Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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.

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. The Company expects this program to progress from preclinical to a phase 1 first-in-human clinical trial by the end of 2026.

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, will continue to support the NeruoNOS team. Beyond Air has 85.7% 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.

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. 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 Australia, New Zealand, Hong Kong Thailand, Taiwan and Malaysia with our partner Getz Healthcare and are awaiting approvals in several other countries in South East Asia. Additionally, we have signed new distribution agreements covering France, India, Israel, Italy, Japan, Mexico, Morocco, Poland, Romania, Saudi Arabia, and Turkey, among others. 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 32^nd 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.

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.

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."

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.

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 was raised in the private placement offering during the third calendar quarter of 2025. In total, the investors purchased a 14.3% equity ownership in NeuroNos, while Beyond Air maintained 85.7% 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.

Work is currently being done by the University in a preclinical setting. We expect this program to progress from preclinical to a phase 1 first-in-human clinical trial by the end of 2026.

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 six months ended September 30, 2025.

Results of Operations and Comprehensive Loss

Below are the results of operations for the three and six months ended September 30, 2025 and September 30, 2024:

(in thousands, except share data)

		For the Three Months Ended								For the Six Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Revenues		$	1,818			$	798			$	3,578			$	1,481
Cost of revenues			2,116				1,882				3,720				2,897
Gross loss			(298	)			(1,084	)			(142	)			(1,416	)
Research and development			(2,450	)			(4,585	)			(5,536	)			(10,594	)
Selling, general and administrative			(4,913	)			(7,163	)			(9,600	)			(14,402	)
Total operating expenses			(7,363	)			(11,748	)			(15,136	)			(24,995	)
Loss from operations			(7,661	)			(12,833	)			(15,278	)			(26,412	)
Other income (expense):
Dividend/investment income			59				150				87				511
Interest and finance expense			(639	)			(927	)			(1,187	)			(1,891	)
Change in fair value of warrant liability			(1	)			(4	)			16				214
Change in fair value of derivative liability			-				256				-				1,314
Foreign exchange gain/(loss)			(18	)			74				(59	)			(72	)
Loss on disposal of fixed assets			(46	)			(171	)			(57	)			(171	)
Loss on extinguishment of debt			-				(624	)			-				(624	)
Other income/(expense)			48				49				142				48
Total other income/(expense)			(597	)			(1,196	)			(1,058	)			(671	)
Provision for income taxes			-				-				-				-
Net loss		$	(8,258	)		$	(14,029	)		$	(16,336	)		$	(27,083	)
Less: net loss attributable to non-controlling interests			(318	)			(671	)			(705	)			(1,525	)
Net loss attributable to Beyond Air, Inc.			(7,940	)			(13,358	)			(15,631	)			(25,559	)
Foreign currency translation gain/(loss)			18				(79	)			145				24
Comprehensive loss attributable to Beyond Air, Inc.		$	(7,922	)		$	(13,438	)		$	(15,486	)		$	(25,535	)
Net basic and diluted loss per share of common stock attributable to Beyond Air, Inc.		$	(1.25	)		$	(5.67	)		$	(2.75	)		$	(10.99	)
Weighted average number of shares, outstanding, basic and diluted			6,356,573				2,355,927				5,689,420				2,325,651

Comparison of Three and Six Months Ended September 30, 2025 with the Three and Six Months Ended September 30, 2024

Revenues and Cost of Revenues

$1.8 million and $0.8 million revenue was recognized for the three months ended September 30, 2025 and September 30, 2024, respectively. Cost of revenue of $2.1 million and gross losses of $0.3 million were recognized for the three months ended September 30, 2025, compared to a cost of revenue of $1.9 million and gross losses of $1.1 million for the three months ended September 30, 2024.

$3.6 million and $1.5 million revenue was recognized for the six months ended September 30, 2025 and September 30, 2024, respectively. Cost of revenue of $3.7 million and gross losses of $0.1 million were recognized for the six months ended September 30, 2025, compared to a cost of revenue of $2.9 million and gross losses of $1.4 million for the six months ended September 30, 2024.

Revenues continue to expand as we continue to sign hospital contracts and begin selling into international markets. The reduction in gross losses 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 September 30, 2025 were $2.5 million as compared to $4.6 million for the three months ended September 30, 2024. The decrease of $2.1 million was primarily attributed to a decrease in spend in salaries $0.6 million ($0.3 million in Beyond Air and $0.3 million in Beyond Cancer), stock-based compensation costs $0.1 million (less than $0.1 million in Beyond Air and less than $0.1 million in Beyond Cancer), pre-clinical expenses $0.2 million ($0.1 million in Beyond Cancer and $0.1 million in NeuroNos), professional fees $0.2 million ($0.1 million in Beyond Air and $0.1 million in Beyond Cancer), and a reduction in Gen II device development costs of $1.0 million.

Research and development expenses for the six months ended September 30, 2025 were $5.5 million as compared to $10.6 million for the six months ended September 30, 2024. The decrease of $5.1 million was attributed primarily to a decrease in spend in salaries $1.9 million ($0.8 million in Beyond Air and $1.1 million in Beyond Cancer), stock compensation costs $0.4 million ($0.2 million in Beyond Air and $0.2 million in Beyond Cancer), pre-clinical expenses $0.6 million ($0.3 million in Beyond Cancer and $0.3 million in NeuroNos), professional fees $0.5 million ($0.3 million in Beyond Air and $0.2 million in Beyond Cancer), travel expenses $0.1 million, depreciation $0.1 million, and a reduction in Gen II device development costs of $1.2 million.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended September 30, 2025 were $4.9 million as compared to $7.2 million for the three months ended September 30, 2024. The decrease of $2.3 million was attributed primarily to a decrease in spend in salaries $0.6 million ($0.4 million in Beyond Air and $0.2 million in Beyond Cancer), stock-based compensation costs $1.3 million ($0.6 million in Beyond Air and $0.8 million in Beyond Cancer), $0.3 million of legal fees and $0.1 million of facility expenses, partially offset by an increase of $0.1 million in royalties.

Selling, general and administrative expenses for the six months ended September 30, 2025 were $9.6 million as compared to $14.4 million for the six months ended September 30, 2024. The decrease of $4.8 million was attributed primarily to a decrease in spend in salaries $1.4 million ($1.1 million in Beyond Air and $0.3 million in Beyond Cancer), stock-based compensation costs $2.7 million ($1.3 million in Beyond Air and $1.5 million in Beyond Cancer, partially offset by reduction of $0.1 million in NeuroNos), $0.4 million of legal fees, $0.1 million marketing and advertising costs for Beyond Air, $0.1 million travel expenses, and $0.1 million of facility expenses, partially offset by an increase of $0.2 million in royalties.

Other Income/Expense

Other expense for the three months ended September 30, 2025 were $0.6 million as compared to other expense of $1.2 million for the three months ended September 30, 2024. The decrease in expense of $0.6 million was attributed primarily to the prior period loss associated with the partial extinguishment of debt of $0.6 million. The derivative liability was extinguished in the prior year and no fair value measurement of such instrument occurred during the current period. Additionally, the decrease in interest expense of $0.3 million is due to the Company's current debt facility compared to the debt outstanding in the comparative period.

Other expense for the six months ended September 30, 2025 were $1.1 million as compared to other expense of $0.7 million for the six months ended September 30, 2024. The increase in expense of $0.4 million was attributed primarily to the change in fair value of the derivative liability that was extinguished in the prior year and no fair value measurement of such instrument occurred during the current period. Additionally, the decrease in interest expense of $0.7 million is due to the Company's current debt facility compared to the debt outstanding in the comparative period. The decrease in interest expense is offset by a $0.4 million decrease of dividend and investment income.

Net Loss Attributable to Non-controlling Interests

Net loss attributed to non-controlling interests for the three months ended September 30, 2025, was $0.3 million, compared to $0.7 million for the three months ended September 30, 2024. Net loss attributed to non-controlling interests for the six months ended September 30, 2025, was $0.7 million, compared to $1.5 million for the six months ended September 30, 2024. Non-controlling interests represent 20% of the net loss of our Beyond Cancer subsidiary and 11.8% of the net loss of our NeuroNos subsidiary based on the ownership structure during the majority of the reporting periods.

Net Loss Attributed to Common Stockholders

Net loss attributed to common stockholders of Beyond Air, Inc for the three months ended September 30, 2025, was $7.9 million or a loss of $1.25 per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the three months ended September 30, 2024 was $13.4 million or a loss of $5.67 per share, basic and diluted.

Net loss attributed to common stockholders of Beyond Air, Inc for the six months ended September 30, 2025, was $15.5 million or a loss of $2.75 per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the six months ended September 30, 2024 was $25.6 million or a loss of $10.99 per share, basic and diluted.

Liquidity and Capital Resources

Cash Flows

Below is a summary of our cash flows activities for the six months ended September 30, 2025 and September 30, 2024:

		Six Months Ended
		September 30,
(in thousands)		2025				2024
Net cash provided by (used in):
Operating activities		$	(8,979	)		$	(23,528	)
Investing activities			816				19,261
Financing activities			12,984				21,360
Effect of exchange rate changes on cash and cash equivalents			145				(23	)
Net increase (decrease) in cash, cash equivalents and restricted cash		$	4,966			$	(17,069	)

Operating Activities

For the six months ended September 30, 2025 the net cash used in operating activities was $9.0 million which was primarily due to our net loss of $16.3 million, which includes $3.4 million of stock-based compensation, $1.6 million of depreciation and amortization, and $1.0 million of paid in kind interest and amortization of debt discount associated with the Loan Agreement, in addition to $0.9 million in prepayments and other assets.

For the six months ended September 30, 2024 the net cash used in operating activities was $23.5 million which was primarily due to our net loss of $27.1 million, which includes $6.6 million of stock-based compensation, $0.4 million received in grant payments, $1.5 million of depreciation and amortization, $3.9 million of accrued expenses (which included ($4.5) million of the payment of the final tranche of the Circassia settlement and ($2.9) million for the Hudson Bay settlement and ($7.6) million attributable to the resolution of Empery Asset Master, Ltd. Et AL, vs AIT Therapeutics Inc.)

Investing Activities

For the six months ended September 30, 2025, net cash provided by investing activities was $0.8 million which was mainly attributable to a net redemption of investments in marketable securities of $1.3 million and invested $0.4 million for the purchase of property and equipment, mainly LungFit PH devices.

For the six months ended September 30, 2024, net cash provided by investing activities was $19.3 million which was mainly attributable to a net redemption of investments in marketable securities of $23.1 million and invested $3.8 million for the purchase of property and equipment, mainly LungFit PH devices.

Financing Activities

Net cash provided by financing activities for the six months ended September 30, 2025 was $13.0 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 advanced financing from a related party, a director of the Company who is also an existing lender under its Loan Agreement. The Company is currently arranging the terms and expects that such financing will be issued on terms and conditions materially consistent with those of the Loan Agreement.

Net cash provided by financing activities for the six months ended September 30, 2024 was $21.4 million, mainly from the issuance of securities through securities purchase agreements which the net proceeds were $19 million, $7.5 million advance payment on loan and security 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 $5.7 million from the payment of short-term loans, including a $5.0 million partial repayment to Avenue Capital.

Future Funding Requirements

We have generated revenue of $8.5 million from the sale of products to date. We had an operating cash flow decrease of $9.0 million for the six months ended September 30, 2025 and we have experienced an accumulated loss of $302.0 million since inception through September 30, 2025. As of September 30, 2025, we had cash, cash equivalents and marketable securities of $10.7 million and $0.2 million in restricted cash.

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 balance 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 and Security 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 September 30, 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.

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.

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 $2.5 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 will 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 second fiscal quarter of 2027 will be largely dependent upon the successful commercial launch of LungFit^® PH, as well as obtaining partners in other parts of the world, and 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.

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.