Beyond Air Inc

Previous wording

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 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. Our current areas of focus with LungFit®are PPHN, viral community-acquired pneumonia (“VCAP”) including COVID-19, bronchiolitis (“BRO”), 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.

Current wording

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 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. Our current areas of focus with LungFit®are PPHN, 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.

Previous wording

LungFit®PH is the first FDA-approved 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 (“NO 2”) created as a byproduct. The products are then passed through a Smart Filter, which removes the toxic NO 2 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.

Current wording

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 (“NO 2”) created as a byproduct. The products are then passed through a Smart Filter, which removes the toxic NO 2 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.

Previous wording

We submitted a PMA supplement to the FDA in November 2023 for the expansion of the label to include certain cardiac surgeries and we expect to receive CE mark under the Medical Device Regulation (“MDR”) in the EU during the second half of calendar 2024. According to the most recent year-end report from Mallinckrodt Pharmaceuticals (“Mallinckrodt”), sales of NO were $303.2 million in 2023 (down from $339.7 million in 2022) 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 sales than in the U.S. We believe the addressable U.S. market for LungFit®PH to be approximately $350 million and worldwide to be approximately $700 million. We initiated the first phase of our commercial launch (the limited launch phase to introduce Lungfit PH and Beyond Air to hospitals) in July 2022, and entered into phase 2 (to target initial market share gains in certain geographies) with an expanded commercial presence during the spring of 2023 in the U.S. and will continue to work towards a potential launch in the EU and globally in 2024 and beyond. We anticipate entering the final phase of our launch process in calendar 2025 where we intend to equip our commercial organization to become the market leader in the U.S. in a few years.

Current wording

We submitted a PMA supplement to the FDA in November 2023 for the expansion of the label to include certain cardiac surgeries and on December 2, 2024 we received the CE mark under the Medical Device Regulation (“MDR”) in the EU. According to the most recent year-end report from Mallinckrodt Pharmaceuticals (“Mallinckrodt”), sales of NO were $303.2 million in 2023 (down from $339.7 million in 2022) 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 sales than in the U.S. We believe the addressable U.S. market for LungFit®PH to be approximately $350 million and worldwide to be approximately $700 million. We initiated the first phase of our commercial launch (the limited launch phase to introduce Lungfit PH and Beyond Air to hospitals) in July 2022, and entered into phase 2 (to target initial market share gains in certain geographies) with an expanded commercial presence during the spring of 2023 in the U.S. and will continue to work towards a launch in the EU and globally in 2025 and beyond. We anticipate entering the final phase of our launch process in calendar 2025 where we intend to equip our commercial organization to become the market leader in the U.S. in a few years.

Previous wording

A Phase 1b trial protocol has been submitted to the Israeli Ministry of Health (IMOH) and upon regulatory approval, this trial will enroll up to 20 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.

Current wording

A Phase 1b trial has been approved by the Israeli Ministry of Health (IMOH). This trial will enroll up to 20 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.

Previous wording

A summary of our critical accounting estimates is discussed in the section entitled “Critical Accounting Estimates” inItem 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, 2024.

Current wording

A summary of our critical accounting estimates is discussed in the section entitled “Critical Accounting Estimates” inItem 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 nine months ended December 31, 2024.

Previous wording

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

Current wording

Below are the results of operations for the three and nine months ended December 31, 2024 and December 31, 2023:

Previous wording

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

Current wording

Comparison of Three and Nine Months Ended December 31, 2024 with the Three and Nine Months Ended December 31, 2023

Previous 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.

Current wording

$1.1 million and $0.4 million revenue was recognized for the three months ended December 31, 2024 and December 31, 2023, respectively. Cost of revenue of $1.3 million and gross losses of $0.2 million were recognized for the three months ended December 31, 2024, compared to a cost of revenue of $0.8 million and gross losses of $0.4 million for the three months ended December 31, 2023.

Previous wording

$1.5 million and $0.3 million revenue was recognized for the six months ended September 30, 2024 and September 30, 2023, respectively. Cost of revenue of $2.9 million and gross losses of $1.4 million were recognized for the six months ended September 30, 2024, compared to a cost of revenue of $0.7 million and gross losses of $0.4 million for the six months ended September 30, 2023.

Current wording

$2.6 million and $0.7 million revenue was recognized for the nine months ended December 31, 2024 and December 31, 2023, respectively. Cost of revenue of $4.1 million and gross losses of $1.6 million were recognized for the nine months ended December 31, 2024, compared to a cost of revenue of $1.5 million and gross losses of $0.8 million for the nine months ended December 31, 2023.

Previous wording

Research and development expenses for the three months ended September 30, 2024 were $4.6 million as compared to $7.1 million for the three months ended September 30, 2023. The decrease of $2.5 million was primarily attributed to a decrease in spend in salaries $0.6 million ($0.7 million in Beyond Air offset by an increase of $0.1 million in Beyond Cancer), stock-based compensation ($0.5 million in Beyond Air and $0.5 million in Beyond Cancer), pre-clinical studies ($1.0 million related to Beyond Cancer offset by an increase in spend of $0.2 million in NeuroNos), professional fees ( $0.4 million in Beyond Cancer offset by an increase spend in Beyond Air $0.1 million), travel expenses $0.1 million in Beyond Air, offset by an increased spend related to clinical studies $0.2 million.

Current wording

Research and development expenses for the three months ended December 31, 2024 were $3.0 million as compared to $6.8 million for the three months ended December 31, 2023. The decrease of $3.8 million was primarily attributed to a decrease in spend in salaries $0.8 million ($0.6 million in Beyond Air and of $0.2 million in Beyond Cancer), stock-based compensation $2.2 million in Beyond Cancer, pre-clinical studies $0.5 million ($0.4 million in Beyond Air and $0.1 million in Beyond Cancer), clinical studies $0.9 million ($0.6 million in Beyond Air and $0.3 million in Beyond Cancer), professional fees $0.1 million in Beyond Air offset by an increase in Gen II device development costs of $0.7 million in Beyond Air.

Previous wording

Selling, general and administrative expenses for the three months ended September 30, 2024 and September 30, 2023 were $7.2 million and $10.2 million, respectively. The decrease of $3.0 million was attributed primarily to a decrease of $2.4 million due to stock based compensation cost (of which $1.2 million related to Beyond Air and $1.2 million related to Beyond Cancer), $0.2 million marketing and advertising costs for Beyond Air, $0.2 million of legal fees and $0.2 million of travel expenses.

Current wording

Selling, general and administrative expenses for the three months ended December 31, 2024 and December 31, 2023 were $7.7 million and $9.8 million, respectively. The decrease of $2.0 million was attributed primarily to a decrease in spend in salaries $0.3 million ($0.5 million in Beyond Air offset by increased spend of $0.2 million in Beyond Cancer), a decrease of $1.8 million due to stock based compensation cost ($0.3 million in Beyond Air and $1.5 million related to Beyond Cancer), $0.3 million marketing and advertising costs for Beyond Air, $0.1 million rent costs for Beyond Air offset by an increase $0.4 million in legal fees.

Previous wording

Other expense for the three months ended September 30, 2024, and September 30, 2023 was an expense of $1.2 million and income of $0.1 million, respectively. The increase in expense of $1.3 million was attributed primarily to decreased dividend and interest income of $0.5 million, $0.6 million related to the loss on partial extinguishment of the Loan and Security agreement Agreement (the “Loan and Security Agreement”) 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”), a change in fair value of the derivative liability on the Loan and Security Agreement of $0.2 million and a change in fair value of the warrant liability on the Loan and Security Agreement of $0.3 million, $0.2 million losses incurred on disposal of fixed assets in relation to office closures offset by a decrease of $0.4 million relating to non-product related litigation and a decrease in foreign exchange losses $0.1 million.

Current wording

Other expense for the three months ended December 31, 2024, and December 31, 2023, was $2.4 million and income of $0.3 million, respectively. The increase in expense of $2.1 million was attributed primarily to decreased dividend and interest income of $0.3 million, $1.9 million related to the loss on extinguishment of the Loan and Security agreement (the “Loan and Security Agreement”) 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”), and change in fair value of the derivative liability of $0.1 million, $0.1 million losses incurred on disposal of fixed assets in relation to office closures offset by a decrease of $0.4 million in interest expense.

Previous 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.

Current wording

Other income/(expense) for the nine months ended December 31, 2024, and December 31, 2023, was an expense of $3.1 million and income of $0.6 million, respectively. The $3.7 million increase in expense is mainly due to a change in fair value of warrant liability of $0.5 million on the Loan and Security Agreement, in addition to decreased $0.8 million of interest and dividend income from our investments in marketable securities, $2.5 million related to the loss on partial extinguishment of the Loan and Security agreement, an increase in interest expense of $0.4 million, $0.2 million losses incurred on disposal of fixed assets in relation to office closures and offset by a decrease of $0.6 million of non-product related litigation and change in fair value of the derivative liability of $0.2 million on the Loan and Security Agreement.

Previous 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.

Current wording

Net loss attributed to non-controlling interests for the three months ended December 31, 2024, was $0.3 million, compared to $1.0 million for the three months ended December 31, 2023. Net loss attributed to non-controlling interests for the nine months ended December 31, 2024, was $1.8 million, compared to $3.2 million for the nine months ended December 31, 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 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.

Current wording

Net loss attributed to common stockholders of Beyond Air, Inc for the three months ended December 31, 2024, was ($13.1) million or a loss of ($0.15) per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the three months ended December 31, 2023 was ($16.2) million or a loss of ($0.50) per share, basic and diluted.

Previous wording

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 ($0.55) per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the six months ended September 30, 2023 was ($30.3) million or a loss of ($0.96) per share, basic and diluted.

Current wording

Net loss attributed to common stockholders of Beyond Air, Inc for the nine months ended December 31, 2024, was ($38.6) million or a loss of ($0.64) per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the nine months ended December 31, 2023 was ($46.5) million or a loss of ($1.46) per share, basic and diluted.

Previous wording

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

Current wording

Below is a summary of our cash flows activities for the nine months ended December 31, 2024 and December 31, 2023:

Previous 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.)

Current wording

For the nine months ended December 31, 2024, the net cash used in operating activities was $31.2 million which was primarily due to our net loss of $40.4 million, which includes $9.0 million of stock-based compensation, $2.5 million costs related to the extinguishment of the Loan and Security agreement (the “Loan and Security Agreement”) 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”), $2.2 million of depreciation and amortization, $1.6 million in prepayments and other assets, $0.9 million in amortization of debt discount, offset by $ 4.5 million of accrued expenses (which included ($4.5) million of the payment of the final tranche with Circassia Limited and its affiliates (“Circassia”) and ($2.9) million for the Hudson settlement and ($7.6) million attributable to the resolution of*Empery Asset Master, Ltd. Et AL, vs AIT Therapeutics Inc.),*and $1.6 million change in the fair value of the warrant and derivative liabilities.

Previous wording

For the six months ended September 30, 2023 the net cash used in operating activities was $31.5 million which was primarily due to our net loss of $32.5 million, which includes $12.6 million of stock-based compensation, $0.4 million received in grant payments, $0.7 million of depreciation and amortization and $1.3 million decrease in accounts payable, partially offset by ($3.5) million of the payment of the second 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.

Current wording

For the nine months ended December 31, 2023, the net cash used in operating activities was $45.3 million which was primarily due to our net loss of $49.7 million, which includes $19.0 million of stock-based compensation, $0.4 million received in grant payments, $1.2 million of depreciation and amortization and $0.5 million decrease in accounts payable, $1.8 million increase in prepaid accounts, partially offset by ($3.5) million of the payment of the second tranche of the May 2021 settlement with Circassia, ($2.9) million for the Hudson settlement and ($7.6) million attributable to the resolution ofEmpery Asset Master, Ltd. Et AL, vs AIT Therapeutics Inc.

Previous wording

For the six months ended September 30, 2024, net cash provided by investing activities was $19.3 million. For the six months ended September 30, 2023, net cash used in investing activities was $11.4 million. In the six months ended September 30, 2024, the Company redeemed a net $23 million of excess cash in high quality, short term, U.S. dollar denominated marketable equities with high liquidity and invested $3.9 million for the purchase of property and equipment, mainly LungFit PH devices. In the six months ended September 30, 2023, the Company invested $8.9 million of excess cash in high quality, short term, U.S. dollar denominated marketable equities with high liquidity, and $2.5 million for the purchase of property and equipment, mainly LungFit PH devices.

Current wording

For the nine months ended December 31, 2024, net cash provided by investing activities was $12.3 million. For the nine months ended December 31, 2023, net cash used in investing activities was $10.6 million. In the nine months ended December 31, 2024, the Company redeemed a net $16.7 million of excess cash in high quality, short term, U.S. dollar denominated marketable equities with high liquidity and invested $4.5 million for the purchase of property and equipment, mainly LungFit PH devices. In the nine months ended December 31, 2023, the Company invested $6.8 million of excess cash in high quality, short term, U.S. dollar denominated marketable equities with high liquidity, and $3.8 million for the purchase of property and equipment, mainly LungFit PH devices.

Previous 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.

Current wording

Net cash provided by financing activities for the nine months ended December 31, 2024 was $12.1 million, mainly from the issuance of securities through securities purchase agreements which the net proceeds were $18.8 million, $11.3 million payment received on the loan 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 $18.7 million from the payment of short-term loans, including a $17.5 million repayment to Avenue Capital. Net cash provided by financing activities for the nine months ended December 31, 2023 was $27.3 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 (as defined below) of $12 million partially offset by $0.7 million from the payment of short-term loans

Previous 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.

Current wording

We have generated revenue of $3.7 million from the sale of products to date. We had an operating cash flow decrease of $6.8 million for the nine months ended December 31, 2024 and we have experienced an accumulated loss of $278.3 million since inception through December 31, 2024. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $10.9 million ($6.9 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

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.

Current wording

On May 25, 2021, the Company and 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. 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.

Current wording

On February 4, 2022, we entered into 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 December 31, 2024, due to the SEC’s “baby shelf rules,” we were permitted to sell up to $9.6 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, 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.

Current wording

On June 15, 2023, 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 upon entry into the LSA. On December 31, 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

On September 27, 2024, we entered into a binding term sheet for a secured loan with certain lenders including our Chief Executive Officer Steven Lisi and director Robert Carey. The Term Sheet was approved by each of our independent and disinterested directors, following the receipt of a recommendation from an independent investment bank. The Term Sheet provides for the following expected terms: (i) principal amount of $11,500,000; (ii) ten-year term; (iii) interest of 15% per annum of which 12% shall be payable in kind through July 2026; (iv) a royalty interest of 8% of our net sales on a quarterly basis from July 2026 until the facility is repaid in full; and (v) we shall issue the lenders warrants to purchase shares of common stock at an exercise price of $0.3793 per share, in an aggregate amount equal to the quotient of the principal divided by the exercise price. The Company finalized this loan and security agreement on November 1, 2024. (See Note 14)

Current wording

On September 27, 2024, we entered into a binding term sheet for a secured loan with certain lenders including our Chief Executive Officer Steven Lisi and director Robert Carey. The term sheet was approved by each of our independent and disinterested directors, following the receipt of a recommendation from an independent investment bank. The term sheet provides for the following expected terms: (i) principal amount of $11,500,000; (ii) ten-year term; (iii) interest of 15% per annum of which 12% shall be payable in kind through July 2026; (iv) a royalty interest of 8% of our net sales on a quarterly basis from July 2026 until the facility is repaid in full; and (v) we shall issue the lenders warrants to purchase shares of common stock at an exercise price of $0.3793 per share, in an aggregate amount equal to the quotient of the principal divided by the exercise price. The Company finalized this loan and security agreement on November 1, 2024.