XAIR

Beyond Air, Inc. (XAIR) - Q1 2026 (Ended June 30, 2025) Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2025. Beyond Air, Inc. is a commercial-stage medical device and biopharmaceutical company developing the LungFit® platform, which generates nitric oxide (NO) from ambient air. The company's primary commercial product, LungFit® PH, received FDA approval in June 2022 and CE Mark approval in November 2024. The company also operates two majority-owned subsidiaries: Beyond Cancer (oncology) and NeuroNOS (neurology). All share and per-share data have been retroactively adjusted for a 1-for-20 reverse stock split effectuated on July 14, 2025.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Revenues increased 158% year-over-year, driven by expanded hospital contracts and initial international sales following CE Mark approval.
• Profitability Improvement: The company moved from a gross loss of $0.33 million to a gross profit of $0.16 million, attributed to sales growth offsetting one-time fleet upgrade costs and inventory provisions.
• Expense Reduction:
  • R&D Expenses: Decreased 49% to $3.09 million, primarily due to reduced salaries, stock-based compensation, and clinical study costs.
  • SG&A Expenses: Decreased 35% to $4.69 million, driven by lower salaries and stock-based compensation.
• Other Income/Expense: Shifted from a net gain of $0.53 million in the prior year to a net expense of $0.46 million. This change was primarily due to the absence of a $1.06 million gain from the change in fair value of a derivative liability in the current period (extinguished in the prior year).
• Liquidity: Total cash and marketable securities decreased significantly from $21.37 million to $6.46 million, reflecting operational burn and reduced investment redemptions.

Outlook, Risks, and Management Commentary

• Going Concern Warning: Management has raised substantial doubt about the company's ability to continue as a going concern for at least one year from the filing date. The company expects to incur net losses and requires additional funding within the next 12 months.
• Financing Activities:
  • Received $2.44 million from an At-The-Market (ATM) equity offering.
  • Received $2.0 million in advanced financing from a related party (director/lender) on June 2, 2025, with terms expected to mirror the existing Loan Agreement.
  • Existing Loan Agreement: $11.5 million principal, 15% interest (3% cash, 12% PIK through June 2026), secured by substantially all assets, with an 8% royalty on net sales starting July 2026.
• Operational Milestones:
  • LungFit® PH: Commercial launch in final phase in the U.S.; signed distribution agreements in France, India, Italy, Japan, and others.
  • Beyond Cancer: Phase 1b trial protocol approved for UNO + anti-PD-1 combination therapy.
  • NeuroNOS: Raised $2.0 million in private placement; expects to progress to Phase 1 clinical trial by end of 2026.
• Risks: Dependence on third-party suppliers (89% of materials from two vendors), regulatory approval uncertainties for new indications, and the need for continued capital raises.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $6.5 million cash balance against the stated need for additional funding within one year.
• Debt Covenants & PIK Interest: Review the terms of the $11.5 million loan, specifically the 12% Pay-In-Kind (PIK) interest component and the 8% royalty on net sales commencing July 2026.
• ATM Capacity: Confirm the remaining capacity under the "baby shelf rules" (currently limited to $5.8 million due to public float size).
• Supplier Concentration: Assess the risk associated with 89% of material purchases coming from just two vendors.
• Reverse Stock Split Impact: Ensure all historical share counts and per-share metrics are adjusted for the 1-for-20 split effective July 14, 2025.