to approximately $663 from new investors by issuance of an aggregate of 110,494 purchased units, each of which comprised one share of Common Stock and a warrant to acquire two shares of Common Stock at an exercise price of $6.9 per share. Direct and incremental costs related to such investment round amounted to $199. In addition, the Company incurred additional costs amounted to $15 with respect to warrants that the Company is obligated to issue to the placement agent. These costs were allocated between the Common Stock and the issued Warrants.
|
4. |
On January 13, 2017, the principal and accrued interest on all of AIT's outstanding Convertible Notes, amounting to $3,955 were converted into 1,390,595 shares of Common Stock. In addition, the Company issued 6,473 shares of Common Stocks as a finders’ fee upon the conversion of the Convertible Notes. Consequently, the Company recorded in 2017 finance expenses amounting to $18.
|
d. |
Treasury shares:
|
e. |
Stock options granted to employees:
|
Year ended
December 31, 2017
|
||||||||||||
Number of options
|
Weighted average exercise price
|
Weighted average remaining contractual life
|
||||||||||
Options outstanding at beginning of period
|
134,693
|
$
|
3.31
|
8.99
|
||||||||
Granted
|
240,500
|
6.34
|
||||||||||
Exercised
|
(52,902
|
)
|
0.02
|
|||||||||
Forfeited
|
(29,401
|
)
|
5.27
|
|||||||||
Options outstanding at end of period
|
292,890
|
6.18
|
9
|
|||||||||
Options exercisable at end of period
|
102,074
|
5.97
|
8.59
|
NOTE 11:- |
STOCKHOLDERS' DEFICIENCY (Cont.)
|
f. |
Options granted to non-employees:
|
Grant date
|
Number of options
|
Exercise
price
|
Expiration date
|
||||||
September 8, 2013
|
17,080
|
$
|
4.01
|
September 8, 2023
|
|||||
September 8, 2013
|
2,340
|
$
|
*
|
)
|
September 8, 2023
|
||||
December 29, 2013
|
3,511
|
$
|
4.01
|
December 29, 2023
|
|||||
April 8, 2014
|
9,158
|
$
|
*
|
)
|
April 8, 2024
|
||||
July 24, 2014
|
1,246
|
$
|
5.46
|
July 24, 2024
|
|||||
March 1, 2015
|
57,779
|
$
|
5.46
|
March 1, 2025
|
|||||
October 20, 2015
|
12,456
|
$
|
*
|
)
|
October 20, 2025
|
||||
December 1, 2015
|
11,210
|
$
|
5.46
|
December 1, 2025
|
|||||
November 8, 2016
|
9,601
|
$
|
*
|
)
|
November 8, 2026
|
||||
June 30, 2017
|
131,000
|
$
|
6.9
|
June 30, 2027
|
|||||
255,381
|
*) |
Represents an amount lower than $1.
|
NOTE 11:- |
STOCKHOLDERS' DEFICIENCY (Cont.)
|
g. |
Stock-based compensation:
|
Year ended
December 31,
|
||||||||
2017
|
2016
|
|||||||
Research and development expenses
|
$
|
138
|
$
|
109
|
||||
General and administrative expenses
|
3,767
|
134
|
||||||
$
|
3,905
|
$
|
243
|
h. |
Issuance of Restricted Stock Units (“RSUs”):
|
i. |
Issuance of Restricted Shares ("RSs"):
|
1. |
On January 13, 2017, the Company issued 492,624 RSs to one of the directors of the Company, of which 246,312 were to vest on the six-month anniversary of the grant date and the remaining vest on the 18-month anniversary of the grant date. During the second quarter of 2017, 246,312 RSs were cancelled. During the year ended 2017, the Company recorded general and administrative expenses of $1,961 in connection with the above grant, out of which $844 were recorded with respect to the RSs cancellation.
|
2. |
On June 24, 2016, AIT entered into an agreement with an individual to serve on AIT's Board of Directors pursuant to which AIT agreed to pay as compensation and benefits upon the consummation of a financing round in the United States (the “Financing Round”) (i) an annual retainer of $40 to be paid in equal monthly installments; (ii) a one-time bonus of $150 within 30 days following completion of the Financing Round (the "One-Time Bonus") and (iii) RSs equal to 3% of all issued and outstanding fully diluted shares of AIT after the completion of the Financing Round (including any option to purchase additional shares or similar held by the purchasers in the Financing Round) with a vesting schedule of 33.33% of such shares to be vested immediately upon the completion of a Financing Round, 33.33% of such shares to be vested on the 6 month anniversary of the completion of a Financing Round and the remaining 33.33% of such shares on the 12 month anniversary of the completion of a Financing Round. Upon the closing of a change of control transaction, as defined in the agreement, the unvested options shall be accelerated and vest immediately.
|
NOTE 11:- |
STOCKHOLDERS' DEFICIENCY (Cont.)
|
j. |
Warrants:
|
1. |
On October 3, 2013 (the "Grant Date"), AIT granted warrants to a strategic adviser to purchase 85,474 ordinary shares of AIT with an exercise price of $8.19 (the “Third-Party Warrant”). Such warrant was fully vested on the Grant Date and eligible for exercise during a period of three years commencing as of the issuance of the warrant and ending on the third anniversary of the Grant Date (the "Exercise Period"). In addition, the warrant expires in the event of an initial public offering (an “IPO”) or an acquisition of AIT unless already exercised.
|
2. |
In respect to the issuance of warrants as further described in note 10 (b). as of January 13, 2017, AIT accounted for the Third-Party Warrant pursuant to ASC 505-50 and measured the warrants at fair value according to the Black-Scholes model for a fair value of approximately $480. Such amount was fully recognized as of December 31, 2017 based on the vesting schedule of the warrant. The value of the Third-Party Warrant was based on the following assumptions: share price of $3.98, exercise price of $4.80, expected dividend rate of 0%, expected standard deviation of 75.23%, risk-free interest rates of 2.20% and expected life until exercise of 7 years.
|
3. |
On February 20, 2017, the Company’s Board of Directors approved the extension of the exercise period of options granted to one of the Company’s officers by an additional nine months from three months to one year from the termination date. The Company accounted for such extension pursuant to ASC 718 as a modification. Accordingly, additional compensation of $13 was calculated as the fair value of the modified award in excess of the fair value of the original award measured immediately before its terms have been modified based on current circumstances and recorded incremental fair value as an immediate compensation expense.
|
NOTE 12:- |
RELATED PARTIES BALANCES AND TRANSACTIONS
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Convertible Notes (c)
|
$
|
-
|
$
|
892
|
||||
Other accounts payable (b)
|
$
|
-
|
$
|
65
|
||||
Loans from related parties (a)
|
$
|
-
|
$
|
379
|
||||
Additional paid in capital (d)
|
$
|
3,393
|
$
|
304
|
Year ended
December 31,
|
||||||||
2017
|
2016
|
|||||||
Amounts charged to:
|
||||||||
General and administrative expenses (d)
|
$
|
3,543
|
$
|
220
|
||||
Research and Development expenses (b)
|
$
|
-
|
$
|
29
|
||||
Financial expense (a), (c)
|
$
|
13
|
$
|
82
|
a. |
On February 10, 2014, AIT signed a loan agreement with one of its stockholders for a total amount of $22. The loan bears an interest of 4% per annum.
|
b. |
In previous years, the Company entered into consultancy agreements with certain stockholders.
|
NOTE 12:- |
RELATED PARTIES BALANCES AND TRANSACTIONS (Cont.)
|
c. |
Commencing December 2013, AIT issued the Convertible Notes for which aggregate consideration of $892 was received from related parties (see also Note 7). The Convertible Notes bore an interest rate of 8% per annum compounded annually. Upon the closing of the Merger (see also Note 1b), all of the outstanding Convertible Notes were converted into 1,397,068 shares of Common Stock. For the years ended December 31, 2017 and 2016, the Company recorded finance expenses in the amounts of $0 and $72, respectively.
|
d. |
In November 2016, the Company's former CEO waived all of his requirements for certain debts of AIT owed to him for a total amount of $304.
|
NOTE 13:- |
FINANCIAL EXPENSES, NET
|
Year ended
December 31,
|
||||||||
2017
|
2016
|
|||||||
Financial expenses, net:
|
||||||||
Imputed interest in respect to Convertible Notes
|
15
|
286
|
||||||
Amortization of debt issuance costs
|
14
|
16
|
||||||
Amortization of BCF in respect to Convertible Notes
|
1,031
|
1,034
|
||||||
Issuance of Common Stock to finder fee upon the conversion of Convertible Notes
|
18
|
-
|
||||||
Adjustment
of
liability
warrants
(see also Note 11c2)
|
2,434
|
-
|
||||||
Revaluation of warrants to purchase Common Stock
|
2,978
|
-
|
||||||
Issuance cost related to warrants to investors and placement agent
|
457
|
-
|
||||||
Other financial expenses, net
|
30
|
24
|
||||||
$
|
6,977
|
$
|
1,360
|
NOTE 14:- |
BASIC AND DILUTED NET LOSS PER SHARE
|
Year ended
December 31
|
||||||||
2017
|
2016
|
|||||||
Net comprehensive income
|
$
|
(18,044
|
)
|
$
|
(3,720
|
)
|
||
Convertible Preferred A Shares accumulated dividend (*)
|
-
|
(177
|
)
|
|||||
Net loss attributable to Ordinary shares as reported
|
$
|
(18,044
|
)
|
$
|
(3,897
|
)
|
||
Shares used in computing net loss per share of Ordinary shares, basic and diluted
|
6,002,052
|
1,448,363
|
||||||
Net loss per share of Ordinary share, basic and diluted
|
(3.01
|
)
|
(2.69
|
)
|
NOTE 14:- |
BASIC AND DILUTED NET LOSS PER SHARE (Cont.)
|
NOTE 15:- |
SUBSEQUENT EVENTS
|
a. |
On January 31, 2018 the Company entered into an agreement (“Agreement”) with NitricGen, Inc. (“NitricGen”) to acquire a global, exclusive, transferable license and associated assets including intellectual property, know-how, trade secrets and confidential information from NitricGen related to NO delivery systems (“Delivery System”).
|
b. |
On February 16, 2018, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the several purchasers (the “Purchasers”).
|
SEC registration fee
|
$
|
2,439.49
|
|||
Printing fees and expenses
|
5,000 | ||||
Legal fees and expenses
|
30,000 | ||||
Accounting fees and expenses
|
5,000 | ||||
Transfer agent and registrar fees and expenses
|
5,000 | ||||
Miscellaneous
|
5,000 | ||||
Total
|
$
|
52,439.99 |
Exhibit
Number
|
Description
|
|
10.17 | ||
23.2
|
*
|
Consent of Latham & Watkins LLP (included in Exhibit 5.1)
|
24.1 | * | Power of Attorney (included on signature page) |
|
AIT THERAPEUTICS, INC.
|
|||||
|
By: /s/ Steven Lisi
|
|||||
|
Name: Steven Lisi
|
|||||
|
Title:
Chief Executive Officer and
Chairman of the Board of Directors |
Signature
|
Title
|
|
Dates
|
|
|
|
|
|
|
||
/s/ Steven A. Lisi |
Chairman and Chief Executive Officer (Principal Executive Officer)
|
|
May 7, 2018
|
|
|
Steven A. Lisi
|
|
|
|
|
|
|
|
||||
/s/ Stephen J. DiPalma |
Chief Financial Officer (Principal Financial Officer) (interim)
|
|
May 7, 2018
|
|
|
Stephen J. DiPalma
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Amir Avniel |
President and Chief Operating Officer
|
|
May 7, 2018
|
||
Amir Avniel
|
|
|
|
||
/s/ Ron Bentsur |
Director
|
|
May 7, 2018
|
|
|
Ron Bentsur
|
|
|
|||
|
|
|
|
|
|
/s/ Yoori Lee |
Director
|
|
May 7, 2018
|
|
|
Yoori Lee
|
|
|
|||
|
|
|
|
|
|
/s/David Grossman |
Director
|
|
May 7, 2018
|
|
|
David Grossman
|
|
|
|||
|
|
|
|
|
|
/s/ Ari Raved |
Director
|
|
May 7, 2018
|
|
|
Ari Raved
|
|
|
|||
|
|
|
|
|
|
/s/ Erick Lucera |
Director
|
|
May 7, 2018
|
|
|
Erick Lucera
|
|
|
|
Very truly yours,
/s/ Latham & Watkins LLP
|
1. |
Services of Consultant
. Danforth will assist the Company with matters relating to the Services. The Services are more fully described in
Exhibit A
attached hereto. Danforth and the Company will review the Services on a monthly basis to prioritize and implement the tasks listed on
Exhibit A
.
|
2. |
Compensation for Services
. In full consideration of Danforth’s full, prompt and faithful performance of the Services, the Company shall compensate Danforth a consulting fee more fully described in
Exhibit A
(the “Consulting Fee”). Danforth shall, from time to time, but not more frequently than twice per calendar month, invoice the Company for Services rendered, and such invoice will be paid upon fifteen (15) days of receipt. Each month the Parties shall evaluate jointly the current fee structure and scope of Services. Danforth reserves the right to an annual increase in consultant rates of up to 4%, effective January 1 of each year. Upon termination of this Agreement pursuant to Section 3, no compensation or benefits of any kind as described in this Section 2 shall be payable or issuable to Danforth after the effective date of such termination. In addition, the Company will reimburse Danforth for reasonable out-of-pocket business expenses, including but not limited to travel and parking, incurred by Danforth in performing the Services hereunder, upon submission by Danforth of supporting documentation reasonably acceptable to the Company. Any such accrued expenses in any given three (3) month period that exceed one thousand dollars ($1,000) shall be submitted to the Company for its prior written approval.
|
Company Accounts Payable Contact:
|
Hai Aviv
|
Hai@ait-pharm.com
|
|
972 54-4736596
|
|
Ilan Ramon 2, Science Park, Ness Ziona
|
|
7403635 Israel
|
Danforth Accounting:
|
Betsy Sherr
|
bsherr@danforthadvisors.com
|
|
(508) 277-0031
|
|
Danforth Advisors
|
|
PO Box 335
|
|
Southborough, MA 01772
|
3. |
Term and Termination
. The term of this Agreement will commence on the Effective Date and will continue through the anniversary of such date in the next calendar year (the “Term”). This Agreement may be extended for an additional period by mutual written agreement. This Agreement may be terminated by either Party hereto: (a) with Cause (as defined below), upon thirty (30) days prior written notice to the other Party; or (b) without cause upon sixty (60) days prior written notice to the other Party. For purposes of this Section 3, “Cause” shall include: (i) a breach of the terms of this Agreement which is not cured within thirty (30) days of written notice of such default or (ii) the commission of any act of fraud, embezzlement or deliberate disregard of a rule or policy of the Company.
|
4. |
Time Commitment
. Danforth will devote such time to perform the Services under this Agreement as may reasonably be required.
|
5. |
Place of Performance
. Danforth will perform the Services at such locations upon which the Company and Danforth may mutually agree. Danforth will not, without the prior written consent of the Company, perform any of the Services at any facility or in any manner that might give anyone other than the Company any rights to or allow for disclosure of any Confidential Information (as defined below).
|
6. |
Compliance with Policies and Guidelines
. Danforth will perform the Services in accordance with all rules or policies adopted by the Company that the Company discloses in writing to Danforth.
|
7. |
Confidential Information
. Danforth acknowledges and agrees that during the course of performing the Services, the Company may furnish, disclose or make available to Danforth information, including, but not limited to, material, compilations, data, formulae, models, patent disclosures, procedures, processes, business plans, projections, protocols, results of experimentation and testing, specifications, strategies and techniques, and all tangible and intangible embodiments thereof of any kind whatsoever (including, but not limited to, any apparatus, biological or chemical materials, animals, cells, compositions, documents, drawings, machinery, patent applications, records and reports), which is owned or controlled by the Company and is marked or designated as confidential at the time of disclosure or is of a type that is customarily considered to be confidential information (collectively the “Confidential Information"). Danforth acknowledges that the Confidential Information or any part thereof is the exclusive property of the Company and shall not be disclosed to any third party without first obtaining the written consent of the Company. Danforth further agrees to take all practical steps to ensure that the Confidential Information, and any part thereof, shall not be disclosed or issued to its affiliates, agents or employees, except on like terms of confidentiality. The above provisions of confidentiality shall apply for a period of five (5) years.
|
8. |
Intellectual Property
. Danforth agrees that all ideas, inventions, discoveries, creations, manuscripts, properties, innovations, improvements, know-how, inventions, designs, developments, apparatus, techniques, methods, and formulae that Danforth conceives, makes, develops or improves as a result of performing the Services, whether or not reduced to practice and whether or not patentable, alone or in conjunction with any other party and whether or not at the request or upon the suggestion of the Company (all of the foregoing being hereinafter collectively referred to as the “Inventions”), shall be the sole and exclusive property of the Company. Danforth hereby agrees in consideration of the Company’s agreement to engage Danforth and pay compensation for the Services rendered to the Company and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged that Danforth shall not, without the prior written consent of the Company, directly or indirectly, consult for, or become an employee of, any company which conducts business in the Field of Interest anywhere in the world. As used herein, the term “Field of Interest” shall mean the research, development, manufacture and/or sale of the products resulting from the Company’s technology. The limitations on competition contained in this Section 8 shall continue during the time that Danforth performs any Services for the Company, and for a period of three (3) months following the termination of any such Services that Danforth performs for the Company. If any part of this section should be determined by a court of competent jurisdiction to be unreasonable in duration, geographic area, or scope, then this Section 8 is intended to and shall extend only for such period of time, in such area and with respect to such activity as is determined to be reasonable. Except as expressly provided herein, nothing in this Agreement shall preclude Danforth from consulting for or being employed by any other person or entity.
|
9. |
Non Solicitation
. All personnel representing Danforth are employees or contracted agents of Danforth. As such, they are obligated to provide the Services to the Company and are obligated to Danforth under confidentiality, non-compete, and non-solicitation agreements. Accordingly, they are not retainable as employees or contractors by the Company and the Company hereby agrees not to solicit, hire or retain their services for so long as they are employees or contracted agents of Danforth and for two (2) years thereafter. Should the Company violate this restriction, it agrees to pay Danforth liquidated damages equal to thirty percent (30%) of the employee’s starting annual base salary and target annual bonus for each Danforth contracted agent hired by the Company in violation of this Agreement, plus Danforth’s reasonable attorneys’ fees and costs incurred in enforcing this agreement should the Company fail or refuse to pay the liquidated damages amount in full within thirty (30) days following its violation.
|
10. |
Placement Services
. In the event that Danforth refers a potential employee to the Company and that individual is hired, Danforth shall receive a fee equal to twenty percent (20%) of the employee’s starting annual base salary and target annual bonus. This fee is due and owing whether an individual is hired, directly or indirectly on a permanent basis or on a contract or consulting basis by the Company, as a result of Danforth’s efforts within one (1) year of the date applicant(s) are submitted to the Company. Such payment is due within thirty (30) days of the employee’s start date.
|
11. |
No Implied Warranty
. Except for any express warranties stated herein, the Services are provided on an "as is" basis, and the Company disclaims any and all other warranties, conditions, or representations (express, implied, oral or written), relating to the Services or any part thereof. Further, in performing the Services Danforth is not engaged to disclose illegal acts, including fraud or defalcations, which may have taken place. The foregoing notwithstanding, Danforth will promptly notify the Company if Danforth becomes aware of any such illegal acts during the performance of the Services. Because the Services do not constitute an examination in accordance with standards established by the American Institute of Certified Public Accountants (the “AICPA”), Danforth is precluded from expressing an opinion as to whether financial statements provided by the Company are in conformity with generally accepted accounting principles or any other standards or guidelines promulgated by the AICPA, or whether the underlying financial and other data provide a reasonable basis for the statements.
|
12. |
Indemnification
. Each Party hereto agrees to indemnify and hold the other Party hereto, its directors, officers, agents and employees harmless against any claim based upon circumstances alleged to be inconsistent with such representations and/or warranties contained in this Agreement. Further, the Company shall indemnify and hold harmless Danforth and any of its subcontractors against any claims, losses, damages or liabilities (or actions in respect thereof) that arise out of or are based on the Services performed hereunder, except for any such claims, losses, damages or liabilities arising out of the gross negligence or willful misconduct of Danforth or any of its subcontractors. The Company will endeavor to add Consultant and any applicable subcontractor to its insurance policies as additional insureds.
|
13. |
Independent Contractor
. Danforth is not, nor shall Danforth be deemed to be at any time during the term of this Agreement, an employee of the Company, and therefore Danforth shall not be entitled to any benefits provided by the Company to its employees, if applicable. Danforth’s status and relationship with the Company shall be that of an independent contractor and consultant. Danforth shall not state or imply, directly or indirectly, that Danforth is empowered to bind the Company without the Company's prior written consent. Nothing herein shall create, expressly or by implication, a partnership, joint venture or other association between the parties. Danforth will be solely responsible for payment of all charges and taxes arising from his or her relationship to the Company as a consultant.
|
14. |
Records
. Upon termination of Danforth’s relationship with the Company, Danforth shall deliver to the Company any property or Confidential Information of the Company relating to the Services which may be in its possession including products, project plans, materials, memoranda, notes, records, reports, laboratory notebooks, or other documents or photocopies and any such information stored using electronic medium.
|
15. |
Notices
. Any notice under this Agreement shall be in writing (except in the case of verbal communications, emails and teleconferences updating either Party as to the status of work hereunder) and shall be deemed delivered upon personal delivery, one day after being sent via a reputable nationwide overnight courier service or two days after deposit in the mail or on the next business day following transmittal via facsimile. Notices under this Agreement shall be sent to the following representatives of the Parties:
|
If to the Company:
|
|
Name:
|
Steve Lisi
|
Title:
|
Chief Executive Officer
|
Address:
|
500 Mamaroneck Avenue, Suite 320
|
Harrison, NY 10528
|
|
Phone:
|
516-665-8024
|
E-mail:
|
Steve@ait-pharm.com
|
If to Danforth:
|
|
Name:
|
Gregg Beloff
|
Title:
|
Managing Director
|
Address:
|
91 Middle Road
|
Southborough, MA 01772
|
|
Phone:
|
(617) 686-7679
|
E-mail:
|
gbeloff@danforthadvisors.com
|
16. |
Assignment and Successors
. This Agreement may not be assigned by a Party without the consent of the other which consent shall not be unreasonably withheld, except that each Party may assign this Agreement and the rights, obligations and interests of such Party, in whole or in part, to any of its Affiliates, to any purchaser of all or substantially all of its assets or to any successor corporation resulting from any merger or consolidation of such Party with or into such corporation. The term "Affiliate" shall mean all entities controlling, controlled by or under common control with Danforth or the Company, as the case may be. The term "control" shall mean the ability to vote fifty percent (50%) or more of the voting securities of any entity or otherwise having the ability to influence and direct the policies and direction of an entity
|
17. |
Force Majeure
. Neither Party shall be liable for failure of or delay in performing obligations set forth in this Agreement, and neither shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes beyond the reasonable control of either Party. In the event of such force majeure, the Party affected thereby shall use reasonable efforts to cure or overcome the same and resume performance of its obligations hereunder.
|
18. |
Headings
. The Section headings are intended for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
|
19. |
Integration; Severability
. This Agreement is the sole agreement with respect to the subject matter hereof and shall supersede all other agreements and understandings between the Parties with respect to the same. If any provision of this Agreement is or becomes invalid or is ruled invalid by any court of competent jurisdiction or is deemed unenforceable, it is the intention of the Parties that the remainder of the Agreement shall not be affected.
|
20. |
Waiver
: The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
|
21. |
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, excluding choice of law principles. The Parties agree that any action or proceeding arising out of or related in any way to this Agreement shall be brought solely in a Federal or State court of competent jurisdiction sitting in the State of New York.
|
22. |
Counterparts
. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which together will constitute one agreement.
|
DANFORTH ADVISORS, LLC
|
AIT THERAPEUTICS, INC. | ||||||||||
By:
|
/s/ Stephen DiPalma |
By:
|
|
/s/ Steve Lisi | |||||||
Print Name:
|
Stephen DiPalma
|
Print Name:
|
Steve Lisi
|
||||||||
Title:
|
Managing Director |
Title:
|
Chief Executive Officer | ||||||||
Date:
|
10/2/17 |
Date:
|
10/2/17
|
● |
Participate in longer-term strategic planning process
|
● |
Participate in financing activities, including additional capital raises and/or debt and equity restructurings
|
● |
Oversee the finance and accounting functions, including the Danforth engagement team
|
● |
Board, Audit, Compensation, and Corporate Governance committee meeting preparation, support and attendance
|
● |
Provide guidance and oversight related to SEC Compliance, systems selection, financial modeling and projections, and systems of internal control
|
● |
Assist with corporate and business development/licensing initiatives
|
● |
Review financial statements, and prepare reporting packages for investors, and the Board of Directors
|
● |
Prepare financial statement disclosures and SEC filings
|
● |
Prepare for and manage financial statement audit
|
● |
Review systems of internal control, processes and SOPS to identify areas for risk management and improvement
|
● |
Systems implementation
|
● |
Prepare detailed financial analyses, including forecasts, budgets, waterfall, etc.
|
● |
Input of budget in NetSuite or Great Plains software, or other appropriate system as may be mutually agreed, for variance analysis
|
● |
Manage insurance and banking
|
● |
Financing, audit, budget, payroll/workers comp set up or other special project(s), as required and requested
|
● |
Address complex accounting matters such as stock-based compensation
|
● |
Provide support for fundraising initiatives
|
● |
Assist with tax returns, as appropriate
|
Fees:
|
|
Managing Director: Stephen DiPalma
|
$
3
50/hour
|
Senior Consultant:
Matt Copeland
|
$
190
/hour
|
FP&A: Tim Carroll
|
$
190
/hour
|
Tel Aviv, Israel
|
/s/ KOST FORER GABBAY & KASIERER
|
May 7, 2018
|
A Member of EY Global
|