XAIR 10-K & 10-Q changes, risk factors and insider trading

On November 1, 2024,2024 thewe Company entered into a loan and security agreement, and subsequently on November 3, 2025, we entered into an amended and restated loan agreement (as amended, the “Amended Loan Agreement”) for a secured loan with certain lenders including itsour former Chief Executivechief Officerexecutive officer and Chairmanchairman Steven Lisi and director Robert Carey.Carey, our present Chairman. The Amended Loan Agreement provides for a $11,500,000$13,500,000 loan. The loan bears interest at a rate per annum (subject to increase during an event of default) equal to 15% of which 3% shall be payable in cash and 12% payable in kind through June 30, 2026 and thereafter all in cash. If not earlier repaid in full, the outstanding principal amount of the loan, together with any accrued and unpaid interest, shall be due and payable on October 4, 2034. The Company’s obligations under the Loan Agreement are secured by substantially all of the Company’s assets.

We currently have a limited marketingAlthough and sales organization. If we are unable to scale sales and marketing capabilities or enter into agreements with third parties to market and sell LungFit® PH or our product candidates, we may be unable to generate revenue Although some of our employees may have sold other similar products in the past while employed at other companies, we as a company have limited experience selling and marketing our product candidates and we currently have a nascent marketing and sales organization. To successfully commercialize LungFit® PH or any other products that may result from our development programs, we will need to further develop these capabilities, either on our own or with others. We continue to refine our commercialization efforts for LungFit® PH and intend to establish a more complete sales and marketing organization with technical expertise to potentially reach all U.S. hospitals using or capable of using NO. This will be an expensive, difficult and time-consuming endeavor. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of our products.

In October 2023, Hamas conducted several terrorist attacks in Israel resulting in ongoing war across the country, forcing the closure of the Company’s offices in Israel for several days. Any armed conflicts, terrorist activities or political instability involving Israel or other countries in the region could adversely affect the Company’s business. Moreover, the Company has a significant number of employees located in Israel. The Company’s operations could also be disrupted by the absence for significant periods of one or more key employees or a significant number of other employees because of military service. While there are business continuity plans in place to address the military call-ups, any of these circumstances could have a material adverse effect on the Company’s business.

On In November 26, 2024, the Company received European CE mark approval of the LungFit PH® system for the following:

$3.7Revenue was $7.7 million and $1.2 revenue was recognized$3.7 for the years ended March 31, 20252026 and March 31, 20242025 respectively. Cost of revenue of $5.4 $7.4 million and gross lossesprofit of $1.7$0.3 million were recognized for the year ended March 31, 20252026 compared to a cost of revenue of $2.5$5.4 million and gross losses of $1.3$1.7 million for the the year ended March 31, 2024.2025.

Research and and development expenses for the year ended March 31, 20252026 were $16.9$10.2 million,million as compared to $24.4$16.9 million for the year ended March 31, 2024.2025. The decrease of $7.5$6.7 million was primarily attributed primarily attributed to a decrease in spendsalaries of $2.8 million ($1.5 million in salariesBeyond Air and $1.5 million in Beyond Air, stock-basedCancer, compensationpartially $4.0offset by increase of $0.2 million ($0.7 million in BeyondNeuroNos), Airpre-clinical andexpenses $3.3of $0.8 million ($0.3 million in Beyond Cancer and $0.5 million in NeuroNos), pre-clinicalprofessional studiesfees $1.1of million reduced spend in Beyond Cancer on device development costs, clinical studies $1.9$0.4 million ($1.5 million in Beyond Air and $0.4 million in Beyond Air Cancerand $0.3 million in Beyond Cancer, partially offset by increase of $0.3 million in NeuroNos), professionaland feesa $1.0reduction in Gen II device development costs of $2.3 million, partially offset by increased stock-based compensation costs of $0.7 million ($1.4 million in Beyond Cancer, partially ($0.6offset by a decrease of $0.7 million in Beyond Air and $0.4 million in Beyond Cancer) and travel expenses $0.2 million..

Net loss attributed to non-controlling interest interests for the year ended March 31, 2025,2026 was $1.9$1.1 million for the year ended March 31, 2025,million, compared to $4.1$1.9 million for the year ended March 31, 2024.2025. Non-controlling interestinterests representsrepresent 20% of the net loss of our Beyond Cancer subsidiary and 11.76%the applicable ownership structure during each reporting period of the net loss of our NeuroNos subsidiary. The year-on-year variance is due to a decrease in the net loss of Beyondour CancerNeuroNos partially offset by the loss in NeuroNos, which the non-controlling interest was established in the current fiscal year.subsidiary.

Net loss attributed to common stockholders of Beyond Air, Inc. for the year ended March 31, 2025,2026 was $46.6$33.2 million or a loss of $0.69$4.01 per share, basic and diluted, as a result of the foregoing.diluted. Our net loss attributed to common stockholders of Beyond Air, Inc. for the year ended March 31, 2024,2025 was $60.3 $46.6 million or a loss of $1.82$13.77 per share, basic and diluted.

We expect to incur net losses and have significantnet 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.

On November 1, 2024, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) and subsequently on November 3, 2025 the Company amended and restated the Loan Agreement (as amended, the “Amended Loan Agreement”) for a secured loan with certain lenders, including its Chiefformer Executivechief Officerexecutive officer, Steven LisiLisi, and director Robert Carey, for an aggregate principal balanceamount of $11.5$13.5 million. The Loan Agreement was approved by each of the Company’s independent and and disinterested directors, following the receipt of a recommendation from an independent investment bank. The Amended Loan Agreement provides provides for the following terms: (i) principal amount of $11,500,000$13,500,000; (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 shall issueissued the lenders warrants to purchase shares of the Company’s common stockstock. atConcurrent anwith entering into the Amended Loan Agreement, 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 $0.3793the warrants from $7.586 per share to $1.95 per share.

On January September14, 26, 2024,2026, the Company, Company entered into a securities purchase agreement (the “Securities Purchase Agreement II”) with certainan institutional and accredited investors, including certain directors and officers of the Company.investor. Pursuant to the purchasePurchase agreement,Agreement, the Company sold to the investors investor, and the investor purchased from the Company, in a private placement offering, (i) an aggregate of 24,999,999(i) 524,990 shares (the “Shares”) of Commonthe Stock”,Company’s common stock, at a purchase price of $0.5043$1.272 per Share, (ii) pre-funded warrants to purchase up to 15,848,7123,405,828 shares of commonCommon stockStock (the “Pre-funded Warrants”) at a purchase price of $0.5042$1.2719 per pre-fundedPre-funded warrantWarrant and (iii) warrants to purchase up to 40,848,7113,930,818 shares of commonCommon stock,Stock (the “Common Warrants”, and together with the Pre-funded Warrants the “Warrants”), for aggregate for gross proceeds ofunder $20.6the million (which includesPurchase $2.0 million from related parties). Each share and each pre-funded warrant was sold with an accompanying common warrant to purchase one shareAgreement of common stock.$5,000,000. The pre-fundedPre-funded warrantsWarrants have an exercise price of $0.0001 per share, and the commonCommon warrantsWarrants have an exercise price price of $0.3793$1.147 per share. Members of the Board of Directors and certain executives of the Company are considered related parties to this offering. The offering closed on DecemberJanuary 31,16, 2024.2026, Theon Company received net proceedssatisfaction of $18.9customary millionclosing after deductions for placement agent commissions and other offering costs of $1.4 million and $0.3 million, respectively. (See Note 4 to our financial statements for the fiscal year ended March 31, 2025).conditions.

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.therapy Current cashand onother handstrategic is expected to be sufficient to complete the phase 1b study.alternatives.

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 9 to our financial statements for the fiscal year ended March 31, 2025.Circassia. Pursuant to the terms of the Settlement Agreement, the Company agreed to pay Circassia $10.5 million in three installments, all of which has been paid. Additionally, beginningstarting in the third fiscal quarter of 2025, CircassiaCircasia willbegan receivereceiving a quarterly royalty payment equal to 5% of LungFit® PH net sales in the U.S. untilThis royalty will terminate once the finalaggregate payment reaches $6.0 million has been paid.million. As of March 31, 2025,2026, less thanapproximately $0.1$0.4 million of royaltyroyalties hashave been paid.

Our ability to continue to operate beyond the thirdfourth fiscal quarter of 20262027 will be largely dependent upon the successful commercial launch of LungFit® PH, as well as obtaining partners in other parts of the world, the timing of the FDA approval for LungFit PH 2 and possibly 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.

Below is a summary of the statements of cash flowsflow activities for the years ended March 31, 20252026 and March 31, 2024.2025.

For the year ended March 31, 2025, the net cash used byin operating activities was $38.2 million, which was primarily due to our net loss of $48.5 million which includes $9.1 million of stock-based compensation, $3.0 million of depreciation and amortization, a non-cash loss of $2.4 million on the extinguishment of debt, an impairment of fixed assets charge $0.5 million, a $0.4 million increase in accounts receivable, a $0.4 million increase in inventory, partially offset by a $1.0 million decrease in prepaid accounts, a decrease in accrued liabilities $6.4 million (which included $4.5 million in payment of the final tranche of a May 2021 settlement with Circassia). For the year ended March 31, 2024, net cash used by operating activities was $56.0 million, which was primarily due to our net loss of $64.3 million, which includes $21.3 million of stock-based compensation, $0.4 million received in grant payments, $2.0 million of depreciation and amortization partially offset by a $1.6 million increase in prepaid accounts, a $0.3 million increase in accounts receivable, a $1.0 million increase in inventory, ($3.5) million in payment of the second tranche of a May 2021 settlement with Circassia, ($2.9) million for the Hudson settlement and ($7.6) million attributable to the resolution of the Empery Suit.

For the year ended March 31, 2025, net cash provided by financing activities was $16.6 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 an At-The-Market Offering Sales Agreement with Truist Securities, Inc. (the “2022 ATM”) of $0.7 million and $1.5 million in connection with the 2025 ATM partially offset by $18.0 million from the payment of long- and short-term loans, including a $17.5 million repayment to Avenue Capital. For the year ended March 31, 2024, net cash provided by financing activities was $43.2 million, mainly from the Loan Agreement of which the net proceeds were $15.8 million, the issuance of common stock in connection with the 2022 ATM of $13.4 million, and the registered direct offering (the “Registered Offering”) pursuant to a securities purchase agreement dated March 20, 2024 with Roth Capital Partners, LLC and Laidlaw & Company (UK) Ltd. of $14.6 million, the issuance of common stock in connection with the exercise of options ($0.2 million) partially offset by $0.8 million from the payment of short-term loans.

ThereOther than as noted below, there have been no material changes to the risk factors previously disclosed in Part I, “Item 1A. Risk Factors” of our 20252026 Annual Report on Form 10-K except as set forth below.Report.

OnIn November 26, 2024, the Company received European CE mark approval of the LungFit PH® system for the following:

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 isrecently currentlycompleted ina phase 1 human clinical trial.

The second program, which does not utilize the LungFit® platform, partially inhibits neuronal nitric oxide synthase (“nNOS”) in the brain to treat neurological and neuro-oncology 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 one-time payments based on clinical, regulatory and sales milestones. Development timing is under review pending a proposed sale to XTL Biopharmaceutical Ltd.

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, is currently supporting the NeruoNOSNeuroNOS team. Beyond Air currently has 84.75%71.6% ownership in NeuroNOS.

OnIn November 26, 2024, the company received European CE mark approval of the LungFit PH® system for the following:

We submitted a PMA supplement to the FDA in November 2023 for the expansion of the label to include certain cardiac surgeries. The submission has been withdrawn in favor of our submission of our second generation LungFit PH. 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. WeSince 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,November 2024, we have received regulatory approvals in more than 1027 other countries outside of the United States and EU. Additionally, we have signed distribution agreements covering over 40 countries outside of the United States. We anticipate significant contribution to revenues in fiscal 20262027 and beyond from these and future partnerships.

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 77.1 million deaths worldwide reported as of JanuaryMarch 2024,2026, 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.

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 pauseterminate this study pending future funding.study.

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.daily at 250 ppm NO. 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 ongoingaforementioned 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.

In the fourth calendar quarter of 2021, Beyond Cancer, our majority-owned affiliate,subsidiary, 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.

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 as of OctoberFebruary 1,2, 2025.2026.

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-yearthree-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$3.9 million andhas $0.2 million wasbeen raised in the private placement offering during the third and fourth calendar quarter of 2025, respectively.offering. In total, the investors purchased a 15.25%28.4% equity ownership in NeuroNos, while Beyond Air maintained 84.75%71.6% 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.

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 ninethree months ended DecemberJune 31,30, 2025.2026.

Below are the results of operations for the three and nine months ended DecemberJune 31,30, 20252026 and DecemberJune 31,30, 20242025:

Comparison of Three and Nine Months Ended DecemberJune 31,30, 20252026 with the Three and Nine Months Ended DecemberJune 31,30, 20242025

Revenue was $2.2$1.8 million andduring $1.1each million forof the three months ended DecemberJune 31,30, 20252026 and DecemberJune 31,30, 2024, respectively. 2025. Cost of revenue of $1.9 $1.5 million and gross profit of $0.3$0.2 million were recognized for the three months ended DecemberJune 31,30, 2025,2026, compared to a cost of revenue of $1.3$1.6 million and gross lossesprofit of $0.2 million for the three months ended DecemberJune 31,30, 2024.2025.

Research and development expenses for the three months ended DecemberJune 31,30, 20252026 were $2.4$2.0 million as compared to $3.0$3.1 million for the three months ended DecemberJune 31,30, 2024.2025. The decrease of $0.6$1.1 million was primarily attributed to decreasesa decrease in spend in salaries of $0.4$0.3 million ($0.2 million in Beyond Air and $0.3$0.1 million in Beyond Cancer,Cancer), partiallystock-based offsetcompensation bycosts increase of $0.1$0.2 million in NeuroNos),Beyond Air, pre-clinical studies $0.2 million in NeuroNos, clinical studies $0.2 million in Beyond Air, and a reduction in Gen II device development costs of $1.1 million, partially offset by increased stock-based compensation costs $1.2 million ($1.6$0.2 million in Beyond Cancer partially offset by decrease of $0.4 million in Beyond Air).Air.

Other expense for the ninethree months ended DecemberJune 31,30, 20252026 were $2.1$1.5 million as compared to other expense of $3.1$0.5 million for the ninethree months ended DecemberJune 31,30, 2024.2025. The decreaseincrease in expense of $1.2$1.0 million was attributed primarily to an increase in the priorCompany’s period loss associated with the extinguishment ofoutstanding debt ofand $2.5related million.interest This was partially offset by the change in fair value of the prior year derivative liability of $1.3 million gain compared to the gain of $0.5 million associated with the remeasurement of the Note derivative liability that occurred during the current period.expense.

Net loss attributed to non-controlling interests for the three months ended DecemberJune 31,30, 2025,2026, was $0.3$0.2 million, compared to $0.3$0.4 million for the three months ended DecemberJune 31,30, 2024. Net loss attributed to non-controlling interests for the nine months ended December 31, 2025, was $1.0 million, compared to $1.8 million for the nine months ended December 31, 2024.2025. Non-controlling interests represent 20% of the netminority lossinterest percentage of our Beyond Cancer subsidiaryand andNeuroNos subsidiaries at the applicable ownership structure during eachthe quarterly reporting period of the net loss of our NeuroNos subsidiary.period.

Net loss attributed to common stockholders of Beyond Air, Inc for the three months ended DecemberJune 31,30, 2025,2026, was $7.3$7.9 million or a loss of $11.00 $0.85 per share, basic and diluted. Our net loss attributed to common stockholders of Beyond Air, Inc for the three months ended DecemberJune 30, 2025 31, 2024 was $13.0$7.7 million or a loss of $2.96$30.67 per share, basic and diluted.

Below is a summary of our cash flows activities for the ninethree months ended DecemberJune 31,30, 20252026 and DecemberJune 31,30, 20242025:

For the ninethree months ended DecemberJune 31,30, 20252026, the net cash used in operating activities was $13.2$4.9 million which was primarily due to our net loss loss of $23.9$8.2 million, which includes $4.9$1.1 million of stock-based compensation, $2.4$0.8 million of depreciation and amortization, and $1.3$0.5 million million of paid in kind interest and amortization of debt discount associated with the Loan Agreement, $0.5 million provision for inventory losses, and $0.4 million loss on disposal of fixed assets, in addition to $0.9 million in prepayments and other assets.Agreement.

For the ninethree months ended DecemberJune 31,30, 2024,2025, the net cash used in operating activities was $31.2$4.5 million which was primarily due to our net loss loss of $40.4$8.1 million, which includes $9.0$1.6 million of stock-based compensation, $2.5 million costs related to the extinguishment of the Loan and Security agreement with Avenue Capital Management II, L.P., as administrative agent and collateral agent, Avenue Venture Opportunities Fund, L.P. and Avenue Venture Opportunities Fund II, L.P. $2.2$0.8 million of depreciation and amortization, $1.6$0.6 million in prepayments and other assets, $0.9and $0.4 million of paid in kind interest and amortization of debt discount,discount offsetassociated by $ 4.5 million of accrued expenses (which included ($4.5) million ofwith the payment of the finalLoan tranche with Circassia Limited and its affiliates 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.Agreement.

For the ninethree months ended DecemberJune 31,30, 2024,2026, net cash provided by investing activities was $12.3$0.5 millionmillion. whichIn wasthe mainlythree attributablemonths toended June 30, 2026, the Company redeemed a net redemption$0.6 million of investmentsexcess cash in high quality, short term, U.S. dollar denominated marketable securitiesequities with ofhigh $16.7 millionliquidity and invested $4.4$0.2 million for the purchase of property and equipment, mainly LungFit PH devices.

Net cash provided by financing activities for the ninethree months ended DecemberJune 31,30, 2025 was $24.2$4.1 million, mainly from the issuance of common stock stock in connection with the At-The-Market Offering Sales Agreement with BTIG, Inc (the “2025 ATM”) of $8.1$2.4 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 Additionaladvanced Loansfinancing to the Company from a related party, a director of the Company who is also an existing lender under under its Loan Agreement. Further, the Company entered into the Note Purchase Agreement with Streeterville, which provided for the issuance of the Note in the principal amount of $12.0 million, partially offset by $1.0 million of fees paid at closing.

We have generated revenue of $10.7 million from the sale of products to date. We had an operating cash flow decrease of $13.2$4.9 million for the ninethree months ended DecemberJune 31,30, 20252026 and we have experienced an accumulated loss of $309.3$327.5 million since inception through December 31,June 2025.30, 2026. As of DecemberJune 31,30, 2025,2026, we had cash, cash equivalents and marketable securities of $11.7$9.8 million and $6.2$5.4 million in restricted cash.

Management is confident that the efforts to arrange financing as described below,financing, while not assured, will enable them to meet the Company’s obligations.