XAIR 10-Q
Beyond Air, Inc. (XAIR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol | Name of each exchange on which registered: | ||
| The
|
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
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
As of February 10, 2026, there were shares of common stock, par value $ per share, outstanding.
BEYOND AIR, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q FILING
FOR THE PERIOD ENDED DECEMBER 31, 2025
Table of Contents
| 2 |
PART I FINANCIAL INFORMATION
ITEM 1. Financial Statements.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
INDEX
| 3 |
BEYOND AIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
| December 31, 2025 | March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Marketable securities | ||||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Other current assets and prepaid expenses | ||||||||
| Total current assets | ||||||||
| Licensed right to use technology | ||||||||
| Right-of-use lease assets | ||||||||
| Property and equipment, net | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Operating lease liabilities, current portion | ||||||||
| Loans payable, current portion | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, net | ||||||||
| Long-term debt, net | ||||||||
| Warrant liability | ||||||||
| Derivative liability | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity | ||||||||
| Preferred Stock, $ par value per share: shares authorized, shares issued and outstanding | ||||||||
| Common Stock, $ par value per share: shares authorized, and shares issued and outstanding as of December 31, 2025 and March 31, 2025, respectively (1) | ||||||||
| Treasury stock | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) | ( | ) | ||||||
| Total stockholders’ equity attributable to Beyond Air, Inc | ||||||||
| Non-controlling interest | ||||||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
BEYOND AIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share data)
(UNAUDITED)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Gross profit (loss) | ( | ) | ( | ) | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income/(expense): | ||||||||||||||||
| Dividend/investment income | ||||||||||||||||
| Interest and finance expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of warrant liability | ||||||||||||||||
| Change in fair value of derivative liability | ||||||||||||||||
| Foreign exchange gain/(loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss on extinguishment of debt | ( | ) | ( | ) | ||||||||||||
| Loss on disposal of fixed assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income/(expense) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total other income/(expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Less: net loss attributable to non-controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss attributable to Beyond Air, Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income/(loss), net of tax | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||||||||
| Comprehensive loss attributable to Beyond Air, Inc. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net basic and diluted loss per share attributable to Beyond Air, Inc. (1) | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of shares of common stock outstanding, basic and diluted (1) | ||||||||||||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
BEYOND AIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2025
(in thousands, except share data)
| Common Stock (1) | Treasury | Additional Paid-in | Accumulated | Accumulated Other Comprehensive | Non- Controlling | Total | ||||||||||||||||||||||||||
| Number | Amount | Stock | Capital | Deficit | Income | Interest | Equity | |||||||||||||||||||||||||
| Balance as of April 1, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
| Issuance of common stock – At The Market equity offering | ||||||||||||||||||||||||||||||||
| Issuance of common stock - 2025 Reverse Stock Split rounding | ||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| NeuroNos issuance of stock | - | |||||||||||||||||||||||||||||||
| Issuance of warrants through September 2025 Inducement | - | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||||||||||||||
| Issuance of common stock – At The Market equity offering | ||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| NeuroNos issuance of stock | - | |||||||||||||||||||||||||||||||
| Issuance of warrants | - | |||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock | ||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| 6 |
BEYOND AIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2024
(in thousands, except share data)
| Common Stock (1) | Treasury | Additional Paid-in | Accumulated | Accumulated Other Comprehensive (loss) | Non-Controlling | Total | ||||||||||||||||||||||||||
| Number | Amount | Stock | Capital | Deficit | Income | Interest | Equity | |||||||||||||||||||||||||
| Balance as of April 1, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
| Issuance of common stock warrants | - | |||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Other comprehensive income | - | |||||||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| Sale of common stock and pre-funded warrants | ||||||||||||||||||||||||||||||||
| Issuance of warrants through September 2024 debt agreement | - | |||||||||||||||||||||||||||||||
| Issuance of common stock – At The Market equity offering | ||||||||||||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||||||||||
| Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | ||||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock | ||||||||||||||||||||||||||||||||
| Stock-based compensation | - | ( | ) | |||||||||||||||||||||||||||||
| Other comprehensive loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
BEYOND AIR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
| For the Nine Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation | ||||||||
| Amortization of licensed right to use technology | ||||||||
| Stock-based compensation | ||||||||
| Amortization of debt discount and accretion of debt issuance costs | ||||||||
| Change in fair value of warrant liability | ( | ) | ( | ) | ||||
| Change in fair value of derivative liability | ( | ) | ( | ) | ||||
| Amortization of operating lease assets | ||||||||
| Paid in kind interest | ||||||||
| Provision for inventory losses | ||||||||
| Foreign currency adjustments | ( | ) | ||||||
| Loss on extinguishment of debt | ||||||||
| Loss on disposal of fixed assets | ||||||||
| Unrealized gain in marketable securities | ( | ) | ||||||
| Changes in: | ||||||||
| Inventory | ( | ) | ||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Other current assets and prepaid expenses | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from investing activities | ||||||||
| Purchase of marketable securities | ( | ) | ( | ) | ||||
| Proceeds from sale of marketable securities | ||||||||
| Issue of/return of security deposits | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash provided by (used in) investing activities | $ | ( | ) | $ | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of common stock through at the market offerings | ||||||||
| Proceeds from the sale of common stock of NeuroNos | ||||||||
| Proceeds from issuance of common stock through exercise of warrants | ||||||||
| Issuance of common stock warrants | ||||||||
| Issuance of common stock and pre-funded warrants through securities purchase agreement II | ||||||||
| Proceeds from long-term loan | ||||||||
| Debt issuance costs | ( | ) | ||||||
| Payment of loans | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes on cash and cash equivalents | ||||||||
| Increase in cash, cash equivalents and restricted cash | $ | $ | ( | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Debt discount | $ | $ | ||||||
| End of term loan liability | $ | $ | ( | ) | ||||
| Warrant liability | $ | $ | ( | ) | ||||
| Derivative liability | $ | $ | ( | ) | ||||
| Right-of-use assets | $ | $ | ( | ) | ||||
| Operating lease liability | $ | $ | ( | ) | ||||
| Fixed assets included in accounts payable | $ | $ | ||||||
| Supplemental disclosure of cash flow items: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 8 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 ORGANIZATION AND BUSINESS
Beyond Air, Inc. (together with its subsidiaries, “Beyond Air” or the “Company”) was incorporated on April 28, 2015 under Delaware law. On June 25, 2019, the Company’s name was changed to Beyond Air, Inc. from AIT Therapeutics, Inc.
The Company is a commercial-stage medical device and biopharmaceutical company developing a platform of nitric oxide (“NO”) generators and delivery systems (the “LungFit® platform”) capable of generating NO from ambient air. The Company’s first device, LungFit® PH (“LungFit® PH”) received premarket approval (“PMA”) from the U.S. Food and Drug Administration (“FDA”) in June 2022. The NO generated by the LungFit® PH system is indicated to improve oxygenation and reduce the need for extracorporeal membrane oxygenation in term and near-term (>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension in conjunction with ventilatory support and other appropriate agents. This condition is commonly referred to as persistent pulmonary hypertension of the newborn (“PPHN”). The LungFit® platform can generate NO up to 400 parts per million (“ppm”) for delivery to a patient’s lungs directly or via a ventilator. LungFit® can deliver NO either continuously or for a fixed amount of time at various flow rates and has the ability to either titrate dose on demand or maintain a constant dose. In July 2022, the Company commenced marketing LungFit® PH in the United States for PPHN as a medical device.
On November 26, 2024, the Company received European CE mark approval of the LungFit PH® system for the following:
| ● | The treatment of infants >34 weeks gestation with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension, in order to improve oxygenation and to reduce the need for extracorporeal membrane oxygenation; and |
| ● | The treatment of peri- and post-operative pulmonary hypertension in adults and newborn infants, infants and toddlers, children and adolescents, ages 0-17 years in conjunction to heart surgery, in order to selectively decrease pulmonary arterial pressure and improve right ventricular function. |
LungFit® can be used to treat patients on ventilators that require NO, as well as patients with chronic or acute severe lung infections via delivery of NO at concentrations > 100 parts per million (ppm) through a breathing mask or similar apparatus. The Company’s other areas of focus with the LungFit® platform beyond PPHN are nontuberculous mycobacteria (“NTM”) lung infection and those with various severe lung infections with underlying chronic obstructive pulmonary disease (“COPD”). The Company’s current product candidates will be subject to premarket reviews and approvals by the FDA, certification through the conduct of a conformity assessment by a notified body in the EU for the product to be CE marked, as well as comparable foreign regulatory authorities.
With Beyond Air’s focus on NO and its effect on the human condition, the Company has two additional programs that do not utilize the LungFit® system. Through the Company’s majority-owned affiliate Beyond Cancer, Ltd. (“Beyond Cancer”), NO is used to target solid tumors. The LungFit® platform is not utilized for the solid tumor indication due to the need for ultra-high concentrations of gaseous nitric oxide (“UNO”). A proprietary delivery system has been developed that is designed to safely deliver UNO in excess of 10,000 ppm directly to a solid tumor. This program has advanced to a phase 1 human clinical trial.
On
November 4, 2021, Beyond Air reorganized its oncology business into a new private company called Beyond Cancer. Beyond Air’s preclinical
oncology team and the exclusive right to the intellectual property portfolio utilizing UNO for the treatment of solid tumors now reside
with Beyond Cancer. Beyond Air has
The second program which does not utilize the LungFit® platform partially inhibits neuronal nitric oxide synthase (nNOS) in the brain to treat neurological conditions. The first target indication is autism spectrum disorder (“ASD”). On June 15, 2023, the Company announced that it has entered into an agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. (the “University”) to acquire the commercial rights for nNOS inhibitors being developed for the treatment of ASD and other neurological conditions. Currently, there are no FDA-approved therapies specifically for the treatment of ASD. Under the terms of the agreement, Beyond Air will make payments to the University over the three-year period from the date of the agreement for pre-clinical work. Also, the Company will pay a low single-digit royalty on net sales and certain one-time payments based on clinical, regulatory and sales milestones. Development timing is under review pending a proposed sale to XTL Biopharmaceutical Ltd.
On
March 24, 2025, Beyond Air reorganized its neurology business into a new private company called NeuroNOS. Beyond Air’s
infrastructure, for example regulatory, quality, legal, etc., is currently supporting the NeruoNOS team. Beyond Air has
The Company’s current product candidates will be subject to premarket reviews and approvals by the FDA, certification through the conduct of a conformity assessment by a notified body in the European Union (the “EU”), as well as comparable foreign regulatory authorities’ reviews or approvals in other countries or regions.
On
July 14, 2025, the Company effectuated a
All share and per share information in these accompanying unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the 2025 Reverse Stock Split for all periods presented. In addition, (i) a proportionate adjustment has been made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock, and (ii) the number of shares reserved for issuance pursuant to the 2013 Beyond Air Equity Incentive Plan has been reduced proportionately.
| 9 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to the Form 10-Q. Accordingly, they do not include all the information and footnotes required to be presented for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring items) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The unaudited condensed consolidated financial statements and related disclosures should be read in conjunction with the Company’s audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025 (the “2025 Annual Report”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on June 20, 2025.
Principles of Consolidation
These
unaudited condensed consolidated financial statements include the accounts of the Company and the accounts of all of the Company’s
subsidiaries and a variable interest entity (“VIE”) for which the Company is the primary beneficiary. As the Company has
both the power to direct activities of Beyond Cancer Ltd. and its affiliates (“Beyond Cancer”) and of NeuroNOS Ltd. and its
affiliates (“NeuroNos”) that most significantly impact these entities’ economic performance and the right to receive
benefits and losses that may potentially be significant, these financial statements are fully consolidated with those of the Company.
The non-controlling owners’
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could significantly differ from those estimates. On an ongoing basis, the Company evaluates its significant estimates and assumptions including expense recognition and accrual assumptions under consulting and clinical trial agreements, stock-based compensation, impairment assessments, accounting for licensed rights to use technologies and other long-lived assets, the valuation of warrants, contingency recognition and accruals and the determination of valuation allowance requirements on deferred tax attributes.
Going Concern, Liquidity and Other Uncertainties
The
Company used cash in operating activities of $
The Company expects to incur net losses and have significant cash outflows for at least the next year, including making significant investments in research and development. Management believes these factors raise substantial doubt about the Company’s ability to meet its obligations with cash on hand and concluded that the Company will require additional funding within one year from the date these financial statements are issued.
On
January 14, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”)
with an institutional investor. Pursuant to the Purchase Agreement, the Company agreed to sell to the investor, and the investor agreed
to purchase from the Company, in a private placement offering, an aggregate of (i) shares (the “Shares”) of the Company’s
common stock, par value $ per share (the “Common Stock”), at a purchase price of $ per Share, (ii) pre-funded
warrants to purchase up to
Management is confident that the efforts to arrange financing, while not assured, will enable the Company to meet its obligations.
The Company’s future capital needs and the adequacy of its available funds will depend on many factors, including, but not necessarily limited to, the success and costs of commercialization of the Company’s approved product and the actual cost and time necessary for current and anticipated preclinical studies, clinical trials and other actions needed to obtain certification or regulatory approval of the Company’s product candidates.
| 10 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued)
Other Risks and Uncertainties
The Company is subject to risks common to development and early-stage medical device companies including, but not limited to, new technological innovations, certifications or regulatory approval, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, uncertainty of market acceptance of approved products and the potential need to obtain additional financing. The Company is also dependent on third-party suppliers and, in some cases, single-source suppliers.
The Company’s products require approval or clearance from the FDA prior to commencement of commercial sales in the United States. There can be no assurance that the Company’s products beyond LungFit® PH in the U.S. will receive the required approvals or clearances. Certifications, approvals or clearances are also required in foreign jurisdictions in which the Company may license or sell its products. If the Company is denied such certifications or approvals or clearances or such certifications, approvals or clearances are delayed, such denial or delay may have a material adverse impact on the Company’s results of operations, financial position and liquidity. Further, there can be no assurance that the Company’s product will be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed, if at all.
Revenue Recognition
The Company generates revenue from the leases of its LungFit® PH devices to its customers under fixed fee arrangements over periods of up to three years. The fixed fee is typically broken down into ratable monthly payments over the term of the arrangement. The Company’s customers include hospitals and medical facilities. The Company’s LungFit® PH leases include filters, calibration gas, bagging kits, cables, adapters, and other components and accessories required to use the LungFit® PH device (the “Consumables”). The consumables’ quantities are varied and may be supplied upon demand of the customers and are unlimited, or the arrangement may provide for the maximum quantities available to the customer over the term of the arrangement. The Company’s LungFit® PH leases also include maintenance and training required to use the LungFit® PH device, as well as device back-up services (the “Services”), which are recorded in cost of revenue.
The Company accounts for its rental arrangements of LungFit® PH devices in accordance with Accounting Standards Codification 842, Leases (“ASC 842”). Under ASC 842, leases may be classified as either financing, sales-type, or operating, and the Company is required to disclose key information about leasing arrangements. The classification determines the pattern of revenue recognition and classification within the statement of operations and comprehensive loss. The Company typically classifies the rental arrangement of its LungFit® PH contracts as operating leases. The Company’s leases do not contain any restrictive covenants or any material residual value guarantees. The Company’s equipment leases may contain renewal options which range from one month to two years. The lease term is adjusted for renewal or termination options that the Company believes the customer is reasonably certain to exercise.
The Company elected the practical expedient applied to operating leases not to separate lease and non-lease components as long as the lease and non-lease components have the same timing and pattern of transfer. As such, the non-lease components, including the Consumables and Services, are combined with the predominant lease component. The total fixed fees that the Company is reasonably certain to collect are recognized on a straight line basis over the term of the arrangement. Additionally, the Company made an accounting policy election to present LungFit® PH revenue net of sales and other similar taxes.
At the lease commencement date, the Company will defer initial direct costs, including commission expense and the cost is recognized over the lease term on the same basis as lease income.
See Note 10 to the unaudited condensed consolidated financial statements for more information regarding leasing arrangements.
The Company also generates revenue from the sale of its LungFit® PH devices and consumables to its customers under distribution arrangements. Contracts include one performance obligation as any individual promised good or services other than delivery of the devices and consumables are generally either not capable of being distinct or not distinct within the context of the contracts. Purchased quantities of devices and consumables are varied and may be supplied upon demand of the customers. Revenue is recognized at a point in time when the Company delivers the goods to its customer. The transaction includes a fixed component based on contractual rates. Revenue recognized reflects the consideration the Company expects to receive in exchange for delivering the goods.
Amounts billed in advance of performance obligations being satisfied are recognized as deferred revenue.
The Company records the costs of shipping devices and consumables in cost of revenues in its unaudited condensed consolidated statements of operations and comprehensive loss.
| 11 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued)
Fair Value Measurements
As of December 31, 2025 and March 31, 2025, the Company’s financial instruments included restricted cash, marketable securities, accounts payable, long-term debt and liability classified warrants. The carrying amounts reported in the accompanying condensed consolidated financial statements for cash and cash equivalents, restricted cash and marketable securities approximate their respective fair values because of the short-term nature of these accounts. The carrying value of the Company’s long-term debt approximates fair value based on current interest rates for similar types of borrowings. The liability classified warrants liability is recorded at fair value and is Level 3 of the fair value hierarchy.
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis:
The fair value amounts as of December 31, 2025 are:
| (in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Marketable securities: | ||||||||||||||||
| Mutual funds | $ | $ | $ | $ | ||||||||||||
| Total assets measured and recorded at fair value | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Derivative liability | ||||||||||||||||
| Total liabilities measured and recorded at fair value | $ | $ | $ | $ | ||||||||||||
The fair value amounts as of March 31, 2025 are:
| (in thousands) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Marketable securities: | ||||||||||||||||
| Mutual funds | $ | $ | $ | $ | ||||||||||||
| Total assets measured and recorded at fair value | $ | $ | $ | $ | ||||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liability | $ | $ | $ | $ | ||||||||||||
| Total liabilities measured and recorded at fair value | $ | $ | $ | $ | ||||||||||||
The following table summarizes the Company’s short-term marketable securities with unrealized gains and losses as of December 31, 2025, aggregated by major security type:
| (in thousands) | Fair Value | Unrealized Gains | ||||||
| Mutual funds | $ | $ | ||||||
| Total short-term marketable securities | $ | $ | ||||||
The following table summarizes the Company’s short-term marketable securities with unrealized gains and losses as of March 31, 2025, aggregated by major security type:
| (in thousands) | Fair Value | Unrealized Gains | ||||||
| Mutual funds | $ | $ | ||||||
| Total short-term marketable securities | $ | $ | ||||||
| 12 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued)
Level 3 Valuation
Warrant liability
The warrant liability is remeasured each reporting period with the change in fair value recorded to other income (expense) in the condensed consolidated statement of operations and comprehensive loss until the warrants are exercised, expired, reclassified or otherwise settled.
The significant assumptions used in valuing the warrants were as follows:
| At December 31, 2025 | Warrants | |||
| Expected term (in years) | ||||
| Volatility | % | |||
| Risk-free rate | % | |||
| At March 31, 2025 | Warrants | |||
| Expected term (in years) | ||||
| Volatility | % | |||
| Risk-free rate | % | |||
Derivative liability
This feature was concluded to not be clearly and closely related to the host instrument and is required to be measured at fair value at each reporting period. The fair value was determined using the Monte Carlo valuation model. The key inputs of the simulation are the valuation date, the Company’s common stock share price and volatility, the risk-free rate, and the maximum convertible shares eligible to offset the outstanding balance on the Note.
| At November 4, 2025 (issuance) | Derivative | |||
| Maximum convertible shares | ||||
| Share price | $ | |||
| Volatility | % | |||
| Risk-free rate | % | |||
| At December 31, 2025 | Derivative | |||
| Maximum convertible shares | ||||
| Share price | $ | |||
| Volatility | % | |||
| Risk-free rate | % | |||
The following table is a summary of changes in the fair value of the Company’s Level 3 valuation for the warrants and derivative for the nine months ended December 31, 2025:
| Warrants | Derivative | |||||||
| Balance at March 31, 2025 | $ | $ | ||||||
| Issuance | ||||||||
| Change in fair value | ( | ) | ( | ) | ||||
| Balance at December 31, 2025 | $ | $ | ||||||
Cash and Cash Equivalents, Short-Term Investments and Restricted Cash
The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase and an investment in a U.S. government money market fund to be cash equivalents. The Company maintains its cash and cash equivalents in highly rated financial institutions in Australia, Israel, Ireland and the U.S., the balances of which, at times, may exceed federally insured limits. Marketable securities may include investment in a combination of fixed income bonds, U.S. Treasury securities, and mutual funds that are considered to be highly liquid and easily tradeable. The marketable securities are considered trading securities and are measured at fair value and are accounted for in accordance with ASC 320. The marketable securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within the Company’s fair value hierarchy.
As
of December 31, 2025 and March 31, 2025, restricted cash included approximately $
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,
which at times, may exceed the federal depository insurance coverage of $
The following table is the reconciliation of the presentation and disclosure of cash, cash equivalents, marketable securities by major security type, and restricted cash as shown on the Company’s condensed consolidated statements of cash flows:
| (in thousands) | December 31, 2025 | March 31, 2025 | ||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
| Marketable securities: | ||||||||
| Mutual funds | ||||||||
| Total marketable securities | $ | $ | ||||||
| Total cash, cash equivalents, marketable securities and restricted cash | $ | $ | ||||||
| 13 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued)
Research and Development
Research
and development expenses are charged to the unaudited condensed consolidated statements of operations and comprehensive loss as incurred.
Research and development expenses include salaries, benefits, stock-based compensation and costs incurred by outside laboratories, manufacturers,
clinical research organizations, consultants, and accredited facilities in connection with preclinical studies and clinical trials. Research
and development expenses are partially offset by the benefit of tax incentive payments for qualified research and development expenditures
from the Australian tax authority (“AU Tax Rebates”). The Company does not record AU Tax Rebates until payment is received
due to the uncertainty of receipt. For the nine months ended December 31, 2025 and December 31, 2024, the Company received $
Supplier Concentration
The Company relies on third-party suppliers to provide materials for its devices and consumables.
In
the three months ended December 31, 2025, the Company purchased approximately
In
the nine months ended December 31, 2025, the Company purchased approximately
Leases
Operating lease assets are included within operating lease right-of-use assets, and the corresponding operating lease obligation on the condensed consolidated balance sheets as of December 31, 2025 and March 31, 2025 in accordance with ASC 842, Leases. The Company has elected not to present short-term leases as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate of return, the Company used an incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments.
| 14 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3 PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
| (in thousands) | December 31, 2025 | March 31, 2025 | ||||||
| Clinical and medical equipment | $ | $ | ||||||
| Equipment deployable as part of a service offering | ||||||||
| Computer equipment | ||||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Depreciation
and amortization for the three months ended December 31, 2025 and December 31, 2024 was $
Depreciation
and amortization for the nine months ended December 31, 2025 and December 31, 2024 was $
NOTE 4 STOCKHOLDERS’ EQUITY
On
February 10, 2025, the Company entered into an At-The-Market Equity Offering Sales Agreement with BTIG, Inc. (the “2025
ATM”). Under the 2025 ATM, the Company may sell shares of its common stock having aggregate sales proceeds of up to $
During
the nine months ended December 31, 2025, the Company received net proceeds of $
On
November 4, 2025, the Company entered into an equity purchase agreement (the “Streeterville Purchase Agreement”) with Streeterville
Capital, LLC (“Streeterville”) for the purchase of up to $
Pursuant
to the Streeterville Purchase Agreement (so long as there is no balance outstanding on the Note (Note 9), the Company has the right,
but not the obligation, to direct Streeterville, by delivery to Streeterville of a put notice from time to time during a period of up
to two years, to purchase shares of Common Stock (i) in a minimum amount not less than $
Stock Option Plans
The Company’s Seventh Amended and Restated 2013 Beyond Air Equity Incentive Plan (the “2013 BA Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of the Company’s common stock. On October 11, 2024, the Company’s Board of Directors (the “Board”) approved an amendment to the 2013 BA Plan to increase the number of shares in the 2013 BA Plan by and to provide the Board the requested authority to (i) modify the exercise or grant price of an option or stock appreciation right after it is granted, (ii) cancel an option or stock appreciation right at a time when its exercise or grant price exceeds the fair market value of the underlying stock, in exchange for cash, another option or stock appreciation right, restricted stock, or other equity award, or (iii) take any other action that is treated as a repricing under generally accepted accounting principles. This amendment was approved by the Company’s stockholders at the 2025 annual stockholder meeting on November 22, 2024. The 2013 BA Plan has shares authorized for issuance. As of December 31, 2025, shares were available under the 2013 BA Plan.
| 15 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4 STOCKHOLDERS’ EQUITY (continued)
Restricted Stock Units
The fair value for the restricted stock unit awards was valued at the closing price of the Company’s common stock on the date of grant. Restricted stock units vest annually over .
A summary of the Company’s restricted stock unit awards for the nine months ended December 31, 2025 is as follows:
Number Of Shares | Weighted Average Grant Date Fair Value | |||||||
| Unvested as of March 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Unvested as of December 31, 2025 | $ | |||||||
Stock-based
compensation expense related to these stock issuances for the three months ended December 31, 2025 and December 31, 2024 was $
Stock-based
compensation expense related to these stock issuances for the nine months ended December 31, 2025 and December 31, 2024 was $
As of December 31, 2025, the Company had unrecognized stock-based compensation expense for the restricted stock unit awards in the 2013 BA Plan of approximately $ million, which is expected to be expensed over the weighted average remaining service period of years.
As of December 31, 2025, all vested shares had been issued.
Stock Options
The vesting terms of the options issued under the 2013 BA Plan are generally and expire from the grant date.
Number of Options | Weighted Average Exercise Price of Options | Weighted Average Remaining Contractual Life of Options | Aggregate Intrinsic Value (in thousands) | |||||||||||||
| Options outstanding as of March 31, 2025 | $ | $ | ||||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited | ( | ) | - | - | ||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Exercisable as of December 31, 2025 | $ | $ | ||||||||||||||
As of December 31, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2013 BA Plan of approximately $ million, which is expected to be expensed over the weighted average remaining service period of years.
For the nine months ended December 31, 2025, the weighted average fair value of options granted was $ per share.
On
November 4, 2025, the board of directors approved a one-time stock option repricing of options (the “Option Repricing”),
effective November 4, 2025. The Option Repricing was undertaken in accordance with, and as permitted by, the Company’s 2013 BA
Plan. Pursuant to the Option Repricing, all options granted pursuant to the 2013 BA Plan that are held by Company Board members, officers,
and employees expected to continue providing services to the Company were repriced, to the extent such options had an exercise price
in excess of $, the closing price per share of the Company’s common stock as reported on The Nasdaq Stock Market on November
3, 2025. All such options were repriced such that the exercise price per share was reduced to $. The modification resulted in $
| 16 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4 STOCKHOLDERS’ EQUITY (continued)
The Company’s 2021 Beyond Cancer Ltd Equity Incentive Plan (the “2021 BC Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of Beyond Cancer’s common shares. The vesting terms of the options issued under the 2021 BC Plan are generally and they expire from the grant date. On November 3, 2022, the Company’s Board of Directors approved an amendment to reserve for issuance an additional shares of common stock. The 2021 BC Plan has shares authorized for issuance. As of December 31, 2025, common shares were available under the 2021 BC Plan.
Number of Options | Weighted Average Exercise Price of Options | Weighted Average Remaining Contractual Life of Options | Aggregate Intrinsic Value (thousands) | |||||||||||||
| Options outstanding as of March 31, 2025 | $ | $ | ||||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited | ( | ) | - | - | ||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Exercisable as of December 31, 2025 | $ | $ | ||||||||||||||
As of December 31, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2021 BC Plan of approximately $ million, which is expected to be expensed over the weighted average remaining service period of years.
The Company’s 2023 NeuroNos Ltd. Equity Incentive Plan (the “2023 NNOS Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of NeuroNos Ltd.’s common stock. The vesting terms of the options issued under the 2025 NNOS Plan are generally four years and they expire ten years from the grant date. On September 15, 2025, the Company’s Board of Directors approved to reserve for issuance shares of common stock. As of December 31, 2025, shares were available under the 2023 NNOS Plan.
Number of Options | Weighted Average Exercise Price of Options | Weighted Average Remaining Contractual Life of Options | Aggregate Intrinsic Value (thousands) | |||||||||||||
| Options outstanding as of March 31, 2025 | $ | $ | ||||||||||||||
| Granted | - | - | ||||||||||||||
| Exercised | - | - | ||||||||||||||
| Forfeited | ( | ) | - | - | ||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | ||||||||||||||
| Exercisable as of December 31, 2025 | $ | $ | ||||||||||||||
As of December 31, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2023 NNOS Plan of approximately $ million, which is expected to be expensed over the weighted average remaining service period of years.
For the nine months December 31, 2025, the weighted average fair value of options granted was $ per share.
| 17 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4 STOCKHOLDERS’ EQUITY (continued)
| December 31, 2025 | December 31, 2024 | |||||||
| Risk-free interest rate | – | % | – | % | ||||
| Expected volatility (Beyond Air) | – | % | – | % | ||||
| Expected volatility (Beyond Cancer) | % | % | ||||||
| Expected volatility (NeuroNos) | % | % | ||||||
| Dividend yield | % | % | ||||||
| Expected terms (in years) | ||||||||
The Company determined that the fair value per share of NeuroNos’ common stock to be $ at the grant date during the nine months ended December 31, 2025 based on the valuation of common stock purchased by external investors during March 2025.
| Three Months Ended | Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Research and development | $ | $ | ( | ) | $ | $ | ||||||||||
| General and administrative | ||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
Warrants
A summary of the Company’s outstanding warrants as of December 31, 2025 is as follows:
| Warrant Holders | Number of Warrants | Exercise Price | Intrinsic Value (in thousands) | Date of Expiration | ||||||||||
| NitricGen agreement | $ | $ | ||||||||||||
| Avenue agreement | $ | |||||||||||||
| March 2024 raise | $ | |||||||||||||
| Avenue extension agreement | $ | |||||||||||||
| September 2024 equity offering | $ | |||||||||||||
| September 2024 debt instrument | $ | |||||||||||||
| September 2025 inducement | $ | |||||||||||||
| Subtotal | $ | $ | ||||||||||||
| Pre-funded warrants | $ | $ | ||||||||||||
| Total | $ | $ | ||||||||||||
| 18 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 5 OTHER CURRENT ASSETS AND PREPAID EXPENSES
A summary of other current assets and prepaid expenses as of December 31, 2025 and March 31, 2025 is as follows (in thousands):
| December 31, 2025 | March 31, 2025 | |||||||
| Research and development | $ | $ | ||||||
| Prepaid insurance | ||||||||
| Prepaid rents and tenant improvement | ||||||||
| Demonstration materials | ||||||||
| Value added tax receivable | ||||||||
| Deposits to secure manufacturing materials | ||||||||
| Other | ||||||||
| Total other current assets and prepaid expenses | $ | $ | ||||||
NOTE 6 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
A summary of accrued expenses and other current liabilities as of December 31, 2025 and March 31, 2025 is as follows (in thousands):
| December 31, 2025 | March 31, 2025 | |||||||
| Research and development | $ | $ | ||||||
| Professional fees | ||||||||
| Employee salaries and benefits | ||||||||
| Deferred revenue | ||||||||
| Goods received not invoiced | ||||||||
| Accrued interest | ||||||||
| Other | ||||||||
| Total accrued expenses and other current liabilities | $ | $ | ||||||
In accordance with ASC 260, Earnings Per Share, warrants that are accounted for as liabilities which are potentially dilutive have not been included in diluted earnings per share as they would have been anti-dilutive during the nine months ended December 31, 2025 and December 31, 2024.
| December 31, 2025 | December 31, 2024 | |||||||
| Common stock warrants | ||||||||
| Common stock options | ||||||||
| Restricted shares | ||||||||
| Total | ||||||||
The Company’s pre-funded warrants of and as of December 31, 2025 and March 31, 2025, respectively, were included in the calculation of diluted net loss per share.
| 19 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 8 COMMITMENTS AND CONTINGENCIES
License Agreements
In
August 2015, Beyond Air Ltd., a wholly-owned subsidiary of the Company (“BA Ltd.”) entered into an Option Agreement (the
“Option Agreement”) with Pulmonox Technologies Corporation (“Pulmonox”) whereby BA Ltd. acquired the option (the
“Option”) to purchase certain intellectual property assets and rights. On January 13, 2017, BA Ltd. exercised the Option
and paid $
On
January 31, 2018, the Company entered into an agreement (the “NitricGen 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 the LungFit®. The Company acquired the licensing right to use the technology
and agreed to pay NitricGen a total of $
Supply Agreement and Purchase Order
In
August 2020, the Company entered into a supply agreement with an initial expiration date of December 31, 2024. The agreement will renew
automatically for successive three-year periods unless and until the Company provides 12 months’ notice of intent not to renew.
As of the date of this report, the Company has not provided such notice. The Company has opened several non-cancellable purchase orders
and the outstanding amount remaining under the purchase order as of December 31, 2025 was approximately $
Contingencies
From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on its financial position, cash flows or results of operations.
| 20 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 9 LOANS
The following is a summary of long-term debt as of December 31, 2025:
| Loan Agreement | Promissory Note | Total | ||||||||||
| Principal balance outstanding | $ | $ | $ | |||||||||
| Paid in kind interest | ||||||||||||
| Debt discount | ( | ) | ( | ) | ( | ) | ||||||
| Amortization of debt discount | ||||||||||||
| Total | $ | $ | $ | |||||||||
The following is a summary of long-term debt as of March 31, 2025:
| Loan Agreement | ||||
| Principal balance outstanding | $ | |||
| Paid in kind interest | ||||
| Debt discount | ( | ) | ||
| Amortization of debt discount | ||||
| Total | $ | |||
Loan Agreement
On
November 1, 2024, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) for a secured loan with certain
lenders, including its Chief Executive Officer Steven Lisi and director Robert Carey, for an aggregate principal balance of $
On
June 2, 2025, the Company received $
As the repayments under the Amended Loan Agreement are based on a fixed percentage of future net sales, the timing and amounts of future principal payments may vary with the Company’s performance. The outstanding debt balance has been classified in the condensed consolidated balance sheets based on the Company’s current estimate of the repayment timing.
Promissory Note
On
November 4, 2025, the Company entered into and closed on a note purchase agreement (the “Note Purchase Agreement”) with Streeterville
Capital LLC (“Streeterville”), which provided for the issuance of a secured promissory note in
the principal amount of $
The Note contains an embedded put feature that meet the definition of an embedded derivative in accordance with ASC 815 (Note 2).
| 21 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10 – LEASE REVENUES
The
Company leases the LungFit® PH device to customers and receives a fixed rental fee over the term of the arrangement. Contract terms
(generally one-to-
The
Company recognized $
The
Company recognized $
The
Company has recorded $
The following schedule presents the minimum future lease payments under the LungFit® PH lease arrangements that were in place as of December 31, 2025 (in thousands):
| Future lease payments under the LungFit® PH lease arrangements | December 31 | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | $ | |||
The
LungFit® PH devices are included in Property and Equipment (Note 3) and have the useful life of
Depreciation
expense related to leased LungFit® PH devices was $
The depreciation expense related to customer leased devices is included in the cost of revenues in the condensed consolidated statements of operations and comprehensive loss.
Capitalized sales commissions
Sales commissions related to obtaining LungFit® PH lease agreements are accounted for as initial direct costs and are capitalized and amortized on a straight-line basis over the lease term. Total capitalized costs for the three and nine months ended December 31, 2025 and December 31, 2024 were immaterial.
| 22 |
BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 11 SEGMENTS
During
the three months ended December 31, 2025, NeuroNos issued and sold additional common shares, par value $ to certain investors
pursuant to a subscription agreement at a purchase price of $ per share. As of December 31, 2025, the Company retained
The following table summarizes financial performance by business segment for the three months ended December 31, 2025:
| (in thousands) | Beyond Air | Beyond Cancer | NeuroNos | Total | ||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general, and administrative | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest and finance expense | ( | ) | ( | ) | ||||||||||||
| Other non-operating income/(expense) | ( | ) | ( | ) | ||||||||||||
| Net loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Operating activities included in net loss: | ||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | ||||||||||||
| Stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
| Cash used in operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Cash used in investing | ( | ) | ( | ) | ( | ) | ||||||||||
| Cash provided by financing | ||||||||||||||||
| Impact of exchange rates | ( | ) | ( | ) | ||||||||||||
| Net change for the period | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
The following table summarizes financial performance by business segment for the nine months ended December 31, 2025:
| (in thousands) | Beyond Air | Beyond Cancer | NeuroNos | Total | ||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general, and administrative | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest and finance expense | ( | ) | ( | ) | ||||||||||||
| Other non-operating income/(expense) | ( | ) | ( | ) | ||||||||||||
| Net loss before income taxes | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Operating activities included in net loss: | ||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | ||||||||||||
| Stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
| Cash used in operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Cash provided by (used in) investing | ( | ) | ( | ) | ( | ) | ||||||||||
| Cash provided by financing | ||||||||||||||||
| Impact of exchange rates | ||||||||||||||||
| Net change for the period | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||
The following table summarizes financial performance by business segment for the three months ended December 31, 2024:
| (in thousands) | Beyond Air | Beyond Cancer | NeuroNos | Total | ||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ( | ) | ||||||||||||||
| Selling, general, and administrative | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest and finance expense | ( | ) | ( | ) | ||||||||||||
| Other non-operating income/(expense) | ( | ) | ( | ) | ||||||||||||
| Net loss before income taxes | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Operating activities included in net loss: | ||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | ||||||||||||
| Stock-based compensation expense | $ | $ | ( | ) | $ | $ | ||||||||||
| Cash used in operations | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Cash used in investing | ( | ) | ( | ) | ( | ) | ||||||||||
| Cash used in financing | ( | ) | ( | ) | ||||||||||||
| Impact of exchange rates | ( | ) | ||||||||||||||
| Net change for the period | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
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BEYOND AIR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 11 SEGMENTS (continued)
The following table summarizes financial performance by business segment for the nine months ended December 31, 2024:
| (in thousands) | Beyond Air | Beyond Cancer | NeuroNos | Total | ||||||||||||
| Capital expenditures | $ | $ | $ | $ | ||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ||||||||||||||||
| Research and development | ||||||||||||||||
| Selling, general, and administrative | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest and finance expense | ( | ) | ( | ) | ||||||||||||
| Other non-operating income/(expense) | ( | ) | ( | ) | ||||||||||||
| Net loss before income taxes | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Operating activities included in net loss: | ||||||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | ||||||||||||
| Stock-based compensation expense | $ | $ | $ | $ | ||||||||||||
| Cash used in operations | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
| Cash provided by investing | ||||||||||||||||
| Cash provided by financing | ||||||||||||||||
| Impact of exchange rates | ( | ) | ||||||||||||||
| Net change for the period | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||
The following table summarizes financial information by business segment at December 31, 2025:
| (in thousands) | Beyond Air | Beyond Cancer | NeuroNos | Total | ||||||||||||
| Cash, cash equivalents and marketable securities | $ | $ | $ | $ | ||||||||||||
| All other assets | ( | ) | ||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||
| Total liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net assets | $ | $ | $ | $ | ||||||||||||
| Non-controlling interest | $ | $ | $ | $ | ||||||||||||
The following table summarizes financial information by business segment at March 31, 2025:
| (in thousands) | Beyond Air | Beyond Cancer | NeuroNos | Total | ||||||||||||
| Cash, cash equivalents and marketable securities | $ | $ | $ | $ | ||||||||||||
| All other assets | ||||||||||||||||
| Total assets | $ | $ | $ | $ | ||||||||||||
| Total liabilities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net assets | $ | $ | $ | $ | ||||||||||||
| Non-controlling interest | $ | $ | $ | $ | ||||||||||||
NOTE 12 – SUBSEQUENT EVENTS
On
January 8, 2026, XTL Biopharmaceuticals Ltd. (“XTL”) entered into a letter of intent to acquire our
During
January 2026, Streeterville elected to purchase
million shares of common stock at an average of $ per share
which offset principal of approximately $
On January 14, 2026, the Company entered into a securities
purchase agreement whereby the Company agreed to sell to an institutional investor, and the investor agreed to purchase from the Company,
in a private placement offering, an aggregate of (i) shares of the Company’s common stock at a purchase price of $
per share, (ii) pre-funded warrants to purchase up to
On January 30, 2026, the Company held its 2026 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved the Eighth Amended and Restated 2013 Equity Incentive Plan to increase the number of shares reserved for issuance in the 2013 BA Plan by . As a result, the 2013 BA Plan has shares authorized for issuance.
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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 (this “Form 10-Q”) contains “forward-looking statements.” We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, prospective product candidates and products, product approvals, timing of our clinical development activities, research and development costs, timing and likelihood of success and the plans and objectives of management for future operations and future results of anticipated products are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements express or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “expect,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar conditional expressions. The forward-looking statements in this Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Form 10-Q and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described under the sections in this Form 10-Q titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 1A “Risk Factors” contained in our most recently filed Annual Report on Form 10-K, as well as the following:
| ● | our ability to successfully commercialize our LungFit® PH system in the U.S.; | |
| ● | our expectation to incur losses for the next year; | |
| ● | our ability to predict accurately the demand for our products, and products under development and to develop strategies to address markets successfully; | |
| ● | the possibility that products may contain undetected errors or defects or otherwise not perform as anticipated; | |
| ● | the anticipated development of markets we sell our products into and the success of our products in these markets; | |
| ● | our future capital needs and our need to raise additional funds; | |
| ● | our ability to build a pipeline of product candidates and develop and commercialize our approved products; | |
| ● | our ability to enroll patients in clinical trials, timely and successfully complete those trials and receive necessary certifications or regulatory approvals; | |
| ● | our ability to maintain our existing or future collaborations or licenses; | |
| ● | our ability to protect and enforce our intellectual property rights; | |
| ● | Federal, state, and foreign regulatory requirements, including the U.S Food and Drug Administration (“FDA”) regulation of our approved product and product candidates; | |
| ● | our ability to obtain and retain key executives and attract and retain qualified personnel; and | |
| ● | our ability to successfully manage our growth, including as a commercial-stage company. |
Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this Form 10-Q and the documents that we reference in this Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Beyond Air, Inc., the Beyond Air logo, and other trademarks or service marks of Beyond Air, Inc. appearing in this Form 10-Q are the property of Beyond Air, Inc. This Form 10-Q also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks and tradenames referred to in this Form 10-Q appear without the ® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames.
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Introduction
We are a commercial-stage medical device and biopharmaceutical company developing a platform of nitric oxide (“NO”) generators and delivery systems (the “LungFit® platform”) capable of generating NO from ambient air. The Company’s first device, LungFit® PH received premarket approval (“PMA”) from the FDA in June 2022. The NO generated by the LungFit® PH system is indicated to improve oxygenation and reduce the need for extracorporeal membrane oxygenation in term and near-term (>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension in conjunction with ventilatory support and other appropriate agents. This condition is commonly referred to as persistent pulmonary hypertension of the newborn (“PPHN”). The LungFit® platform can generate NO up to 400 parts per million (“ppm”) for delivery to a patient’s lungs directly or via a ventilator. LungFit® can deliver NO either continuously or for a fixed amount of time at various flow rates and has the ability to either titrate dose on demand or maintain a constant dose. In July 2022, we commenced marketing LungFit® PH in the United States for PPHN as a medical device.
On November 26, 2024, the Company received European CE mark approval of the LungFit PH® system for the following:
| ● | The treatment of infants >34 weeks gestation with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension, in order to improve oxygenation and to reduce the need for extracorporeal membrane oxygenation; and | |
| ● | The treatment of peri- and post-operative pulmonary hypertension in adults and newborn infants, infants and toddlers, children and adolescents, ages 0-17 years in conjunction to heart surgery, in order to selectively decrease pulmonary arterial pressure and improve right ventricular function |
LungFit® can be used to treat patients on ventilators that require NO, as well as patients with chronic or acute severe lung infections via delivery of NO at concentrations > 100 parts per million (ppm) through a breathing mask or similar apparatus. Furthermore, we believe that there is a high unmet medical need for patients suffering from certain severe lung infections that the LungFit® platform can potentially address. The Company’s other areas of focus with the LungFit® platform beyond PPHN are nontuberculous mycobacteria (“NTM”) lung infection and those with various severe lung infections with underlying chronic obstructive pulmonary disease (“COPD”). Our current product candidates will be subject to premarket reviews and approvals by the FDA, certification through the conduct of a conformity assessment by a notified body in the EU for the product to be CE marked, as well as comparable foreign regulatory authorities.
With Beyond Air’s focus on NO and its effect on the human condition, there are two additional programs that do not utilize our LungFit® system. Through our majority-owned affiliate Beyond Cancer, Ltd. (“Beyond Cancer”), NO is used to target solid tumors. The LungFit® platform is not utilized for the solid tumor indication due to the need for ultra-high concentrations of gaseous nitric oxide (“UNO”). A proprietary delivery system has been developed that is designed to safely deliver UNO in excess of 10,000 ppm directly to a solid tumor. This program is currently in phase 1 human clinical trial.
On November 4, 2021, Beyond Air reorganized its oncology business into a new private company called Beyond Cancer. Beyond Air’s preclinical oncology team and the exclusive right to the intellectual property portfolio utilizing UNO for the treatment of solid tumors now reside with Beyond Cancer. Beyond Air has 80% ownership in Beyond Cancer.
The second program, which does not utilize the LungFit® platform, partially inhibits neuronal nitric oxide synthase (“nNOS”) in the brain to treat neurological conditions. The first target indication is autism spectrum disorder (“ASD”). On June 15, 2023, the Company announced that it has entered into an agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. (the “University”) to acquire the commercial rights for nNOS inhibitors being developed for the treatment of ASD and other neurological conditions. Currently, there are no FDA-approved therapies specifically for the treatment of ASD. Under the terms of the agreement, Beyond Air shall pay to the University compensation for pre-clinical work over the three-year period from the date of the agreement. Also, the Company will pay to the University a low single-digit royalty on net sales and certain one-time payments based on clinical, regulatory and sales milestones. Development timing is under review pending a proposed sale to XTL Biopharmaceutical Ltd.
On March 24, 2025, Beyond Air reorganized its neurology business into a new private company called NeuroNOS Limited (“NeuroNOS”). Beyond Air’s infrastructure, for example regulatory, quality, legal, etc, is currently supporting the NeruoNOS team. Beyond Air has 84.75% ownership in NeuroNOS.
LungFit® PH is the first FDA-approved and CE Mark system using our patented plasma pulse technology to generate on-demand NO from ambient air and, regardless of dose or flow, deliver it to a ventilator circuit. The device uses a medical air compressor to drive room air through a plasma chamber in the center of the unit where pulses of electrical discharge are created between two electrodes. The system uses the power equivalent to a 60-watt lightbulb to ionize the nitrogen and oxygen molecules, which then combine as NO with low levels of nitrogen dioxide (“NO2”) created as a byproduct. The products are then passed through a Smart Filter, which removes the toxic NO2 from the internal circuit. With respect to PPHN, the novel LungFit® PH is designed to deliver a dosage of NO to the lungs that is consistent with current guidelines for delivery of 20 ppm NO with a range of 0.5 ppm – 80 ppm (low concentration NO) for ventilated patients.
We believe the ability of LungFit® PH to generate NO from ambient air provides us with many competitive advantages over the current standard of NO delivery systems in the U.S., the EU, Japan and other markets. For example, LungFit® PH does not require the use of a high-pressure cylinder, does not require cumbersome purging procedures and places less burden on hospital staff in carrying out safety procedures.
Our novel LungFit® platform can also deliver a high concentration (>150 ppm) of NO directly to the lungs, which we believe has the potential to eliminate microbial infections including bacteria, fungi and viruses, among others. We believe that current FDA-approved NO vasodilation treatments would have limited success in treating microbial infections given the low concentrations of NO being delivered (<100 ppm). Given that NO is produced naturally by the body as an innate immunity mechanism, at a concentration of 200 ppm, supplemental high dose NO should aid in the body’s fight against infection. Based on our preclinical studies and clinical trials, we believe that 150 ppm is the minimum therapeutic dose to achieve the desired pulmonary antimicrobial effect of NO. To date, neither the FDA nor comparable foreign regulatory agencies in other countries or regions have approved any NO formulation and/or delivery system for >80 ppm NO.
LungFit® PH for the treatment of Persistent Pulmonary Hypertension of the Newborn (PPHN)
In June 2022, the FDA approved LungFit® PH to improve oxygenation and reduce the need for extracorporeal membrane oxygenation in term and near-term (>34 weeks gestation) neonates with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension in conjunction with ventilatory support and other appropriate agents.
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On November 26, 2024, the company received European CE mark approval of the LungFit PH® system for the following:
| ● | The treatment of infants >34 weeks gestation with hypoxic respiratory failure associated with clinical or echocardiographic evidence of pulmonary hypertension, in order to improve oxygenation and to reduce the need for extracorporeal membrane oxygenation; and |
| ● | The treatment of peri- and post-operative pulmonary hypertension in adults and newborn infants, infants and toddlers, children and adolescents, ages 0-17 years in conjunction to heart surgery, in order to selectively decrease pulmonary arterial pressure and improve right ventricular function |
LungFit® PH is the inaugural device from the LungFit® platform of NO generators that use patented ionizer technology and is the first FDA-approved and CE Marked product for Beyond Air.
We submitted a PMA supplement to the FDA in November 2023 for the expansion of the label to include certain cardiac surgeries. The submission has been withdrawn in favor of our submission of our second generation LungFit PH. According to the most recent year-end report from Mallinckrodt Pharmaceuticals (“Mallinckrodt”), sales of NO were $261.4 million in 2024 (down from $303.2 million in 2023) for the United States, Canada, Japan, Mexico and Australia, with ~90% in the United States. Outside of the U.S. there are multiple market participants which translates to considerably lower relative sales than in the U.S. We believe the U.S. sales potential of LungFit® PH to be approximately $350 million and worldwide sales potential to be approximately $700 million or greater. We initiated the first phase of our commercial launch in July 2022 (the limited launch phase to introduce Lungfit® PH and Beyond Air to hospitals), and entered into phase 2 (target initial market share gains in certain geographies) with an expanded commercial presence during the spring of 2023 in the U.S. We recently entered the final phase of our launch process where we will equip our commercial organization to become the market leader in the U.S. in a few years. Since receiving CE Mark in late November, 2024, we have received regulatory approvals in more than 10 other countries outside of the United States and EU. Additionally, we have signed distribution agreements covering 40 countries outside of the United States. We anticipate significant contribution to revenues in fiscal 2026 and beyond from these and future partnerships.
LungFit® PRO for the treatment of viral lung infections in hospitalized patients
Viral Community-Acquired Pneumonia (including COVID-19)
Viral pneumonia in adults is most commonly caused by rhinovirus, respiratory syncytial virus (“RSV”) and influenza virus. However, newly emerging viruses (including SARS-CoV-1, SARS-CoV-2, avian influenza A, and H1N1 viruses) have been identified as pathogens contributing to the overall burden of adult viral pneumonia. COVID-19 is an infectious disease caused by SARS-CoV-2, that resulted in a global pandemic, causing millions of hospitalizations and over 7 million deaths worldwide reported as of January 2024, according to the World Health Organization. Excluding the pandemic, there are approximately 350,000 annual viral pneumonia hospitalizations in the U.S., and up to 16 million annual viral pneumonia hospitalizations globally. For the broader annual viral pneumonia hospitalizations, we believe U.S. market potential to be greater than $1.5 billion and worldwide market potential to be greater than $3 billion.
We initiated a pilot clinical trial in late 2020 using our novel LungFit® PRO system at 150 ppm to treat patients with VCAP. The trial was a multi-center, open-label, randomized clinical trial in Israel, including patients infected with COVID-19. Patients were randomized in a 1:1 ratio to receive either inhalations of 150 ppm NO given intermittently for 40 minutes four times per day for up to seven days in addition to standard supportive treatment (“NO+SST”) or standard supportive treatment alone (“SST”). Endpoints related to safety (primary endpoint), oxygen saturation and ICU admission, among others, were assessed.
We presented results from the pilot clinical trial at the 32nd European Congress of Clinical Microbiology & Infectious Diseases (ECCMID 2022), which took place from April 23, 2022 through April 26, 2022 as a hybrid event both onsite in Lisbon, Portugal and online. At the time of the data cut off, the trial enrolled a total of 40 patients hospitalized for VCAP (SARS-CoV-2, n=39; other viruses n=1). The intent-to-treat population included 35 patients with 16 patients in the inhaled NO group and 19 patients in the control group. The primary COVID-19 treatments used during the clinical trial were Remdesivir (>30%) and Dexamethasone (>65%). Safety data from the clinical trial show that inhaled NO treatment was well tolerated overall with no treatment related adverse events as assessed by the investigators. There were two serious adverse events (“SAEs”) reported in the group receiving inhaled NO along with SST, which were determined to be related to underlying conditions and unrelated to clinical trial drug/device. From an efficacy perspective, results show a trend of shortening length of stay (“LOS”) by a factor 1.8 in favor of inhaled NO treatment. Duration of oxygen support, measured in-hospital and at home, was significantly shorter (p=0.0339) for inhaled NO treated patients. Patients with unstable oxygen saturation during hospitalization, 66.7% of the inhaled NO treatment group, reached stable saturation of ≥93% during hospital stay as compared to 26.7% in the SST group.
Following completion of the clinical trial and the 180-day follow-up period, incremental data were provided in a poster presentation at IDWeek 2022. In addition to the positive clinical results provided at ECCMID 2022, the poster showed a larger decline in c-reactive protein (“CRP”) from baseline for patients treated with NO + SST compared to the control group. Analysis of the data provides compelling evidence that high concentration NO delivery with the LungFit® PRO generator and delivery system can be a powerful tool against any type of pneumonia, especially COVID-19. The Company commenced a clinical trial in the second half of calendar 2023 in the United States and made the decision to pause this study pending future funding.
Bronchiolitis (BRO)
Bronchiolitis is the leading cause of hospital admission in children less than 1 year of age. The incidence is estimated to be 150 million new cases a year worldwide, with 2-3% (over 3 million) of them severe enough to require hospitalization. Worldwide, 95% of all cases occur in developing countries. In the U.S., there are approximately 120,000 annual bronchiolitis hospitalizations and approximately 3.2 million annual child hospitalizations globally. Currently, there is no approved treatment for bronchiolitis. The treatment for acute viral lung infections that cause bronchiolitis in infants is largely supportive care and is based primarily on prolonged hospitalization during which the infant receives a constant flow of oxygen to treat hypoxemia, a reduced concentration of oxygen in the blood. In addition, systemic steroids and inhalation with bronchodilators are sometimes utilized until recovery, but we believe that these treatments do not successfully reduce hospital LOS. We believe the U.S. market potential for bronchiolitis to be greater than $500 million and worldwide market potential to be greater than $1.2 billion.
The pivotal clinical trial for bronchiolitis was originally set to be performed in the winter of 2020/21 but was delayed due to the COVID-19 pandemic. We have completed three successful pilot studies for bronchiolitis. A further analysis of the three previously reported pilot studies was presented at the ATS International Conference 2021. Analysis across the studies (n=198 infants, mean age 3.9 months) showed that 150 ppm – 160 ppm NO administered intermittently was generally safe and well tolerated with adverse event rates similar among treatment groups with no reported treatment-related serious adverse events. The short course of treatments with intermittent high concentration inhaled NO was effective in shortening hospital LOS and accelerating time to fit for discharge – a composite endpoint of clinical signs and symptoms to indicate readiness to be evaluated for hospital discharge. This treatment was also effective in accelerating time to stable oxygen saturation – measured as SpO2 ≥ 92% in room air. Additionally, NO at a dose of 85 ppm NO showed no difference compared to control for all efficacy endpoints, while 150 ppm NO showed statistical significance when compared to control.
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Additionally, long-term safety data for high concentration inhaled NO in bronchiolitis was presented at the Pediatric Academic Societies Meeting 2022 (PAS 22). A total of 101 infants from the three prior pilot studies for bronchiolitis (n=198) participated in the long-term follow-up clinical trial. Clinical trial endpoints for the long-term safety clinical trial included percentage of patients re-hospitalized for bronchiolitis related reasons, such reasons included wheezing episodes, pneumonia, and asthma and the percentage of patients re-hospitalized for any reason. Data from the clinical trial showed the re-hospitalization rate per 100 Patient Exposure Years (PEY) due to bronchiolitis related reasons trended favorably for the inhaled NO group. In addition, the long-term patient re-hospitalization rate for any reason was similar between inhaled NO and control groups. As such, the clinical trial concluded that the treatment of hospitalized infants with acute bronchiolitis by intermittent high dose inhaled NO shows a favorable long-term safety profile.
We believe that the entirety of data at 150 ppm – 160 ppm NO in both adult and infant patient populations supports further development of LungFit® PRO in a pivotal clinical trial for patients hospitalized with VCAP or bronchiolitis.
LungFit® GO for the treatment of Nontuberculous mycobacteria (NTM)
NTM lung infection is a rare and serious pulmonary disease associated with increased morbidity and mortality. Patients with NTM lung disease may experience a multitude of symptoms such as fever, weight loss, cough, lack of appetite, night sweats, blood in the sputum and fatigue. Patients with NTM lung disease, specifically Mycobacterium abscessus (M. abscessus) representing 20% to 25% of all NTM and other forms of NTM that are refractory to antibiotic therapy, frequently require lengthy and repeated hospital stays to manage their condition. There are no treatments specifically indicated for the treatment of M. Abscessus lung disease in North America, Europe or Japan.
There are approximately 50,000 to 90,000 people with NTM infections in the U.S. In Asia, the number of patients suffering from NTM surpasses what is seen in the U.S. There is one inhaled antibiotic approved for the treatment of refractory Mycobacterium avium complex (“MAC”). Current guideline-based approaches to treat NTM lung disease involve multi-drug regimens of antibiotics that may cause severe, long lasting side effects, and treatment can be longer than 18 months. Median survival for NTM MAC patients is approximately 13 years while median survival for patients with other variations of NTM is typically 4.6 years. The prevalence of human disease attributable to NTM has increased over the past two decades. In a clinical trial conducted between 2007 and 2016, researchers found that the prevalence of NTM in the U.S. is increasing at approximately 7.5% per year. M. abscessus treatment costs are estimated to be more than double that of MAC. A 2015 publication by co-authors from several U.S. government departments stated that cases in 2014 alone cost the U.S. healthcare system approximately $1.7 billion. For this indication, we believe U.S. sales potential to be greater than $1 billion and worldwide sales potential to be greater than $2.5 billion.
In December 2020 we began a 12-week, multi-center, open-label clinical trial in Australia intended to enroll approximately 20 adult patients with chronic refractory NTM lung disease. We received a grant of up to $2.17 million from the Cystic Fibrosis Foundation (“CFF”) to fund this clinical trial and advance the clinical development of inhaled NO to treat NTM pulmonary disease. The trial enrolled both cystic fibrosis (“CF”) and non-CF patients infected with MAC, M. abscessus or any strain of NTM. The clinical trial consisted of a run-in period followed by two treatment phases. The run-in period provided a baseline for the efficacy endpoints. The first treatment phase took place over a two-week period and began in the hospital setting where patients were titrated from 150 ppm NO up to 250 ppm NO over several days. During this phase patients received NO for 40 minutes, four times per day while Methemoglobin (“MetHb”) levels were monitored. Patients were also trained to use LungFit® GO and subsequently discharged to complete the remaining portion of the two-week treatment period at their home at the highest tolerated NO concentration. For the second treatment phase, a 10-week maintenance phase, the administration was twice daily. The clinical trial evaluated safety, quality of life, physical function, and bacterial load among other parameters.
At the American Thoracic Society International Conference 2022 (ATS 2022), we presented positive interim data from the ongoing clinical trial. At the time of data cutoff on April 4, 2022, a total of 15 patients were enrolled in the pilot clinical trial. The mean age of patients was 62.1 years (range: 22 – 82 years) with the majority female (80%), a distribution consistent with real-world NTM disease. All 15 patients were successfully titrated to 250 ppm NO in the hospital setting, and no patients required dose reductions during the subsequent at-home portion of the clinical trial. Patients were followed up for 12 weeks after the 12-week treatment period was completed.
After completion of the clinical trial, we presented positive results at the 2022 American College of Chest Physicians (“CHEST”) annual meeting, further supporting development of intermittent high dose NO for the treatment of NTM. The clinical trial demonstrated that high dose NO treatment was well-tolerated in both the home and hospital settings. During the 10-week at-home treatment period of the clinical trial, a total of 2,492 inhalations were self-administered with overall high treatment compliance (>90%). There were no SAEs related to treatment discontinuations reported over the 12-week treatment or 12-week follow up periods. Key efficacy endpoints showed strong results with improvement seen in the majority of quality-of-life domains. Respiratory function and physical function were maintained during treatment and follow-up. Trends in the reduction of microbial load were observed and one patient achieved culture conversion with three consecutive negative sputum samples. We anticipate having discussions with the FDA in calendar 2026 to identify a path forward.
Our program in COPD is in the preclinical stage and will move forward subject to obtaining additional financing.
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Ultra-High Concentration NO (UNO) in solid tumors through majority-owned affiliate Beyond Cancer, Ltd.
In the fourth calendar quarter of 2021, Beyond Cancer, our majority-owned affiliate, raised $30.0 million in a private placement of common shares. The investors purchased a 20% equity ownership in Beyond Cancer, while Beyond Air maintained 80% equity ownership. The funding is being used to accelerate ongoing preclinical work, including the completion of IND-enabling studies, completion of a Phase 1 human clinical trial, expansion of preclinical programs for combination studies, hiring of additional Beyond Cancer team members, and optimization of the delivery system, as well as for general corporate purposes.
Beyond Cancer will benefit from Beyond Air’s NO expertise, IP portfolio, preclinical oncology team, and regulatory progress, and will pay Beyond Air a single-digit royalty on all future revenues. Beyond Cancer is being led by a seasoned leadership team with experience in emerging healthcare companies and clinical oncology.
UNO has shown anticancer properties in preclinical trials by eliciting an immune response from the host. We have released preclinical data at several medical/scientific conferences showing the promise of delivering NO directly to tumors at concentrations of 20,000 ppm – 200,000 ppm. Results showed that local tumor ablation with NO conveyed anti-tumor immunity to the host. In April 2022, we presented in vivo and in vitro preclinical data at the American Association for Cancer Research (“AACR”) 2022 annual meeting. The in vivo study assessed the mode of action following a single 5-minute gaseous NO (“gNO”) treatment which provided data showing an effect on the primary tumor 14 days post-treatment. These data showed that intratumoral injections of concentrations of gNO at 20,000 and 50,000 ppm led to increased recruitment of T cells, B cells, macrophages, and dendrocytes to the primary tumor. An elevated number of T cells and B cells were also detected in the spleen and blood 21 days following gNO treatment. In addition, at the same time point, a marked reduction in the number of myeloid-derived suppressor cells was observed in the spleen. Results from the in vitro study showed that exposure of six different cancer cell lines – including human ovarian and pancreatic and mouse lung, melanoma, colon, and breast – to UNO ranging from 10,000 ppm to 100,000 ppm for up to 10 minutes resulted in a dose-dependent cytotoxic response. The higher concentration doses of gNO led to near-instant cell death, while the lower concentration doses required a longer exposure period to elicit cell death. Cell viability was assessed using two assays: XTT and clonogenic assay. After one minute of exposure to 25,000 ppm gNO, less than 10% viability was observed in all cell lines.
The second half of calendar year 2022 was a time of significant progress for Beyond Cancer. On August 23, 2022, we announced that the first patient was treated in a first-in-human Phase 1 clinical trial to assess the safety and immune biomarkers of UNO therapy. In November, at the annual meeting of the Society for Immunotherapy of Cancer (“SITC”), we presented new in vivo combination data that support the potential of our novel UNO therapy to treat various types of solid tumors in combination with immune checkpoint inhibitor (“ICI”) therapies, including anti-PD-1. The data presented at SITC appears to indicate that UNO in combination with anti-PD-1 treatment may lead to higher tumor regression rates and prolonged survival. On December 13, 2022, we announced the publication of preclinical data in the peer-reviewed journal Cancer Cell International (CCI), which showed that our proprietary tumor ablation technology utilizing UNO induced a potent innate and adaptive immune response that prevented metastases and resulted in a statistically significant survival benefit.
In April 2023, Beyond Cancer presented additional preclinical data for UNO therapy in solid tumors during the AACR 2023 annual meeting. Data showed a statistically significant survival benefit for repeat dosing of UNO compared to anti-mCTLA-4 as monotherapy and repeat doses of UNO prolonged survival in combination with anti-PD-1 compared to gNO alone. With regard to tumor volume, statistically significant reductions were observed with repeat dosing of UNO versus anti-mPD-1 as a monotherapy and in combination with anti-CTLA-4 versus anti-CTLA-4 alone. Additionally, the data shows that short exposures between 10 seconds to one minute of tumor cells to UNO at increasing concentrations of 25,000 ppm to 100,000 ppm NO significantly upregulate mPD-L1 expression in a dose and time-dependent manner. Also, in vivo experiments exhibited a statistically significant day 1 increase in M1 macrophages, decrease in Tregs, and reduction in tumor cell viability was directionally maintained through day 5. We believe that together with the known ability of NO to activate and recruit the immune system, the data presented at this year’s AACR annual meeting appears to indicate that repeat dosing of UNO is feasible and may be effective even in difficult-to-treat, non-immunogenic tumor types.
In October 2023, Beyond Cancer presented positive pre-clinical data at the EORTC International Conference on Molecular Targets and Cancer Therapeutics, demonstrating a statistically significant survival benefit in mice treated with UNO plus anti-PD1 versus anti-PD1 alone. This was a pooled analysis of multiple studies done with 50,000 or 100,000 ppm NO for a single administration of 5 or 10 minutes. Additionally, Beyond Cancer’s second manuscript was published in the Cells Journal in an article titled “Intratumoral Administration of High-Concentration Nitric Oxide and Anti-mPD-1 Treatment Improves Tumor Regression Rates and Survival in CT26 Tumor-Bearing Mice.”
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In late December 2023, the Company’s safety review committee completed its review of the first 6 human subjects treated with UNO and reported that there were no dose limiting toxicities at the 25,000 ppm NO concentration and the study may progress to the next concentration of 50,000 ppm NO.
In June 2024 at the American Society of Clinical Oncology (ASCO), the Company presented single agent treatment in relapsed or refractory unresectable, primary or metastatic cutaneous and subcutaneous malignancies at UNO doses of 25,000 and 50,000 parts per million. The immune biomarker data at Day 21, following a single 5-minute dose of UNO 50,000 ppm, demonstrated increases in dendritic cells, cytotoxic T-cells, central memory T-cells and a favorable increase in the M1/M2 ratio. Myeloid Derived Suppressor Cells (MDSCs) also showed a 54% decrease. In the 25,000 ppm cohort, the same stimulatory immune biomarkers were upregulated. UNO was generally well tolerated with primarily Grade 1 related toxicities. One Grade 3 adverse event was deemed a dose limiting toxicity in the 50,000 ppm cohort resulting in the expansion of the cohort to six total subjects.
The Company also reported a case of relapsed/refractory Triple Negative Breast Cancer (TNBC) in which the subject showed no evidence of malignancy in a satellite lesion 21 days following UNO treatment and a corollary, rapid and durable clinical resolution of radiation-induced dermatitis.
The phase 1a study, between August 2022 and November 2024, enrolled a total of 10 patients treated with either 25,000 ppm or 50,000 ppm NO for a single intra-tumoral administration over 5 minutes. All subjects had significant advanced stage metastatic disease. The mean number of treatments prior to entering the study was 10.3 (min 4, max 18), with 5.5 being medication treatments (min 2, max 14). Tumors were a mix of squamous cell carcinoma, melanoma, breast and triple negative breast. At the time of treatment, life expectancy for all patients was less than 12 months, with some as low as 3 months. The majority of patients are still alive as of October 1, 2025.
A Phase 1b trial protocol was approved by the Israeli Ministry of Health (IMOH) in December 2024. This trial will enroll up to 15 subjects with prior exposure to anti-PD-1 antibody that have either progressed, not achieved a response, or have prolonged stable disease (12 weeks) on single agent anti-PD-1 without radiographic evidence of continued tumor reduction. Subjects enrolled in the Phase 1b trial will be treated with the UNO + anti-PD-1 combination. Both safety and efficacy will be evaluated. Timing of the initiation of the study is under review.
Selective neuronal nitric oxide synthase (nNOS) inhibitor for the treatment of neurological conditions in collaboration with Hebrew University of Jerusalem
On June 15, 2023, we announced that we had entered into an agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. (the “University”) to acquire the commercial rights for neuronal nitric oxide synthase (nNOS) inhibitors being developed for the treatment of autism spectrum disorder (“ASD”) and other neurological conditions. Currently, there are no FDA-approved therapies utilizing nNOS inhibitors specifically for the treatment of ASD. Under the terms of the agreement, Beyond Air shall pay to the University compensation for pre-clinical work over the two-year period from the date of the agreement. Also, we will pay a low single-digit royalty on net sales and certain one-time payments based on clinical, regulatory and sales milestones.
In the first calendar quarter of 2025, NeuroNos, our majority-owned affiliate, raised $2.0 million in a private placement of common shares. An additional $0.5 million and $0.2 million was raised in the private placement offering during the third and fourth calendar quarter of 2025, respectively. In total, the investors purchased a 15.25% equity ownership in NeuroNos, while Beyond Air maintained 84.75% equity ownership. The private placement is closed to investment at this time. The funding is being used to accelerate ongoing preclinical work, including IND-enabling studies as well as for general corporate purposes.
Critical Accounting Estimates
A summary of our critical accounting estimates is discussed in the section entitled “Critical Accounting Estimates” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K. There were no material changes to our critical accounting estimates for the nine months ended December 31, 2025.
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Results of Operations and Comprehensive Loss
Below are the results of operations for the three and nine months ended December 31, 2025 and December 31, 2024:
(in thousands, except share data)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | 2,194 | $ | 1,072 | $ | 5,772 | $ | 2,553 | ||||||||
| Cost of revenues | 1,894 | 1,287 | 5,614 | 4,184 | ||||||||||||
| Gross loss | 300 | (215 | ) | 158 | (1,631 | ) | ||||||||||
| Research and development | 2,429 | 3,005 | 7,965 | 13,599 | ||||||||||||
| Selling, general and administrative | 4,467 | 7,732 | 14,067 | 22,133 | ||||||||||||
| Total operating expenses | 6,896 | 10,737 | 22,032 | 35,732 | ||||||||||||
| Loss from operations | (6,596 | ) | (10,952 | ) | (21,874 | ) | (37,363 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Dividend/investment income | 102 | 126 | 189 | 637 | ||||||||||||
| Interest and finance expense | (1,088 | ) | (549 | ) | (2,275 | ) | (2,439 | ) | ||||||||
| Change in fair value of warrant liability | 20 | 4 | 36 | 219 | ||||||||||||
| Change in fair value of derivative liability | 483 | - | 483 | 1,314 | ||||||||||||
| Foreign exchange gain/(loss) | (30 | ) | 46 | (89 | ) | (26 | ) | |||||||||
| Loss on disposal of fixed assets | (359 | ) | (62 | ) | (416 | ) | (233 | ) | ||||||||
| Loss on extinguishment of debt | - | (1,910 | ) | - | (2,534 | ) | ||||||||||
| Other income/(expense) | (162 | ) | (37 | ) | (20 | ) | 11 | |||||||||
| Total other income/(expense) | (1,034 | ) | (2,381 | ) | (2,092 | ) | (3,052 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss | $ | (7,630 | ) | $ | (13,333 | ) | $ | (23,966 | ) | $ | (40,416 | ) | ||||
| Less: net loss attributable to non-controlling interests | (294 | ) | (300 | ) | (999 | ) | (1,825 | ) | ||||||||
| Net loss attributable to Beyond Air, Inc. | (7,336 | ) | (13,032 | ) | (22,967 | ) | (38,591 | ) | ||||||||
| Foreign currency translation adjustment | 25 | (61 | ) | 170 | (37 | ) | ||||||||||
| Comprehensive loss attributable to Beyond Air, Inc. | $ | (7,311 | ) | $ | (13,093 | ) | $ | (22,797 | ) | $ | (38,628 | ) | ||||
| Net basic and diluted loss per share of common stock attributable to Beyond Air, Inc. | $ | (0.85 | ) | $ | (2.96 | ) | $ | (3.44 | ) | $ | (12.77 | ) | ||||
| Weighted average number of shares, outstanding, basic and diluted | 8,616,860 | 4,403,726 | 6,668,782 | 3,020,861 | ||||||||||||
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Comparison of Three and Nine Months Ended December 31, 2025 with the Three and Nine Months Ended December 31, 2024
Revenues and Cost of Revenues
Revenue was $2.2 million and $1.1 million for the three months ended December 31, 2025 and December 31, 2024, respectively. Cost of revenue of $1.9 million and gross profit of $0.3 million were recognized for the three months ended December 31, 2025, compared to a cost of revenue of $1.3 million and gross losses of $0.2 million for the three months ended December 31, 2024.
Revenue was $5.8 million and $2.6 million for the nine months ended December 31, 2025 and December 31, 2024, respectively. Cost of revenue of $5.6 million and gross profit of $0.2 million were recognized for the nine months ended December 31, 2025, compared to a cost of revenue of $4.2 million and gross losses of $1.6 million for the nine months ended December 31, 2024.
Revenues continue to expand as we continue to sign new hospital contracts and begin selling into international markets. The increase in gross profit is primarily associated with sales growth, partially offset by one-time costs required to upgrade our existing fleet of devices and provisions for excess inventory.
Research and Development Expenses
Research and development expenses for the three months ended December 31, 2025 were $2.4 million as compared to $3.0 million for the three months ended December 31, 2024. The decrease of $0.6 million was primarily attributed to decreases in salaries of $0.4 million ($0.2 million in Beyond Air and $0.3 million in Beyond Cancer, partially offset by increase of $0.1 million in NeuroNos), and a reduction in Gen II device development costs of $1.1 million, partially offset by increased stock-based compensation costs $1.2 million ($1.6 million in Beyond Cancer partially offset by decrease of $0.4 million in Beyond Air).
Research and development expenses for the nine months ended December 31, 2025 were $8.0 million as compared to $13.6 million for the nine months ended December 31, 2024. The decrease of $5.6 million was attributed primarily to decreases in salaries of $2.4 million ($1.0 million in Beyond Air and $1.5 million in Beyond Cancer, offset by increase of $0.1 million in NeuroNos), pre-clinical expenses $0.7 million ($0.3 million in Beyond Cancer and $0.4 million in NeuroNos), professional fees $0.5 million ($0.4 million in Beyond Air and $0.3 million in Beyond Cancer, partially offset by increase of $0.2 million in NeuroNos), and a reduction in Gen II device development costs of $2.3 million, partially offset by increased stock-based compensation costs $0.7 million ($1.4 million in Beyond Cancer partially offset by decrease of $0.7 million in Beyond Air)
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended December 31, 2025 were $4.5 million as compared to $7.7 million for the three months ended December 31, 2024. The decrease of $3.3 million was attributed primarily to decreases in salaries $0.6 million ($0.4 million in Beyond Air and $0.2 million in Beyond Cancer), stock-based compensation costs $2.1 million ($1.5 million in Beyond Air and $0.7 million in Beyond Cancer), professional fees $0.2 million, and legal fees $0.2 million, partially offset by an increase of $0.1 million in royalties.
Selling, general and administrative expenses for the nine months ended December 31, 2025 were $14.1 million as compared to $22.1 million for the nine months ended December 31, 2024. The decrease of $8.0 million was attributed primarily to decreases in salaries $2.0 million ($1.5 million in Beyond Air and $0.5 million in Beyond Cancer), stock-based compensation costs $4.9 million ($2.8 million in Beyond Air and $2.2 million in Beyond Cancer, partially offset by increase of $0.1 million in NeuroNos), $0.6 million of legal fees, $0.3 million travel expenses, and $0.2 million of facility expenses, partially offset by an increase of $0.3 million in royalties.
Other Income/Expense
Other expense for the three months ended December 31, 2025 were $1.0 million as compared to other expense of $2.4 million for the three months ended December 31, 2024. The decrease in expense of $1.4 million was attributed primarily to the prior period loss associated with the partial extinguishment of debt of $1.9 million. The derivative liability on the Note was remeasured resulting in a gain of $0.5 million, while there was no fair value measurement of such instrument that occurred during the prior period. The reduction in expenses were partially offset by increase in interest expense of $0.6 million due to the Company’s current debt facilities compared to the debt outstanding in the comparative period. Additionally, the Company recognized $0.3 million more loss on disposal of fixed assets compared to the prior period.
Other expense for the nine months ended December 31, 2025 were $2.1 million as compared to other expense of $3.1 million for the nine months ended December 31, 2024. The decrease in expense of $1.2 million was attributed primarily to the prior period loss associated with the extinguishment of debt of $2.5 million. This was partially offset by the change in fair value of the prior year derivative liability of $1.3 million gain compared to the gain of $0.5 million associated with the remeasurement of the Note derivative liability that occurred during the current period.
Net Loss Attributable to Non-controlling Interests
Net loss attributed to non-controlling interests for the three months ended December 31, 2025, was $0.3 million, compared to $0.3 million for the three months ended December 31, 2024. Net loss attributed to non-controlling interests for the nine months ended December 31, 2025, was $1.0 million, compared to $1.8 million for the nine months ended December 31, 2024. Non-controlling interests represent 20% of the net loss of our Beyond Cancer subsidiary and the applicable ownership structure during each quarterly reporting period of the net loss of our NeuroNos subsidiary.
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Net Loss Attributed to Common Stockholders
Net loss attributed to common stockholders of Beyond Air, Inc for the three months ended December 31, 2025, was $7.3 million or a loss of $0.85 per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the three months ended December 31, 2024 was $13.0 million or a loss of $2.96 per share, basic and diluted.
Net loss attributed to common stockholders of Beyond Air, Inc for the nine months ended December 31, 2025, was $23.0 million or a loss of $3.44 per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the nine months ended December 31, 2024 was $38.6 million or a loss of $12.77 per share, basic and diluted.
Liquidity and Capital Resources
Cash Flows
Below is a summary of our cash flows activities for the nine months ended December 31, 2025 and December 31, 2024:
| Nine Months Ended | ||||||||
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | (13,198 | ) | $ | (31,261 | ) | ||
| Investing activities | (3,227 | ) | 12,324 | |||||
| Financing activities | 24,189 | 12,146 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 170 | 16 | ||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 7,934 | $ | (6,776 | ) | |||
Operating Activities
For the nine months ended December 31, 2025 the net cash used in operating activities was $13.2 million which was primarily due to our net loss of $23.9 million, which includes $4.9 million of stock-based compensation, $2.4 million of depreciation and amortization, and $1.3 million of paid in kind interest associated with the Loan Agreement, $0.5 million provision for inventory losses, and $0.4 million loss on disposal of fixed assets, in addition to $0.9 million in prepayments and other assets.
For the nine months ended December 31, 2024, the net cash used in operating activities was $31.2 million which was primarily due to our net loss of $40.4 million, which includes $9.0 million of stock-based compensation, $2.5 million costs related to the extinguishment of the Loan and Security agreement with Avenue Capital Management II, L.P., as administrative agent and collateral agent, Avenue Venture Opportunities Fund, L.P. and Avenue Venture Opportunities Fund II, L.P. $2.2 million of depreciation and amortization, $1.6 million in prepayments and other assets, $0.9 million in amortization of debt discount, offset by $ 4.5 million of accrued expenses (which included ($4.5) million of the payment of the final tranche with Circassia Limited and its affiliates and ($2.9) million for the Hudson settlement and ($7.6) million attributable to the resolution of Empery Asset Master, Ltd. Et AL, vs AIT Therapeutics Inc.), and $1.6 million change in the fair value of the warrant and derivative liabilities.
Investing Activities
For the nine months ended December 31, 2025, net cash used in investing activities was $3.2 million which was mainly attributable to a net purchase of investments in marketable securities of $2.7 million and invested $0.5 million for the purchase of property and equipment, mainly LungFit PH devices.
For the nine months ended December 31, 2024, net cash provided by investing activities was $12.3 million which was mainly attributable to a net redemption of investments in marketable securities of $16.7 million and invested $4.4 million for the purchase of property and equipment, mainly LungFit PH devices.
Financing Activities
Net cash provided by financing activities for the nine months ended December 31, 2025 was $24.2 million, mainly from the issuance of common stock in connection with the At-The-Market Offering Sales Agreement with BTIG, Inc (the “2025 ATM”) of $8.1 million in addition to $3.0 million from the issuance of common stock in connection with the warrant inducement and issuance of additional warrants. Additionally, the Company received $2.0 million of Additional Loans from a related party, a director of the Company who is also an existing lender under its Loan Agreement. Further, the Company entered into the Note Purchase Agreement with Streeterville, which provided for the issuance of the Note in the principal amount of $12.0 million, partially offset by $1.0 million of fees paid at closing.
Net cash provided by financing activities for the nine months ended December 31, 2024 was $12.1 million, mainly from the issuance of securities through securities purchase agreements which the net proceeds were $18.8 million, $11.3 million payment received on the loan agreement, and the issuance of common stock in connection with the At-The-Market Offering Sales Agreement with Truist Securities, Inc (the “2022 ATM”) of $0.6 million partially offset by $18.7 million from the payment of short-term loans, including a $17.5 million repayment to Avenue Capital.
Future Funding Requirements
We have generated revenue of $10.7 million from the sale of products to date. We had an operating cash flow decrease of $13.2 million for the nine months ended December 31, 2025 and we have experienced an accumulated loss of $309.3 million since inception through December 31, 2025. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $11.7 million and $6.2 million in restricted cash.
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We expect to incur net losses and have net cash outflows for at least the next twelve months. Management believes these factors raise substantial doubt about the Company’s ability to meet its obligations with cash on hand and concluded that the Company will require additional funding within one year from the date these financial statements are issued.
Management is confident that the efforts to arrange financing as described below, while not assured, will enable them to meet the Company’s obligations.
The Company’s future capital needs and the adequacy of its available funds will depend on many factors, including, but not necessarily limited to, the success and costs of commercialization of the Company’s approved product and the actual cost and time necessary for current and anticipated preclinical studies, clinical trials and other actions needed to obtain certification or regulatory approval of the Company’s product candidates.
On November 1, 2024, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) for a secured loan with certain lenders, including its Chief Executive Officer Steven Lisi and director Robert Carey, for an aggregate principal amount of $11.5 million. The Loan Agreement was approved by each of the Company’s independent and disinterested directors, following the receipt of a recommendation from an independent investment bank. The Loan Agreement provides for the following terms: (i) principal amount of $11,500,000; (ii) ten-year term; (iii) interest of 15% per annum, of which 3% shall be payable in cash and 12% payable in kind through June 30, 2026 and thereafter all in cash; (iv) a royalty interest of 8% of the Company’s net sales on a quarterly basis from July 2026 until the facility is repaid in full; (v) the Company’s obligations will be secured by substantially all of the Company’s assets and (vi) the Company issued the lenders warrants to purchase shares of the Company’s common stock at an exercise price, adjusted for the 2025 Reverse Stock Split, of $7.586 per share.
On June 2, 2025, the Company received $2.0 million of advanced financing from a director that is also an existing lender under its Loan Agreement. On November 3, 2025, the Company amended and restated the original Loan Agreement (as amended, the “Amended Loan Agreement”) to provide for and finalize the terms of the $2.0 million Additional Loans and the issuance of new five-year warrants to purchase up to 512,821 shares of the Company’s common stock (the “Supplemental Warrants”) with an exercise price of $1.95 per share and subject to the same terms and conditions applicable to the existing warrants issued under the original Loan Agreement (the “2024 Debt Warrants”). Concurrently, the parties entered into a waiver agreement pursuant to which the Lender consented to the Company’s issuance of the Note in exchange for reducing the exercise price of the 2024 Debt Warrants from $7.59 per share to $1.95 per share.
On February 10, 2025, we entered into the At-The Market Offering Sales Agreement with BTIG, Inc. (the “2025 ATM”). Under the 2025 ATM, we may sell shares of our common stock having aggregate sales proceeds of up to $35.0 million, from time to time and at various prices. Pursuant to the “baby shelf rules” promulgated by the SEC, if our public float is less than $75.0 million as of specified measurement periods, the number of shares of common stock that may be offered and sold by us under a Form S-3 registration statement, including pursuant to the 2025 ATM, in any twelve-month period is limited to an aggregate amount that does not exceed one-third of our public float. As of December 31, 2025, due to the SEC’s “baby shelf rules,” we are permitted to sell up to $0 million of shares of common stock pursuant to the 2025 ATM. We will remain subject to the “baby shelf rules” under the Form S-3 registration statement until such time as our public float exceeds $75.0 million. If shares of our common stock are sold, there is a 2.5% fee paid to the sales agent.
On September 8, 2025, we entered into an inducement offer letter agreement (“Inducement Letter”) with certain holders of our existing common stock purchase warrants (“Existing Warrants”). Pursuant to the Inducement Letter, such holders immediately exercised some or all of their respective outstanding Existing Warrants to purchase up to an aggregate of 1,439,128 shares of common stock at a reduced exercise price of $2.21. The proceeds to the Company from the exercise of the Existing Warrants were approximately $2.9 million, net of placement agent fees and other offering expenses of $0.2 million and $0.1 million, respectively. In consideration of the inducement offer, the Company issued new common stock warrants to purchase up to 719,562 shares of common stock for a purchase price of $0.125 per share of common stock underlying the new warrant. The new warrants have an exercise price of $2.21 per share and are immediately exercisable, with a term of five years from the issuance date.
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On November 4, 2025, the Company entered into and closed on a note purchase agreement (the “Note Purchase Agreement”) with Streeterville Capital LLC (“Streeterville” or “Investor”), which provided for the issuance of a secured promissory note in the principal amount of $12.0 million (the “Note”). The principal amount of the Note is due 24 months following the date of issuance. Interest will accrue at the rate of 15% per annum, with no interest accruing for the first 12 months following issuance; provided however, that Streeterville is guaranteed 12 months of interest, of $1.8 million even if the Note is redeemed or prepaid prior to the maturity date. Of the total $12.0 million Note, $6.0 million will be placed in a restricted account and will be accessible by the Company as the first $6.0 million is repaid.
Also on November 4, 2025, the Company entered into an equity purchase agreement (the “Purchase Agreement”) with Streeterville for the purchase of up to $20.0 million of the Company’s shares of common stock. In connection with the Purchase Agreement, the Company and Streeterville entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file with the Securities and Exchange Commission a registration statement (the “Registration Statement”) covering the resale of the shares by November 24, 2025. Pursuant to the Purchase Agreement, upon effectiveness of the Registration Statement and so long as there is no balance outstanding on the Note, the Company shall have the right, but not the obligation, to direct Streeterville, by its delivery to Streeterville of a put notice from time to time during a period of up to two years, to purchase newly issued shares of the Company’s common stock, subject to customary limitations.
On January 14, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an institutional investor. Pursuant to the Purchase Agreement, the Company sold to the investor, and the investor purchased from the Company, in a private placement offering, an aggregate of (i) 524,990 shares (the “Shares”) of the Company’s common stock, at a purchase price of $1.272 per Share, (ii) pre-funded warrants to purchase up to 3,405,828 shares of Common Stock (the “Pre-funded Warrants”) at a purchase price of $1.2719 per Pre-funded Warrant and (iii) warrants to purchase up to 3,930,818 shares of Common Stock (the “Common Warrants”, and together with the Pre-funded Warrants the “Warrants”), for aggregate gross proceeds under the Purchase Agreement of $5,000,000. The Pre-funded Warrants have an exercise price of $0.0001 per share, and the Common Warrants have an exercise price of $1.147 per share. The offering closed on January 16, 2026, on satisfaction of customary closing conditions.
With respect to Beyond Cancer, discussions with investors continue in parallel to the advancement to a phase 1b combination study of UNO with anti-PD1 therapy.
The recent $2.7 million funding for NeuroNOS is closed at this time.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue operating as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.
Our future capital needs and the adequacy of our available funds will depend on many factors, including, but not necessarily limited to, the cost and time necessary for the development, preclinical studies, clinical trials and certification or regulatory approval of our other medical devices, indications as well as the commercial success of our approved product and any product candidates that receive marketing approval by the FDA. We may be required to raise additional funds through sale of equity or debt securities or through strategic collaborations and/or licensing agreements in order to fund operations until we are able to generate enough product or royalty revenues, if any. Financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could have a material adverse effect on our strategic objectives, results of operations and financial condition.
Our ability to continue to operate beyond the fourth fiscal quarter of 2027 will be largely dependent upon the successful commercial launch of LungFit® PH, obtaining partners in other parts of the world, the timing of the FDA approval for LungFit PH 2 and possibly raising additional funds to finance our activities until we are generating cash flow from operations. Further, there are no assurances that we will be successful in obtaining an adequate level of financing for the development and commercialization of our other product candidates.
There are numerous risks and uncertainties associated with the development of our NO delivery system and we are unable to estimate the amounts of increased capital outlays and operating expenses associated with the completion of the research and development of our product candidates.
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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 costs of commercializing the LungFit® system; |
| ● | the scope, prioritization and number of our clinical trials and other research and development programs; |
| ● | the costs and timing of obtaining certification or 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. |
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 carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.
Changes in Internal Control Over Financial Reporting
During the three months ended December 31, 2025, there were no changes made to our internal control over financial reporting that materially affected, or that are reasonably likely to materially affect our internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in Part I, “Item 1A. Risk Factors” of our 2025 Annual Report on Form 10-K except as set forth below.
The proposed transaction involving NeuroNOS Ltd. may not be consummated, which could materially and adversely affect our business, financial condition, and the value of our securities.
We have entered into a binding letter of intent with XTL Biopharmaceuticals Ltd. relating to the proposed acquisition of NeuroNOS Ltd. Completion of the proposed transaction is subject to a number of conditions, including the negotiation and execution of definitive agreements and satisfaction of customary closing conditions and approvals. There can be no assurance that these conditions will be satisfied or that the proposed transaction will be completed on the terms currently contemplated, or at all. If the proposed transaction is delayed or not consummated, we may incur significant costs and expenses, experience diversion of management time and resources, and face uncertainty regarding the future strategic direction of NeuroNOS Ltd. In addition, we may be required to pursue alternative strategic or financing arrangements with respect to NeuroNOS Ltd., which may not be available on favorable terms, if at all.The failure to complete the proposed transaction could adversely affect our business, financial condition, and the market price of our common stock.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
Rule 10b5-1 Trading Arrangement
During
the three months ended December 31, 2025, no director or officer of the Company
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ITEM 6. Exhibits.
* Filed herewith.
** Furnished herewith.
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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.
| BEYOND AIR, INC. | |
| /s/ Steven Lisi | |
| Date: February 13, 2026 | Steven Lisi |
| President and Chief Executive Officer | |
| (Principal Executive Officer) | |
| /s/ Daniel Moorhead | |
| Date: February 13, 2026 | Daniel Moorhead |
| Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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