XAIR

Beyond Air, Inc. (XAIR) - Q2 2025 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended September 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 for treating persistent pulmonary hypertension of the newborn (PPHN) and peri-operative pulmonary hypertension. The company also operates two development subsidiaries: Beyond Cancer (oncology) and NeuroNOS (neurology/autism).

Key Financial Metrics

Note: All share and per-share data has been retroactively adjusted for a 1-for-20 reverse stock split effective July 14, 2025.

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased 128% year-over-year for the quarter and 142% year-over-year for the six months, driven by expanded hospital contracts and international market entry.
• Expense Reduction: Operating expenses decreased significantly. R&D expenses dropped from $4.59M to $2.45M (Q2) and SG&A expenses fell from $7.16M to $4.91M (Q2), primarily due to reduced salaries, stock-based compensation, and Gen II device development costs.
• Improved Loss Profile: The net loss attributable to Beyond Air improved substantially, narrowing from $13.36M in Q2 2024 to $7.94M in Q2 2025.
• Capital Structure: The company executed a 1-for-20 reverse stock split. Additionally, the company raised capital through an At-The-Market (ATM) offering and a warrant inducement exercise, generating approximately $11 million in net proceeds during the six-month period.

Outlook, Risks, and Subsequent Events

Liquidity and Going Concern: Management has raised substantial doubt about the company's ability to continue as a going concern for the next 12 months without additional funding. The company expects to incur net losses and cash outflows for at least the next year.

Subsequent Financing (Post-Sept 30, 2025):

• Note Purchase Agreement: On November 4, 2025, the company secured a $12.0 million secured promissory note from Streeterville Capital LLC at 15% interest.
• Equity Purchase Agreement: Concurrently, an agreement was signed for the purchase of up to $20.0 million of common stock.
• Debt Restructuring: The company amended its existing Loan Agreement to finalize $2.0 million in additional loans and reduced the exercise price of existing debt warrants from $7.59 to $1.95.
• Option Repricing: On November 4, 2025, the board approved repricing 726,618 stock options to an exercise price of $1.95.

Risks: Key risks include the need for additional financing, regulatory approval delays for new indications (LungFit PRO, LungFit GO), and dependence on third-party suppliers (90% of materials from two vendors).

Investor Verification Checklist

• Capital Runway: Verify the closing of the $12M note and $20M equity facility with Streeterville Capital to confirm the resolution of the "substantial doubt" regarding going concern status.
• ATM Capacity: Confirm the company's public float status, as the "baby shelf rules" currently limit ATM sales to $0 until the float exceeds $75 million.
• Debt Covenants: Review the terms of the amended Loan Agreement and the new Note, specifically the 15% interest rate, 8% royalty on net sales (starting July 2026), and collateral requirements.
• Revenue Quality: Assess the sustainability of revenue growth given the shift from one-time device sales to recurring lease revenue models.
• Stock-Based Compensation: Monitor the impact of the recent option repricing on future expense recognition and potential dilution.