Beyond Air Inc

Previous wording

Below are the results of operations for the three months ended June 30, 2024 and June 30, 2023:

Current wording

Below are the results of operations for the three and six months ended September 30, 2024 and September 30, 2023:

Previous wording

Comparison of Three Months Ended June 30, 2024 with the Three Months Ended June 30, 2023

Current wording

Comparison of Three and Six Months Ended September 30, 2024 with the Three and Six Months Ended September 30, 2023

Previous wording

$0.7 million and $0.1 million revenue was recognized for the three months ended June 30, 2024 and June 30, 2023, respectively. Cost of revenue of $1.0 million and gross losses of $0.3 million were recognized for the three months ended June 30, 2024, compared to cost of revenue of $0.3 million and gross losses of $0.2 million for the three months ended June 30, 2023. The increase in revenue was due to the commercial product launch at the end of June 2022. Cost of revenue exceeded revenue primarily driven by costs of supply chain infrastructure required to grow revenue in future periods and depreciation of Lung Fit devices built to be able to capture future revenue.

Current wording

$0.8 million and $0.2 million revenue was recognized for the three months ended September 30, 2024 and September 30, 2023, respectively. Cost of revenue of $1.9 million and gross losses of $1.1 million were recognized for the three months ended September 30, 2024, compared to a cost of revenue of $0.4 million and gross losses of $0.2 million for the three months ended September 30, 2023.

Previous wording

Selling, general and administrative expenses for the three months ended June 30, 2024 and June 30, 2023 were $7.2 million and $10.9 million, respectively. The decrease of $3.7 million was attributed primarily to a decrease in stock-based compensation $2.2 million ($1.2 million in Beyond Air and $1.0 million in Beyond Cancer), salaries $0.4 million (Beyond Air $0.8 million offset by an increase in Beyond Cancer $0.4 million), professional fees ($0.7 million) rent ($0.2 million), and travel expenses ($0.1 million).

Current wording

Selling, general and administrative expenses for the six months ended September 30, 2024 and September 30, 2023 were $14.4 million and $21.1 million, respectively. The decrease of $6.7 million was attributed primarily to a decrease in stock-based compensation ($2.2 million in Beyond Air and $2.3 million in Beyond Cancer), salaries ($1.3 million in Beyond Air offset by an increase in Beyond Cancer of $0.8 million), $0.8 million in consulting fees $0.3 million travel expenses, $0.2 million rent, $0.1 million marketing and advertising costs and $0.1 million legal fees.

Previous wording

Other income for the three months ended June 30, 2024, and June 30, 2023 was income of $0.5 million and income of $0.8 million, respectively. The $0.3 million decrease in income is mainly due to increased interest payable ($0.8 million), increased foreign exchange loss ($0.1 million), a change in fair value of warrant liability ($0.1 million), offset by a change in the derivative liability of $0.5 million on the Loan and Security Agreement (as defined below) and a reduction in contingent losses ($0.2m).

Current wording

Other income/(expense) for the six months ended September 30, 2024, and September 30, 2023 was an expense of $0.7 million and income of $0.9 million, respectively. The $1.6 million decrease in income is mainly due to a change in fair value of warrant liability of $0.4 million on the Loan and Security Agreement, in addition to $0.5 million of interest and dividend income from our investments in marketable securities, $0.6 million related to the loss on partial extinguishment of the Loan and Security agreement, an increase in interest expense of $0.8 million and offset by a decrease of $0.6 million of non-product related litigation and change in fair value of the derivative liability of $0.3 million on the Loan and Security Agreement.

Previous wording

Net Loss Attributable to Non-controlling Interest

Current wording

Net Loss Attributable to Non-controlling Interests

Previous wording

Net loss attributed to non-controlling interest for the three months ended June 30, 2024, was $0.9 million, compared to $1.0 million for the three months ended June 30, 2023. Non-controlling interests represent 20% of the net loss of our Beyond Cancer majority-owned affiliate and the increase in net loss is reflective of the increase in spend in Beyond Cancer versus the prior year.

Current wording

Net loss attributed to non-controlling interests for the three months ended September 30, 2024, was $0.7 million, compared to $1.2 million for the three months ended September 30, 2023. Net loss attributed to non-controlling interests for the six months ended September 30, 2024, was $1.5 million, compared to $2.2 million for the six months ended September 30, 2023. Non-controlling interests represent 20% of the net loss of our Beyond Cancer subsidiary, which was established in November 2021.

Previous wording

Net loss attributed to common stockholders for the three months ended June 30, 2024, was $12.2 million or a loss of $0.27 per share, basic and diluted. Our net loss attributed to common stockholders for the three months ended June 30, 2023 was $14.1 million or a loss of $0.45 per share, basic and diluted.

Current wording

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 ($0.28) per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the three months ended September 30, 2023 was ($16.2) million or a loss of ($0.51) per share, basic and diluted.

Previous wording

Below is a summary of the Company’s cash flows activities for the three months ended June 30, 2024 and June 30, 2023:

Current wording

Below is a summary of our cash flows activities for the six months ended September 30, 2024 and September 30, 2023:

Previous wording

For the three months ended June 30, 2023, the net cash used in operating activities was $17.2 million which was primarily due to the Company’s net loss adjusted for non-cash items of $9.4 million, and a decrease of $7.2 million due to a one-time payment of $7.6 million attributable to the resolution ofEmpery Asset Master, Ltd. Et AL, vs AIT Therapeutics Inc.

Current wording

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 ofEmpery Asset Master, Ltd. Et AL, vs AIT Therapeutics Inc.)

Previous wording

Net cash used by financing activities for the three months ended June 30, 2024 was $0.3 million, which were wholly comprised of loan repayments. Net cash provided by financing activities for the three months ended June 30, 2023 was $21.6 million, mainly from the Loan and Security Agreement of which the net proceeds were $15.8 million, and the issuance of common stock in connection with the ATM of $6.0 million partially offset by $0.3 million from the payment of short-term loans.

Current wording

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. Net cash provided by financing activities for the six months ended September 30, 2023 was $22.0 million, mainly from the Loan and Security Agreement of which the net proceeds were $15.8 million, and the issuance of common stock in connection with the 2022 ATM of $6.7 million partially offset by $0.5 million from the payment of short-term loans.

Previous wording

We have generated revenue of $1.9 million from the sale of products to date. We had an operating cash flow decrease of $7.2 million for the three months ended June 30, 2024 and we have experienced an accumulated loss of $252 million since inception through June 30, 2024. As of June 30, 2024, we had cash, cash equivalents and marketable securities of $21.4 million ($13.2 million excluding Beyond Cancer) and $0.2 million in restricted cash.

Current wording

We have generated revenue of $2.6 million from the sale of products to date. We had an operating cash flow decrease of $23.5 million for the six months ended September 30, 2024 and we have experienced an accumulated loss of $265.2 million since inception through September 30, 2024. As of September 30, 2024, we had cash, cash equivalents and marketable securities of $28.4 million ($22.6 million excluding Beyond Cancer) and $0.2 million in restricted cash. Management believes these factors raise substantial doubt about the Company’s ability to meet its obligations with cash on hand, however, management believes this doubt is alleviated through plans for increased revenues and decreased expenditures, many of which have already been implemented, enabling increased cash flows. The company has recently signed agreements with TrillaMed (providing access to Department of Defense and Veterans Affairs hospitals), Healthcare Links (expanding access to group purchasing organizations and integrated delivery networks) and Business Asia Consultants (accelerating global expansion) which will drive increased revenues. The company has implemented a capital conservation strategy, reducing our back office footprint, reducing staffing levels by over 30% across the company, placing our VCAP study on hold pending future funding and adjusting our production forecasts. The Company expects an immediate benefit from these actions.

Previous wording

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.

Current wording

Our future capital needs and the adequacy of our available funds will depend on many factors, including, but not necessarily limited to, the cost and time necessary for the development, preclinical studies, clinical trials and certification or regulatory approval of our other medical devices, indications as well as the commercial success of our approved product and any product candidates that receive marketing approval by the FDA. We may be required to raise additional funds through sale of equity or debt securities or through strategic collaborations and/or licensing agreements in order to fund operations until we are able to generate enough product or royalty revenues, if any. Financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could have a material adverse effect on our strategic objectives, results of operations and financial condition.

Previous wording

On May 25, 2021, the Company and Circassia Limited and its affiliates (collectively “Circassia”) entered into a settlement agreement (“the Settlement Agreement”) resolving all claims by and between the parties and mutually terminating the agreement with Circassia disclosed in Note 8 above. Pursuant to the terms of the Settlement Agreement, the Company agreed to pay Circassia $10.5 million in three installments. The first payment of $2.5 million was triggered upon FDA approval for the LungFit® PH (fixing the Initial Payment Due Date at July 28, 2022). Thereafter, the Company is to pay $3.5 million to Circassia on the first anniversary of the Initial Payment Due Date and $4.5 million on the second anniversary of the Initial Payment Due Date. Additionally, beginning in year three post-approval, Circassia will receive a quarterly royalty payment equal to 5% of LungFit® PH net sales in the U.S. $4.5 million is included in accrued liabilities at June 30, 2024 and will be paid in the second fiscal quarter of 2025.

Current wording

On May 25, 2021, the Company and Circassia Limited and its affiliates (collectively “Circassia”) entered into a settlement agreement (“the Settlement Agreement”) resolving all claims by and between the parties and mutually terminating the agreement with Circassia disclosed in Note 8 above. Pursuant to the terms of the Settlement Agreement, the Company agreed to pay Circassia $10.5 million in three installments. The first payment of $2.5 million was triggered upon FDA approval for the LungFit® PH (fixing the Initial Payment Due Date at July 28, 2022). Thereafter, the Company paid $3.5 million to Circassia on the first anniversary of the Initial Payment Due Date and $4.5 million on the second anniversary of the Initial Payment Due Date, which was in the second fiscal quarter of 2025. Additionally, beginning in the third fiscal quarter of 2025, Circassia will receive a quarterly royalty payment equal to 5% of LungFit® PH net sales in the U.S. until the final $6.0 million has been paid.

Previous wording

On February 4, 2022, we entered into an At-The-Market Equity Offering Sales Agreement with Truist Securities, Inc. and Oppenheimer & Co, Inc. (the “2022 ATM”). Under the 2022 ATM, we may sell shares of our common stock having aggregate sales proceeds of up to $50.0 million, from time to time and at various prices. If shares of our common stock are sold, there is a 3% fee paid to the sales agent. As of June 30, 2024, there was a balance of $32.9 million available under the 2022 ATM.

Current wording

On February 4, 2022, we entered into an At-The-Market Equity Offering Sales Agreement with Truist Securities, Inc. and Oppenheimer & Co, Inc. (the “2022 ATM”). Under the 2022 ATM, we may sell shares of our common stock having aggregate sales proceeds of up to $50.0 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 2022 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, 2024, due to the SEC’s “baby shelf rules,” we were permitted to sell up to$10.5 million of shares of common stock pursuant to the 2022 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 3% fee paid to the sales agent.

Previous wording

On June 15, 2023 (the “Closing Date”), the Company and its wholly owned subsidiary, Beyond Air Ltd. entered into a Loan and Security Agreement (the “LSA”) with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the “Agent”), Avenue Venture Opportunities Fund, L.P., a Delaware limited partnership (“Avenue”), and Avenue Venture Opportunities Fund II, L.P, a Delaware limited partnership (“Avenue 2” and, together with Avenue, the “Lenders”). Also on June 15, 2023, the Company entered into a Supplement to the LSA (collectively with the Agreement, the “Loan Agreement”) with the Agent and the Lenders for senior secured term loans in an aggregate principal amount of up to $40.0 million, with (i) $17.5 million advanced on the Closing Date, (ii) up to $10.0 million between April 1, 2024 and September 30, 2024, subject to our achieving revenue milestones, and (iii) up to $12.5 million after April 1, 2024, subject to mutual agreement. The loans are due and payable on June 1, 2027. The loan principal is repayable beginning on January 1, 2025, with the possibility of deferring principal payments an additional 6 to 18 months. The loans bear interest at a rate per annum equal to the greater of (i) the prime rate, as published by the Wall Street Journal from time to time, plus 3.75% and (ii) 12.00%. A final payment fee of 3.50% of the principal amount of the first two tranches under the Loan Agreement and an additional final payment of $0.8 million is also due upon repayment of the principal.

Current wording

On June 15, 2023 (the “Closing Date”), the Company and its wholly owned subsidiary, Beyond Air Ltd. entered into a Loan and Security Agreement (the “LSA”) with Avenue Capital Management II, L.P., as administrative agent and collateral agent (the “Agent”), Avenue Venture Opportunities Fund, L.P., a Delaware limited partnership (“Avenue”), and Avenue Venture Opportunities Fund II, L.P, a Delaware limited partnership (“Avenue 2” and, together with Avenue, the “Lenders”). Also on June 15, 2023, the Company entered into a Supplement to the LSA (collectively with the Agreement, the “Loan Agreement”) with the Agent and the Lenders for senior secured term loans, with $17.5 million advanced on the Closing Date. On September 30, 2024 Beyond Air and Avenue Capital Management II, L.P., Avenue Venture Opportunities Fund, L.P. and Avenue Venture Opportunities Fund II, L.P. (“collectively, Avenue Capital”) reached an agreement to extinguish the Avenue Capital senior secured term loan for a one-time payment of $17.85 million. This agreement eliminates the debt and interest payments that would have been made to Avenue Capital from October 1, 2024 through June 30, 2026 of $12.0 million. In connection with this agreement $5.0 million was paid on September 27, 2024 in partial settlement. The final $12.85million was paid on October 4, 2024. Avenue Capital invested $3.35 million in the securities purchase agreement II at the same terms and conditions as all other investors.

Previous wording

Our ability to continue to operate beyond the first fiscal quarter of 2025 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.

Current wording

Our ability to continue to operate beyond the third fiscal quarter of 2026 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.