Beyond Air(XAIR) - 2026 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations ITEM 1. Condensed Consolidated Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Beyond Air, Inc. and its subsidiaries, including the balance sheets, statements of operations and comprehensive loss, statements of changes in stockholders' equity, statements of cash flows, and accompanying notes Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | March 31, 2025 | | :----------------------------------- | :------------ | :------------- | | Cash and cash equivalents | $4,976 | $4,665 | | Marketable securities | $1,487 | $2,252 | | Total current assets | $14,989 | $16,018 | | Total assets | $28,114 | $30,062 | | Total current liabilities | $4,626 | $5,000 | | Long-term debt, net | $9,621 | $9,197 | | Total liabilities | $17,706 | $15,721 | | Total stockholders' equity | $10,408 | $14,341 | - Total assets decreased by $1,948 thousand from March 31, 2025, to June 30, 2025, while total liabilities increased by $1,985 thousand, leading to a decrease in total stockholders' equity[9] - A one-for-twenty reverse stock split was effectuated in July 2025, with all share and per share information retroactively adjusted to reflect this change[9] Condensed Consolidated Statements of Operations and Comprehensive Loss This section details the company's financial performance over specific periods, including revenues, expenses, and net loss Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands, except share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Revenues | $1,760 | $683 | | Cost of revenues | $(1,604) | $(1,016) | | Gross profit/(loss) | $156 | $(332) | | Research and development | $(3,086) | $(6,009) | | Selling, general and administrative | $(4,687) | $(7,239) | | Loss from operations | $(7,617) | $(13,580) | | Net loss | $(8,078) | $(13,055) | | Net loss attributable to Beyond Air, Inc. | $(7,691) | $(12,201) | | Net basic and diluted loss per share | $(1.53) | $(5.32) | | Weighted average number of shares outstanding | 5,014,923 | 2,295,042 | - Revenues increased by 157.7% year-over-year, leading to a shift from a gross loss of $332 thousand in 2024 to a gross profit of $156 thousand in 2025[11] - Operating expenses decreased significantly by $5,474 thousand, contributing to a reduced loss from operations and a lower net loss attributable to Beyond Air, Inc. of $7,691 thousand compared to $12,201 thousand in the prior year[11] Condensed Consolidated Statements of Changes in Stockholders' Equity This section outlines the changes in the company's equity due to net loss, stock issuances, and stock-based compensation over time Condensed Consolidated Statements of Changes in Stockholders' Equity (in thousands) | Metric | Balance as of April 1, 2025 | Issuance of common stock – At The Market equity offering | Stock-based compensation | Net loss | Balance as of June 30, 2025 | | :-------------------------------- | :-------------------------- | :------------------------------------------------------- | :----------------------- | :--------- | :-------------------------- | | Total Stockholders' Equity | $14,341 | $2,441 | $1,577 | $(8,078) | $10,408 | - Total stockholders' equity decreased from $14,341 thousand as of April 1, 2025, to $10,408 thousand as of June 30, 2025, primarily due to the net loss of $8,078 thousand, partially offset by $2,441 thousand from equity offerings and $1,577 thousand from stock-based compensation[14] Condensed Consolidated Statements of Changes in Stockholders' Equity (in thousands) | Metric | Balance as of April 1, 2024 | Issuance of common stock warrants | Stock-based compensation | Net loss | Balance as of June 30, 2024 | | :-------------------------------- | :-------------------------- | :-------------------------------- | :----------------------- | :--------- | :-------------------------- | | Total Stockholders' Equity | $27,186 | $86 | $3,379 | $(13,055) | $17,699 | - For the three months ended June 30, 2024, total stockholders' equity decreased from $27,186 thousand to $17,699 thousand, mainly due to a net loss of $13,055 thousand, partially offset by stock-based compensation of $3,379 thousand[16] Condensed Consolidated Statements of Cash Flows This section presents the cash inflows and outflows from operating, investing, and financing activities, reflecting the company's liquidity Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,526) | $(10,180) | | Net cash provided by investing activities | $576 | $3,114 | | Net cash provided by (used in) financing activities | $4,066 | $(264) | | Effect of exchange rate changes | $127 | $111 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $243 | $(7,218) | - Net cash used in operating activities significantly decreased from $10,180 thousand in 2024 to $4,526 thousand in 2025[18] - Financing activities provided $4,066 thousand in 2025, primarily from common stock issuance and advanced financing, a substantial improvement from $264 thousand cash used in 2024[18] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of the company's accounting policies, financial instrument valuations, commitments, contingencies, and segment information - The notes provide detailed explanations of the company's accounting policies, financial instrument valuations, commitments, contingencies, and segment information, which are integral to understanding the condensed consolidated financial statements[19] NOTE 1 ORGANIZATION AND BUSINESS This note describes the company's core business as a medical device and biopharmaceutical company, its key product platforms, and recent corporate actions - Beyond Air, Inc. is a commercial-stage medical device and biopharmaceutical company developing the LungFit platform for nitric oxide (NO) generation and delivery[20] - The LungFitPH device received U.S. FDA premarket approval in June 2022 and European CE mark approval in November 2024 for treating hypoxic respiratory failure in neonates[20][21] - The company has two additional programs: Beyond Cancer (80% owned) for ultra-high concentration NO (UNO) in solid tumors (Phase 1 clinical trial) and NeuroNOS (88.2% owned) for nNOS inhibitors to treat neurological conditions like autism spectrum disorder (ASD) (preclinical, Phase 1 expected by end of 2026)[22][23][24][25] - A one-for-twenty reverse stock split was effectuated on July 14, 2025, retroactively adjusting all share and per share information in the financial statements[28][29] NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES This note outlines the critical accounting principles and estimates used in preparing the financial statements, along with other risks and uncertainties - The company's financial statements are prepared in accordance with U.S. GAAP for interim financial information and include all necessary adjustments[30] - Beyond Air consolidates its majority-owned affiliates, Beyond Cancer and NeuroNOS, due to its power to direct their activities and right to receive benefits and losses[31] - Management believes there is substantial doubt about the company's ability to meet its obligations with cash on hand and will require additional funding within one year[34] - Revenue from LungFitPH device leases is recognized on a straight-line basis over the lease term, combining lease and non-lease components under a practical expedient[43] - The company relies on third-party suppliers, with two vendors accounting for approximately 89% of materials purchased for the three months ended June 30, 2025[59] NOTE 3 PROPERTY AND EQUIPMENT This note details the composition of the company's property and equipment, including clinical devices and other assets, and related depreciation expenses Property and Equipment (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :----------------------------- | :------------ | :------------- | | Clinical and medical equipment | $1,090 | $1,048 | | Equipment deployable as part of a service offering | $13,383 | $13,511 | | Computer equipment | $951 | $927 | | Furniture and fixtures | $499 | $506 | | Leasehold improvements | $533 | $521 | | Total Property and Equipment, net | $10,188 | $11,013 | - Depreciation and amortization expense for the three months ended June 30, 2025, was $0.8 million, an increase from $0.7 million in the prior year[61] NOTE 4 STOCKHOLDERS' EQUITY This note provides information on the company's equity activities, including ATM offerings, stock-based compensation, and the impact of a reverse stock split - The company has an At-The-Market (ATM) Equity Offering Sales Agreement for up to $35.0 million, but is currently limited to selling up to $5.8 million of common stock due to SEC's 'baby shelf rules'[62][169] - During the three months ended June 30, 2025, the company received net proceeds of $2.4 million from the sale of 564,699 shares of common stock through the 2025 ATM[63] Stock-based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | | Research and development | $300 | $629 | | General and administrative | $1,277 | $2,750 | | Total stock-based compensation expense | $1,577 | $3,379 | - As of June 30, 2025, the company had approximately $4.1 million in unrecognized stock-based compensation expense for stock options and $0.7 million for restricted stock unit awards, expected to be expensed over weighted average remaining service periods of 1.3 to 1.7 years[66][69][72][74] NOTE 5 OTHER CURRENT ASSETS AND PREPAID EXPENSES This note itemizes the components of other current assets and prepaid expenses, highlighting significant deposits for manufacturing materials Other Current Assets and Prepaid Expenses (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :------------ | :------------- | | Research and development | $68 | $108 | | Prepaid insurance | $572 | $817 | | Deposits to secure manufacturing materials | $3,977 | $4,377 | | Other | $156 | $203 | | Total | $5,126 | $5,743 | - Deposits to secure manufacturing materials represent the largest component of other current assets and prepaid expenses, totaling $3,977 thousand as of June 30, 2025[79] NOTE 6 ACCRUED EXPENSES This note details the company's accrued liabilities, including research and development, professional fees, and deferred revenue Accrued Expenses (in thousands) | Category | June 30, 2025 | March 31, 2025 | | :----------------------------- | :------------ | :------------- | | Research and development | $539 | $360 | | Professional fees | $280 | $440 | | Employee salaries and benefits | $743 | $924 | | Deferred revenue | $921 | - | | Goods received not invoiced | $77 | $98 | | Other | $177 | $223 | | Total short-term accrued expenses | $2,737 | $2,045 | - Total short-term accrued expenses increased by $692 thousand from March 31, 2025, to June 30, 2025, primarily due to the recognition of $921 thousand in deferred revenue[80] NOTE 7 BASIC AND DILUTED NET INCOME (LOSS) PER SHARE OF COMMON STOCK This note explains the calculation of earnings per share and identifies potentially dilutive securities excluded due to their anti-dilutive effect Potentially Dilutive Securities Not Included in Diluted EPS Calculation | Security Type | June 30, 2025 | June 30, 2024 | | :----------------------------- | :------------ | :------------ | | Common stock warrants | 3,254,966 | 511,251 | | Common stock options | 728,262 | 558,343 | | Restricted shares | 18,265 | 30,645 | | Loan and Security – conversion feature | - | 69,509 | | Total | 4,001,493 | 1,169,748 | - Potentially dilutive securities, including common stock warrants, options, and restricted shares, were not included in the calculation of diluted net income (loss) per share as their effect would have been anti-dilutive for the periods presented[81][82] NOTE 8 COMMITMENTS AND CONTINGENCIES This note outlines the company's contractual obligations, license agreements, supply commitments, and ongoing legal matters - The company has license agreements with Pulmonox Technologies Corporation and NitricGen, Inc., with potential future milestone payments of up to $87 million for Pulmonox and $0.3 million remaining for NitricGen[83][84] - A supply agreement with a third-party vendor has an outstanding purchase order of approximately $0.4 million, with $4.0 million of restricted cash held by the supplier to secure materials[85] - The company is involved in various legal matters in the normal course of business, but does not expect their outcome to have a material effect on its financial position, cash flows, or results of operations[86] NOTE 9 LOANS This note details the company's secured loan agreements, including terms, interest rates, and related party financing - On November 1, 2024, the company entered into a $11.5 million secured loan agreement with a ten-year term, 15% annual interest (3% cash, 12% payable in kind until June 30, 2026), and an 8% royalty interest on net sales from July 2026[88][167] - An additional $2.0 million in advanced financing was received on June 2, 2025, from a related party director, expected to be on terms materially consistent with the existing Loan Agreement[90][168] Components of Loan Agreement (in thousands) | Component | June 30, 2025 | March 31, 2025 | | :----------------------------- | :------------ | :------------- | | Amount outstanding | $11,500 | $11,500 | | Paid in kind interest | $1,066 | $696 | | Debt discount | $(3,249) | $(3,249) | | Amortization of debt discount | $304 | $250 | | Total | $9,621 | $9,197 | NOTE 10 – LEASE REVENUES This note provides information on revenues generated from LungFit PH device leases, including recognized revenue and future minimum lease payments LungFit® PH Lease Revenues (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | | Lease revenues recognized | $1,300 | $600 | | Cash received from leases | $1,200 | $400 | - Future minimum lease payments under LungFit® PH lease arrangements total $9,470 thousand as of June 30, 2025, with $3,373 thousand due in 2026[93] - Depreciation expense related to leased LungFit® PH devices was $0.6 million for the three months ended June 30, 2025, up from $0.5 million in the prior year, and is included in the cost of revenue[93][94] NOTE 11 SEGMENTS This note presents financial information by operating segment, detailing assets, revenues, and losses attributable to Beyond Air, Beyond Cancer, and NeuroNOS Segment Financial Information (Three Months Ended June 30, 2025, in thousands) | Metric | Beyond Air | Beyond Cancer | NeuroNos | Total | | :----------------------------- | :----------- | :------------ | :--------- | :------ | | Total assets | $24,297 | $2,175 | $1,642 | $28,114 | | Revenues | $1,760 | $0 | $0 | $1,760 | | Loss from operations | $(5,406) | $(1,481) | $(730) | $(7,617) | | Net loss before income taxes | $(5,844) | $(1,506) | $(728) | $(8,078) | | Cash used in operations | $(3,755) | $(439) | $(332) | $(4,526) | - The Beyond Air segment generated all current revenues ($1,760 thousand) and accounted for the largest portion of total assets and operating loss[96] - Beyond Cancer and NeuroNos segments, while not generating revenue, contributed to the overall net loss and cash used in operations, reflecting their development stages[96] NOTE 12 – SUBSEQUENT EVENTS This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - No subsequent events occurred other than the one-for-twenty reverse stock split referred to in Note 1[97] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations for the three months ended June 30, 2025, compared to the same period in 2024 Note Regarding Forward-Looking Statements This section cautions readers about forward-looking statements, highlighting inherent risks and uncertainties that could cause actual results to differ materially - This report contains forward-looking statements that are subject to known and unknown risks, uncertainties, and other important factors that may cause actual results to differ materially from expectations[98][99] - Key factors influencing future results include the ability to successfully commercialize LungFit PH, predict product demand, develop new products, complete clinical trials, obtain regulatory approvals, maintain collaborations, protect intellectual property, and secure additional funding[103] Introduction This section introduces Beyond Air as a commercial-stage medical device and biopharmaceutical company, detailing its LungFit platform and product pipeline - Beyond Air is a commercial-stage medical device and biopharmaceutical company developing the LungFit platform for generating nitric oxide (NO) from ambient air[104] - The company's first device, LungFit PH, received FDA approval in June 2022 and European CE mark approval in November 2024 for treating hypoxic respiratory failure in neonates[104][105] - Beyond Air has two additional programs: Beyond Cancer (80% owned) for ultra-high concentration NO (UNO) in solid tumors (Phase 1 clinical trial) and NeuroNOS (88.2% owned) for nNOS inhibitors to treat neurological conditions like ASD (preclinical)[106][108][109] - The LungFit PH system offers competitive advantages by generating NO on-demand from ambient air, eliminating the need for high-pressure cylinders and cumbersome purging procedures[110][112] LungFitPH for the treatment of Persistent Pulmonary Hypertension of the Newborn (PPHN) This section describes the FDA and CE Mark approved LungFit PH device for PPHN, its market potential, and commercialization efforts - LungFit PH is FDA-approved (June 2022) and CE Mark approved (November 2024) for PPHN, with a PMA supplement submitted to the FDA in November 2023 for label expansion to include certain cardiac surgeries[114][116][117] - The company estimates the U.S. sales potential for LungFit PH to be approximately $350 million and worldwide sales potential to be $700 million or greater[117] - Beyond Air is in the final phase of its U.S. commercial launch, aiming to become the market leader, and has secured regulatory approvals and new distribution agreements in several international markets since receiving CE Mark[117] LungFitPRO for the treatment of viral lung infections in hospitalized patients This section outlines the development of LungFitPRO for viral lung infections, including clinical trial results and market potential - LungFitPRO is being developed for viral community-acquired pneumonia (VCAP), including COVID-19, with an estimated U.S. market potential greater than $1.5 billion and worldwide potential greater than $3 billion[118] - A pilot clinical trial showed that intermittent inhalations of 150 ppm NO were well-tolerated, shortened hospital length of stay, and significantly reduced the duration of oxygen support for VCAP patients[119][120] - Further data analysis indicated a larger decline in c-reactive protein (CRP) and compelling evidence that high concentration NO delivery can be a powerful tool against pneumonia[121] Bronchiolitis (BRO) This section discusses the development of a treatment for bronchiolitis, including pilot study results and market potential for this common pediatric condition - Bronchiolitis is the leading cause of hospital admission in children under 1 year, with an estimated U.S. market potential greater than $500 million and worldwide potential greater than $1.2 billion[123] - Three successful pilot studies showed that intermittent 150-160 ppm NO was generally safe, well-tolerated, and effective in shortening hospital length of stay and accelerating time to stable oxygen saturation[124] - Long-term safety data from follow-up studies indicated a favorable re-hospitalization rate for bronchiolitis-related reasons in the inhaled NO group[126] LungFitGO for the treatment of Nontuberculous mycobacteria (NTM) This section details the LungFitGO program for NTM lung infections, including clinical trial findings and future development plans - NTM lung infection is a rare and serious pulmonary disease with no specific treatments for M. Abscessus, representing a U.S. sales potential greater than $1 billion and worldwide potential greater than $2.5 billion[128][129] - A 12-week clinical trial in Australia demonstrated that high-dose NO treatment (up to 250 ppm) was well-tolerated in both home and hospital settings, improved quality of life, and showed trends in microbial load reduction[130][131][132] - One patient achieved culture conversion, and the company anticipates commencing a pivotal clinical trial in calendar year 2026, pending funding and discussions with the FDA[132] Ultra-High Concentration NO (UNO) in solid tumors through majority-owned affiliate Beyond Cancer, Ltd. This section describes the Beyond Cancer affiliate's progress in developing UNO for solid tumors, including preclinical data and Phase 1 clinical trial results - Beyond Cancer, a majority-owned affiliate (80% equity ownership), raised $30.0 million in a private placement to accelerate preclinical work and a Phase 1 human clinical trial for UNO in solid tumors[134] - Preclinical data showed UNO (20,000-200,000 ppm) elicited an immune response, increased immune cell recruitment, and demonstrated dose-dependent cytotoxic effects on cancer cell lines[136] - A Phase 1 clinical trial is underway, with initial results showing no dose-limiting toxicities at 25,000 ppm NO and favorable immune biomarker changes at 50,000 ppm, including a 54% decrease in MDSCs[137][140][141] - A Phase 1b trial protocol for UNO + anti-PD-1 combination therapy in relapsed or refractory malignancies was approved by the Israeli Ministry of Health[143] Selective neuronal nitric oxide synthase (nNOS) inhibitor for the treatment of neurological conditions in collaboration with Hebrew University of Jerusalem This section outlines the NeuroNOS affiliate's program for nNOS inhibitors targeting neurological conditions like ASD, including funding and development timelines - NeuroNOS, a majority-owned affiliate (88.2% equity ownership), raised $2.0 million in a private placement to fund preclinical work for nNOS inhibitors targeting neurological conditions like autism spectrum disorder (ASD)[144][145] - The company expects this program to progress from preclinical to a Phase 1 first-in-human clinical trial by the end of 2026[146] Critical Accounting Estimates This section confirms that there were no material changes to the company's critical accounting estimates during the reporting period - There were no material changes to the critical accounting estimates for the three months ended June 30, 2025, as previously disclosed in the company's 2025 Annual Report on Form 10-K[147] Results of Operations and Comprehensive Loss This section analyzes the company's financial performance, comparing revenues, expenses, and net loss for the current and prior periods Key Financial Performance (in thousands, except per share data) | Metric | June 30, 2025 | June 30, 2024 | Change | | :------------------------------------------------ | :------------ | :------------ | :------- | | Revenues | $1,760 | $683 | +$1,077 | | Cost of revenues | $(1,604) | $(1,016) | $(588) | | Gross profit/(loss) | $156 | $(332) | +$488 | | Research and development | $(3,086) | $(6,009) | +$2,923 | | Selling, general and administrative | $(4,687) | $(7,239) | +$2,552 | | Operating expenses | $(7,773) | $(13,247) | +$5,474 | | Operating loss | $(7,617) | $(13,580) | +$5,963 | | Net loss | $(8,078) | $(13,055) | +$4,977 | | Net loss attributable to Beyond Air, Inc. Stockholders | $(7,691) | $(12,201) | +$4,510 | | Net basic and diluted loss per share | $(1.53) | $(5.32) | +$3.79 | - The company significantly reduced its net loss by $4,977 thousand and operating loss by $5,963 thousand year-over-year, driven by increased revenues and substantial reductions in operating expenses[149] Comparison of Three Months Ended June 30, 2025 with the Three Months Ended June 30, 2024 This section provides a detailed comparative analysis of the company's financial results for the three months ended June 30, 2025, versus the same period in 2024 - The company experienced a substantial improvement in financial performance, marked by increased revenues, a shift from gross loss to gross profit, and significant reductions in operating expenses and net loss compared to the prior year[150][152][153][156] Revenues and Cost of Revenues This section analyzes the changes in the company's revenues and associated costs, highlighting the shift from gross loss to gross profit Revenues and Cost of Revenues (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :---------------- | :------------ | :------------ | :------- | | Revenues | $1,760 | $683 | +$1,077 | | Cost of revenues | $(1,604) | $(1,016) | $(588) | | Gross profit/(loss) | $156 | $(332) | +$488 | - Revenues increased by $1.1 million (157.7%) year-over-year, and the company achieved a gross profit of $0.2 million, a significant improvement from a gross loss of $0.3 million in the prior year[150] - The increase in gross profit is primarily associated with sales growth, partially offset by one-time costs required to upgrade existing devices and provisions for excess inventory[151] Research and Development Expenses This section details the year-over-year changes in research and development expenditures, identifying key areas of cost reduction Research and Development Expenses (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :----------------------------- | :------------ | :------------ | :------- | | Research and development expenses | $3,086 | $6,009 | $(2,923) | - R&D expenses decreased by $2.9 million (48.6%) year-over-year, primarily due to reduced spending in salaries ($1.3 million), stock-based compensation ($0.3 million), preclinical studies ($0.3 million), clinical studies ($0.1 million), professional fees ($0.2 million), and Gen II device development costs ($0.2 million)[152] Selling, General and Administrative Expenses This section examines the changes in selling, general, and administrative expenses, attributing reductions to lower salaries, stock-based compensation, and marketing costs Selling, General and Administrative Expenses (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :------------------------------------ | :------------ | :------------ | :------- | | Selling, general and administrative expenses | $4,687 | $7,239 | $(2,552) | - SG&A expenses decreased by $2.5 million (35.2%) year-over-year, mainly attributed to lower salaries ($0.8 million), stock-based compensation ($1.5 million), marketing and advertising costs ($0.1 million), and legal fees ($0.1 million)[153] Other Income/Expense This section explains the changes in other income and expense, primarily due to the extinguishment of derivative liability and shifts in interest income and expense Other Income/(Expense) (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :------------------------------------------ | :------------ | :------------ | :------- | | Total other income/(expense) | $(461) | $525 | $(986) | - The shift from other income to other expense, a $1.0 million increase in expense, was primarily due to a prior-period gain associated with the change in fair value of derivative liability ($1.0 million) which was extinguished[154] - This was partially offset by a decrease in interest expense of $0.5 million and a $0.4 million decrease in dividend and interest income[154] Net Loss Attributable to Non-controlling Interests This section details the portion of net loss allocated to non-controlling interests in the company's majority-owned affiliates Net Loss Attributable to Non-controlling Interests (in thousands) | Metric | June 30, 2025 | June 30, 2024 | Change | | :------------------------------------------ | :------------ | :------------ | :------- | | Net loss attributable to non-controlling interest | $(387) | $(854) | +$467 | - Net loss attributable to non-controlling interests decreased by $0.5 million, reflecting 20% of Beyond Cancer's net loss and 11.8% of NeuroNOS's net loss[155] Net Loss Attributed to Common Stockholders This section reports the net loss and loss per share attributable to the company's common stockholders, reflecting overall financial performance Net Loss Attributed to Common Stockholders (in thousands, except per share data) | Metric | June 30, 2025 | June 30, 2024 | Change | | :------------------------------------------------ | :------------ | :------------ | :------- | | Net loss attributable to Beyond Air, Inc. Stockholders | $(7,691) | $(12,201) | +$4,510 | | Net basic and diluted loss per share | $(1.53) | $(5.32) | +$3.79 | - Net loss attributable to common stockholders decreased by $4.5 million, and loss per share decreased by $3.79, indicating improved financial performance[156] Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations, including cash position and future funding requirements - As of June 30, 2025, the company had cash, cash equivalents, and marketable securities of $6.5 million and restricted cash of $0.2 million[164] - Management believes there is substantial doubt about the company's ability to meet its obligations with current cash and will require additional funding within one year[165] - Future capital needs depend on the success and costs of commercialization, preclinical studies, clinical trials, and regulatory approvals for product candidates[166] Cash Flows This section provides a summary of cash flows from operating, investing, and financing activities, indicating changes in the company's cash position Cash Flow Activities (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,526) | $(10,180) | | Net cash provided by investing activities | $576 | $3,114 | | Net cash provided by (used in) financing activities | $4,066 | $(264) | | Effect of exchange rate changes | $127 | $111 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $243 | $(7,218) | - The company experienced a net increase of $243 thousand in cash, cash equivalents, and restricted cash in Q1 2025, a significant improvement from a net decrease of $7,218 thousand in Q1 2024[157] Operating Activities This section analyzes cash flows from operating activities, highlighting the impact of net loss and non-cash adjustments on cash utilization - Net cash used in operating activities decreased to $4.5 million in Q1 2025 from $10.2 million in Q1 2024, primarily due to a reduced net loss and lower non-cash adjustments[158][159] Investing Activities This section details cash flows from investing activities, primarily related to marketable securities and property and equipment purchases - Net cash provided by investing activities was $0.6 million in Q1 2025, mainly from redeeming marketable securities ($0.8 million) and purchasing property and equipment ($0.2 million)[160] - This represents a decrease from $3.1 million provided in Q1 2024, which included a larger net redemption of marketable securities ($5.8 million)[161] Financing Activities This section describes cash flows from financing activities, including proceeds from equity offerings and advanced financing, and loan repayments - Net cash provided by financing activities was $4.1 million in Q1 2025, primarily from common stock issuance through an At-The-Market (ATM) offering ($2.4 million) and advanced financing from a related party ($2.0 million)[162] - This contrasts with net cash used of $0.3 million in Q1 2024, which was solely for loan repayments[163] Future Funding Requirements This section outlines the company's anticipated need for additional capital to sustain operations and fund product development, along with current financing efforts - The company expects to incur net losses and cash outflows for at least the next twelve months and requires additional funding within one year to meet its obligations[165] - Current financing efforts include an existing $11.5 million secured loan, a recent $2.0 million advanced financing from a director, and an At-The-Market (ATM) equity offering with $5.8 million currently available for sale[167][168][169] - Beyond Cancer and NeuroNOS are also pursuing fundraising, with NeuroNOS's $2.0 million private placement still open for investment[170] - The company's ability to continue operating beyond the third fiscal quarter of 2026 is largely dependent on the successful commercial launch of LungFit PH, obtaining international partners, and raising additional funds[173] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk This section addresses the company's exposure to market risks, primarily focusing on foreign currency exchange rates, which may impact its financial position - The company's primary market risk exposure is a result of foreign currency exchange rates[175] ITEM 4. Controls and Procedures This section details the evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section confirms the effectiveness of the company's disclosure controls and procedures as assessed by management - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[176] Changes in Internal Control Over Financial Reporting This section reports that there were no material changes to the company's internal control over financial reporting during the period - There were no changes made to the company's internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[177] PART II OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales ITEM 1. Legal Proceedings This section reports on any legal proceedings involving the company - There are no legal proceedings to report[179] ITEM 1A. Risk Factors This section refers to the company's risk factors - There have been no material changes to the risk factors previously disclosed in Part I, 'Item 1A. Risk Factors' of the company's 2025 Annual Report on Form 10-K[180] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports on any unregistered sales of equity securities and the use of proceeds - There were no unregistered sales of equity securities or use of proceeds to report[181] ITEM 3. Defaults Upon Senior Securities This section reports on any defaults upon senior securities - There were no defaults upon senior securities to report[182] ITEM 4. Mine Safety Disclosures This section provides mine safety disclosures, if applicable - Mine safety disclosures are not applicable to the company[183] ITEM 5. Other Information This section includes other information not covered elsewhere, such as Rule 10b5-1 trading arrangements - No director or officer of the company adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[184] ITEM 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including certifications and XBRL documents - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, as well as Inline XBRL documents[186] SIGNATURES This section contains the official signatures of the company's authorized officers, certifying the accuracy of the report - The report was duly signed on August 12, 2025, by Steven Lisi, President and Chief Executive Officer, and Douglas Larson, Chief Financial Officer[190]