XAIR 10-Q Quarter ended March 31, 2017

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-55759

AIT Therapeutics, Inc.
(Exact name of registrant as specified in its charter)

+972.8.684.3313

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐  No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of May 15, 2017, there were 6,290,664 shares of common stock, par value $0.0001 per share (“ Common Stock ”), outstanding.

AIT THERAPEUTICS, INC.
INDEX TO FORM 10-Q FILING
FOR THE PERIOD ENDED MARCH 31, 2017

Table of Contents

Page

PART I	FINANCIAL INFORMATION	3
ITEM 1.	Financial Statements.	3
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	9
ITEM 4.	Controls and Procedures	9
PART II	OTHER INFORMATION	10
ITEM 6.	Exhibits.	10
SIGNATURES		11

PART I

FINANCIAL INFORMATION

ITEM 1.

Financial Statements.

3

	Page
Consolidated Balance Sheets	F - 2- F - 3
Consolidated Statements of Comprehensive Loss	F - 4
Statements of Changes in Stockholders' Equity (Deficiency)	F - 5
Consolidated Statements of Cash Flows	F - 6
Notes to Consolidated Financial Statements	F - 7 - F - 22

		March 31,				December 31,
		2017				2016
		Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	7,141			$	7
Other accounts receivables and prepaid expenses			177				78
Total current assets			7,318				85
NON-CURRENT ASSETS:
Deferred private placement costs			-				90
Property and equipment, net			80				61
Total non-current assets			80				151
TOTAL ASSETS		$	7,398			$	236

		March 31,				December 31,
		2017				2016
		Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Bank Loan		$	27			$	39
Trade payables			548				528
Other accounts payable			857				1,093
Loans from related parties and others			208				379
T otal current liabilities			1,640				2,039
NON-CURRENT LIABILITIES:
Convertible notes			-				2,895
Liability related to warrants			4,886				-
Total non-current liabilities			4,886				2,895
TOTAL LIABILITIES			6,526				4,934
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common Stock, $0.0001 par value per share -
100,000,000 and 11,665,085 shares authorized at March 31, 2017 (unaudited) and December 31, 2016 respectively; 6,290,663 and 2,207,449 shares issued and outstanding shares at March 31, 2017 (unaudited) and December 31, 2016, respectively			1				1
Preferred Stock, $0.0001 par value per share -
10,000,000 shares authorized at March 31, 2017 (unaudited) and December 31, 2016; 0 issued and outstanding shares at March 31, 2017 (unaudited) and December 31, 2016			-				-
Treasury shares			(25	)			-
Additional paid- in capital			20,752				8,874
Deficit accumulated			(19,856	)			(13,573	)
Total shareholders' equity (deficiency)			872				(4,698	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)		$	7,398			$	236

		Three months ended March 31,
		2017				2016
		Unaudited
Operating expenses:
Research and development expenses		$	1,439			$	224
General and administrative expenses			2,121				274
Costs related to aborted IPO			-				425
Operating loss			3,560				923
Financial expense, net			2,717				339
Loss before taxes on income			6,277				1,262
Tax on income			6				11
Net loss			6,283				1,273
Net basic and diluted loss per share		$	1.12			$	0.58
Weighted average number of shares of Common Stock used in computing basic and diluted net loss per share			5,617,762				2,207,449

		Common Stock								Treasury				Additional Paid-in				Accumulated				Total stockholders' Equity
		Number				Amount				Shares				Capital				Deficit				(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 AIT's CEO			-				-				-				304				-				304
Stock-based compensation related to options granted to employees and non-employees			-				-				-				243				-				243
Stock-based compensation related to RSU's 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			-				-				-				65				-				65
Stock-based compensation related to RSU's granted to Board of Directors' member			3,927				*)-				-				4				-				4
Issuance of restricted shares to members of the Board of Directors			856,909				*)-				-				1,329								1,329
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
Net loss			-				-				-				-				(6,283	)			(6,283	)
Balance as of March 31, 2017 (unaudited)			6,290,663			$	1			$	(25	)		$	20,752			$	(19,856	)		$	872

		Three months ended March 31,
		2017				2016
		Unaudited
Cash flows from operating activities
Net loss		$	(6,283	)		$	(1,273	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			6				6
Stock-based compensation, warrants, RS and RSU's			1,877				188
Issuance of Common Stock to finder upon the conversion of Convertible Notes			18				-
Amortization of beneficial conversion feature and debt issuance costs in the Convertible Notes			1,046				242
Issuance cost related to warrants to investors and placement agent			457				-
Issuance of additional warrants granted to investors			2,434
Revaluation of warrants to purchase Common Stock			(1,308	)			-
Imputed interest on Convertible Notes, loans from related parties and bank loan			30				71
Change in:
Receivables and prepaid expenses			(99	)			6
Trade payables			20				102
Other accounts payable			(410	)			116
Deferred IPO costs that was aborted			-				352
Net cash used in operating activities			(2,212	)			(190	)
Cash flows from investing activities
Purchase of property and equipment			(25	)			-
Purchase price that has been paid upon the reverse merger			(295	)			-
Net cash used in investing activities			(320	)			-
Cash flows from financing activities
Proceeds from loan from related parties and others			57				-
Maturity of loan from related parties and others			(241	)			-
Proceeds from issuance of Convertible Note			-				41
Proceeds from bank loan			-				204
Repayment of bank loan			(14	)			(154	)
Proceeds from issuance of units consist of Common Stock and warrants, net of issuance costs			9,889				-
Treasury shares			(25	)			-
Net cash provided by financing activities			9,666				91
Change in cash and cash equivalents			7,134				(99	)
Cash and cash equivalents at the beginning of the period			7				129
Cash and cash equivalents at the end of the period		$	7,141			$	30
Supplemental disclosure of non‑cash financing activities:
Conversion of Convertible Notes into Common Stock		$	3,955			$	-

		March 31,				December 31,
		2017				2016
		Unaudited
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

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.

		March 31,				February 17,				January 13,
		2017				2017				2017
		Unaudited
Risk-free interest rate (1)			1.93	%			1.87	%			1.89	%
Expected volatility (2)			75.2	%			75.2	%			75.2	%
Expected life (in years) (3)			5-4.75				5.00				5.00
Dividend yield (4)			0	%			0	%			0	%
Fair value per warrant		$	1.39-1.34			$	1.43			$	2.02

		Fair value of liability related to warrants
		Unaudited
Balance at January 1, 2017		$	-
Fair value of warrants granted to investors and placement agent			3,760
Fair value of additional warrants granted to investors			2,434
Revaluation of warrants to purchase Common Stock			(1,308	)
Balance at March 31, 2017 (unaudited)		$	4,886

		Three months period ended March 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			150,000				6.0
Forfeited			(5,481	)			4.44
Options outstanding at end of period			279,212			$	4.73				8.86
Options exercisable at end of period			103,430			$	2.71				7.40

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			2,492			$	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			$	0.01		November 8, 2026
			125,627

		Three months ended March 31,
		2017				2016
		Unaudited
Research and development		$	21			$	63
General and administrative expenses			44				23
		$	65			$	86

		March 31,				December 31,
		2017				2016
		Unaudited
Convertible Notes (d)		$	-			$	892
Other accounts payable (b), (c)		$	43			$	65
Loan from related parties (a)		$	105			$	379
Additional paid in capital (e)		$	304			$	304

		Three months ended March 31,
		2017				2016
		Unaudited
Amounts charged to:
General and administrative expenses (e), (f)		$	100			$	196
Research and Development expenses (b), (c)		$	15			$	82
Financial expense (a), (d)		$	13			$	35

		Three months ended March 31,
		2017				2016
		Unaudited
Financial expenses, net:
Bank charges and other		$	3			$	2
Imputed interest expense in respect to Convertible Notes			14				67
Imputed interest expense in respect to loans from related parties and others and loan from bank			16				3
Foreign currency translation adjustments, net			37				25
Amortization of debt issuance costs			15				4
Amortization of BCF in respect to Convertible Notes			1,031				238
Issuance of Common Stock to finder fee upon the conversion of Convertible Notes			18				-
Issuance of additional warrants granted to investors			2,434
Revaluation of warrants to purchase Common Stock			(1,308	)			-
Issuance cost related to warrants to investors and placement agent			457				-
		$	2,717			$	339

		Three months ended March 31,
		2017				2016
Net loss attributable to holders of Common stock as reported		$	(6,283	)		$	(1,273	)
Weighted average number of shares of Common stock used in computing basic and diluted net loss per share			5,617,762				2,207,449
Net loss per share of Common stock, basic and diluted		$	(1.12	)		$	(0.58	)

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements.” Forward-looking statements include statements about our expectations, beliefs or intentions regarding our product offerings, business, financial condition, results of operations, strategies or prospects. You can identify such forward-looking statements by the words “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “likely,” “goal,” “assumes,” “targets” and similar expressions and/or the use of future tense or conditional constructions (such as “will,” “may,” “could,” “should” and the like) and by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date such statements are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance. We undertake no obligation to update, and we do not have a policy of updating or revising, these forward-looking statements, except as required by applicable law. Please see Item 1A “Risk Factors” contained in our most recently filed Annual Report on Form 10-K, as updated by our subsequently filed Quarterly Reports on Forms 10-Q, for important factors that could cause actual results to differ materially from those in the forward-looking statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

We are an emerging biopharmaceutical company that is developing a single proprietary 160 parts-per-million (“ppm”) nitric oxide (“NO”) formulation and delivery system to treat certain respiratory infections for which we believe current treatments have limited effectiveness. Our current product candidates may be marketed as a combination drug and associated medical device; in that case, any final product would be composed of two distinct components: our proprietary delivery system and a specific gaseous NO drug, each of which may be subject to separate premarket reviews and approvals or clearance by the Food and Drug Administration (“FDA”).

We believe our novel system is designed to safely deliver a high dosage of NO to the lungs that has the potential to eliminate microbial infections, including bacteria, fungi and viruses. Current FDA approved 20 ppm NO vasodilation treatments are not intended to treat microbial infections and are approved for hypoxia but only in premature babies. NO is produced naturally by the body as an effective innate immunity mechanism. Clinical trials have demonstrated, however, that in order to combat severe infections, higher concentrations of an NO formulation are required. Based on our studies, we believe that 160 ppm is the minimum therapeutic dose to achieve the pulmonary antimicrobial effect of NO. To date, the FDA has not approved any NO formulation and delivery system for the delivery of 160 ppm antimicrobial dosage to the lungs.

To date, we have not generated revenue from the sale of any product, and we do not expect to generate revenue unless and until we obtain marketing approval of, and commercialize, our product candidates. As of March 31, 2017, we had an accumulated deficit of $19,856 thousand. Our financing activities are described below under “Liquidity and Capital Resources.”

References to “we”, “us”, “our” and the “Company” refer to AIT Therapeutics, Inc., together with its consolidated subsidiaries.

Critical Accounting Policies

We describe our significant accounting policies more fully in Note 2 to our interim consolidated financial statements for the three months ended March 31, 2017 contained in this Quarterly Report on Form 10-Q. We believe that the accounting policies below are critical in order to fully understand and evaluate our financial condition and results of operations.

We prepare our interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (U.S. GAAP).

The preparation of the interim consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions. Our management believes that the estimates, judgments and assumptions used are reasonable based upon information available at the time they are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the dates of the interim consolidated financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Information with respect to Recent Accounting Pronouncements may be found in Note 2 to the interim consolidated financial statements contained in this Quarterly Report on Form 10-Q.

Results of Operations

Three Months Ended March 31, 2017 Compared to the Three Months Ended March 31, 2016

Revenue

AIT Therapeutics, Inc. has not generated any revenues to date, including for the three month periods ended March 31, 2017 and 2016.

Research and Development Expenses

For the three month periods ended March 31, 2017 and 2016, we incurred Research and Development (“R&D”) expenses in the aggregate of $1,439 and $224 thousand, respectively. The increase is primarily due to  purchase of certain intellectual property in the amount of $500 thousand, expenses related to the issuance of warrants aggregating $480 thousand and an increase in costs related to clinical trials, subcontractors and other R&D consultants.

Our R&D expense is highly dependent on the execution of clinical trials and therefore is expected to fluctuate significantly from period to period.  We expect that our R&D expenses will materially increase because of our current and planned clinical activity, including a Phase II clinical study for the treatment of NTM Abscessus in Israel, for which initial documentation has recently been filed, together with our ongoing Israeli-based Phase III clinical study for the treatment of infants with bronchiolitis.

General and Administrative Expenses

General and administrative expenses consist primarily of payroll expenses, stock-based compensation expense, costs related to our recently-completed reverse merger, professional service fees for accounting, legal, facilities, travel expenses and other general and administrative expenses.

We expect our general and administrative expenses, such as accounting and legal fees, to increase now that we have become a U.S. public company, and we expect increases in the number of our executive, accounting and administrative personnel due to our anticipated growth.

For the three month periods ended March 31, 2017 and 2016, we incurred general and administrative expenses of $2,121 and $274 thousand, respectively. The increase of $1,847 thousand for the three month period ended March 31, 2017 as compared to the 2016 period resulted primarily from the increase of approximately $1.3 million in stock-based compensation mainly due to grants to board members and employees, payment of one-time bonus in amount of $150 thousand to one of our directors in connection with a recently-completed private placement,  and an increase in costs related to legal and accounting and issuance fees in connection with the reverse merger transaction and payroll expenses.

Financial Expenses, Net

Financial expense, net consists of imputed interest, expenses in respect of revaluation of warrants to purchase common stock, amortization of beneficial conversion feature (“BCF”) in respect of convertible notes, issuance cost related to warrants to investors, foreign currency translation adjustments and others. For more information, refer to note 10 to the interim consolidated financial statements as of March 31, 2017 contained herein.

For the three month periods ended March 31, 2017 and 2016, we incurred financial expenses, net of $2,717 and $339 thousand, respectively. The increase of $2,378 thousand resulted primarily due to issuance and revaluation of warrants granted to investors in connection with our recently-completed private placement in amount of $1.1 million, an increase in amortization of BCF in respect to the conversation of the convertible notes in amount of $793 thousand and issuance costs related to warrants to investors in amount of $457 thousand.

Stock-based Compensation

Our stock-based compensation expenses with respect to employees are recorded according to accounting standards codification (“ASC”) 718, which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors, including employee stock options under our stock plans, based on estimated fair values.

ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that will ultimately vest is recognized as expense over the requisite service periods in our consolidated statement of operations.

We apply ASC 505-50, “Equity Based Payments to Non-Employees”, with respect to options issued to non-employees.

We estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model. For the three month periods ended March 31, 2017 and 2016, our stock-based compensation expenses were $1,877 and $188 thousand, respectively. Stock-based compensation expenses for the three months ended March 31, 2017 increased as compared to the 2016 period, primarily due to restricted shares and warrants issued in 2017 to certain directors and a service provider, aggregating $1,329 and $480 thousand, respectively.

Cash Flows

Three Months Ended March 31, 2017 Compared to the Three Months Ended March 31, 2016

For the three months ended March 31, 2017 and 2016, net cash used in operations was $2,212 and $190 thousand, respectively. Cash was used primarily for increase in expenses related to our reverse merger transaction, private placement, payroll, clinical trials conducted in Israel, expenses related to subcontractors and third parties.

For the three months ended March 31, 2017 net cash used in investing activities was $320 thousand. We neither used net cash in, nor received net cash from, investing activities for the three months ended March 31, 2016. The increase in cash used in investing activities for the three month period ended March 31, 2017 as compared to the 2016 period resulted primarily from purchasing of property and equipment and our acquisition of the company used to effect our reverse merger transaction, aggregating $25 and $295 thousand, respectively.

Net cash provided by financing activities for the three months ended March 31, 2017, and the three months ended March 31, 2016, was $9,666 and $91 thousand, respectively. The increase in cash provided by financing activities for the three month period ended March 31, 2017 as compared to the 2016 period resulted primarily from proceeds from issuance of units, consisting of common stock of warrants, net of issuance costs, which totaled $9,889 thousand.

Liquidity and Capital Resources

We have incurred losses and generated negative cash flows from operations since inception. To date, we have not generated any revenue from the sale of products, and we do not expect to generate revenues from sale of our products in the next several years.  We have financed our operations to date primarily through proceeds from sales of our equity and equity-linked securities, including pursuant to recent private placements. Currently, our only source of liquidity is our current cash on hand.  We do not currently have any commitments for future external funding.

We will require significant additional financing in the future to fund our operations if and when we obtain regulatory approval and commercialize our products. Our future capital requirements will depend on many factors, including:

·

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.

Effects of Inflation and Currency Fluctuations

Our results of operations and cash flow are subject to fluctuations due to changes in foreign currency exchange rates. Certain of our expenses are denominated in New Israeli Shekels (“NIS”). Our results of operations and cash flow are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. Approximately 6% of our expenses are denominated in NIS. Changes of 5% and 10% in the USD/NIS exchange rate will increase/decrease our operation expenses by 0.3% and 0.6%, respectively. We do not hedge our foreign currency exchange risk. In the future, we may enter into formal currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates of our principal operating currencies. These measures, however, may not adequately protect us from significant changes in such fluctuations.

ITEM 3.      Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks in the ordinary course of our business.  Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.  Our market risk exposure is primarily a result of foreign currency exchange rates.

ITEM 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that is designed to provide reasonable assurance that information we are required to disclose in the reports we file or submit under the Exchange Act is accumulated and communicated to management in a timely manner. Our Principal Executive Officer and Principal Financial Officer evaluated this system of disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q and, based on such evaluation, concluded that the system was operating effectively as of such date to ensure appropriate disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 of the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II      OTHER INFORMATION

ITEM 6. Exhibits.

___________

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	AIT THERAPEUTICS, INC.
Date: May 15, 2017	/s/ Amir Avniel Amir Avniel President and Chief Executive Officer (Principal Executive Officer)
Date: May 15, 2017	/s/ Hai Aviv Hai Aviv Chief Financial Officer (Principal Financial and Accounting Officer)

EXHIBIT INDEX

	4.1		Form of Warrant, dated March 31, 2017, filed as Exhibit 4.1 to our Current Report on Form 8-K, as amended and filed with the SEC on April 4, 2017 and incorporated herein by reference.
	10.1		Employment Agreement, dated as of February 28, 2017, by and between Advanced Inhalation Therapies (AIT) Ltd. and Mr. Hai Aviv, filed as Exhibit 10.1 to our Current Report on Form 8-K, as amended and filed with the SEC on January 31, 2017 and incorporated herein by reference.
	10.2		Stock Purchase and Registration Rights Agreement, dated March 31, 2017, by and among AIT Therapeutics, Inc. and the Investors party thereto, filed as Exhibit 10.1 to our Current Report on Form 8-K, as amended and filed with the SEC on April 4, 2017 and incorporated herein by reference.
	10.3		Form of Subscription Agreement, dated March 31, 2017, by and among AIT Therapeutics, Inc. and the Investors party thereto, filed as Exhibit 10.2 to our Current Report on Form 8-K, as amended and filed with the SEC on April, 4, 2017 and incorporated herein by reference.
	31.1*		Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K
	31.2*		Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K
	32.1**		Certification of Chief Executive Officer pursuant to Item 601(b)(32) of Regulation S-K
	32.2**		Certification of Chief Financial Officer pursuant to Item 601(b)(32) of Regulation S-K
	101.INS*		XBRL Instance Document
	101.SCH*		XBRL Taxonomy Extension Schema
	101.CAL*		XBRL Taxonomy Extension Calculation Linkbase
	101.DEF*		XBRL Taxonomy Extension Definition Linkbase
	101.LAB*		XBRL Taxonomy Extension Label Linkbase
	101.PRE*		XBRL Taxonomy Extension Presentation Linkbase

___________

* Filed herewith.

** Furnished herewith.

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