Business Context and Reporting Period
This Form 8-K is a current report filed by AIT Therapeutics, Inc. (not Beyond Air, Inc.) on May 7, 2018, regarding an event that occurred on March 16, 2018. The registrant is a Delaware corporation and an emerging growth company.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The report focuses exclusively on a legal contingency rather than financial performance data.
Material Changes and Events
On March 16, 2018, Empery Asset Master, Ltd., and related entities (collectively "Empery") filed a complaint in the Supreme Court of the State of New York (the "Empery Suit"). The suit concerns the adjustment of the exercise price and number of shares issuable under warrants issued to Empery on January 13, 2017. The dispute arises from circumstances surrounding an additional warrant offering that closed on February 16, 2018. Empery seeks money damages and declaratory relief based on breach of contract or contract reformation due to mutual mistake.
Outlook, Risks, and Management Commentary
- Management Stance: AIT Therapeutics intends to vigorously defend against the lawsuit.
- Financial Impact: Management believes it is unlikely that the resolution will have a material adverse effect on the company's financial condition, results of operations, or near-term liquidity.
- Expected Costs: The company expects to incur legal expenses in defending the claim.
- Risks: Forward-looking statements regarding the outcome are subject to risks and uncertainties. Actual results may differ materially from current expectations.
Investor Verification Checklist
- Verify the exact terms of the January 2017 Warrants and the February 2018 warrant offering to understand the basis of the "mutual mistake" claim.
- Monitor the status of the Empery Suit in the Supreme Court of the State of New York for any updates on damages sought or procedural rulings.
- Review the company's cash reserves to assess the ability to fund legal defense costs without impacting operations.
- Check subsequent filings for any updates on the litigation or changes in the company's assessment of materiality.