NASDAQ: XAIR

●
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 and oxygenation

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 recently completed a 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 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 payments based on clinical, regulatory and sales
milestones.

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 NeuroNOS team. Beyond Air
has 84.75% ownership in NeuroNOS.

6

Our
approved commercial product and development pipeline of product candidates is shown in the tables below:

7

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.

In
November 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 and oxygenation

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
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. Since receiving CE Mark in late November 2024, we have received regulatory approvals in
more than 27 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 2027 and beyond from these and
future partnerships.

A PMA supplement to the US FDA for the expansion of the label to include certain cardiac surgeries was withdrawn
in favor of our submission of our second generation LungFit® PH II. The LungFit® PH II PMA supplement was
submitted to the FDA in June 2025. LungFit® PH II is smaller, lighter, and fully transport-ready. The ability of the device
to be used in air and ground transportation significantly increases our addressable market compared to our first generation product. We
believe the estimated total addressable market for inhaled NO in the U.S. is approximately $350 million and worldwide to be approximately
$700 million or greater. We believe the approval and subsequent launch of the LungFit® PH II will equip our commercial
organization to become the market leader in the U.S. in the near-term.

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 7.1 million deaths worldwide reported as of March 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.

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.

8

We
presented results from the pilot clinical trial at the 32nd 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 terminate this study.

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 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 aforementioned
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.

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Ultra-High
Concentration NO (UNO) in solid tumors through majority-owned affiliate Beyond Cancer.

In
the fourth calendar quarter of 2021, Beyond Cancer, our majority-owned 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, and regulatory progress, and will
pay Beyond Air a single-digit royalty on all future revenues.

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 as of February 2, 2026.

A
Phase 1b trial protocol was approved by the Israeli Ministry of Health (IMOH) in December 2024. The initiation of the study
is pending future funding.

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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 three-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 and $0.2 million was raised in the private placement offering during the third and fourth calendar quarter
of 2025, respectively. In total, the investors purchased a 15.25% equity ownership in NeuroNos, while Beyond Air maintained 84.75% equity
ownership. The funding is being used to accelerate ongoing preclinical work,
including IND-enabling studies as well as for general corporate purposes.

In April 2025, the FDA granted
Orphan Drug Designation (“ODD”) to NeuroNos’ investigational therapy, BA-102, for the treatment of Phelan-McDermid
Syndrome (“PMS”), a syndrome associated with ASD. PMS is a rare genetic disorder most commonly caused by deletions or mutations
affecting the SHANK3 gene leading to a range of symptoms, including global developmental delay, intellectual disability, severe speech
impairments, and in many cases features of ASD.

In September 2025, the FDA
granted ODD to NeuroNos’ investigational therapy, BA-101, for the treatment of Glioblastoma (“GBM”). GBM is an
aggressive primary brain tumor with limited treatment options and poor prognosis under current standard-of-care approaches.

Background
and NO Mechanism of Action

NO
is recognized as a vital molecule involved in many physiological and pathological processes. NO is naturally produced by the body’s
immune system to provide a first line of defense against invading pathogens. It is a powerful molecule with a short half-life of a few
seconds in the blood, enabling it to be cleared rapidly from the body. NO has been shown to play a critical role in the function of several
body systems. For example, as vasodilator of smooth muscles, NO enhances blood flow and circulation. In addition, NO is involved in regulation
of wound healing and immune responses to infection. The pharmacology, toxicity and other data for NO in humans is generally well known,
and its use has been approved by the FDA as a vasodilator. The precise effect of inhaled NO is dependent on concentration, oxidation
state and type of pathogen.

NO
has multiple immunoregulatory and antimicrobial functions that are likely to be of relevance to inhaled NO therapy. In vitro studies
suggest that NO possesses anti-microbial activity against common bacteria, gram positive and gram negative, as well as mycobacteria,
fungi, yeast, parasites and helminths. It has the potential to eliminate multi-drug resistant strains of the above. Anti-viral activity
covers respiratory viruses such as influenza, corona viruses, RSV and others. In healthy humans, NO has been shown to stimulate mucociliary
clearance, and low levels of nasal NO correlate with impaired mucociliary function in the human upper airway. Unlike other inhaled drugs,
NO is also a smooth muscle relaxant and avoids the concomitant bronchial constriction often associated with inhaled antibiotics and mucolytics.
A potential benefit of these multiple mechanisms may be that in addition to treating lung infections in CF patients, this suggests that
NO may be useful in directly treating the mucus caused by CF, which is the principal manifestation of the disease.

Nitric
Oxide and Infection

NO
possesses broad-spectrum anti-microbial activity acting against bacteria, fungi and viruses. NO is produced at high output as part of
the innate immune response. NO and its by-products (for example, reactive nitrogen species (“RNS”)) are responsible for the
process of killing microorganisms within white blood cells called macrophages and in organs such as the lungs and other mucolytic tissues.

More
than a decade ago, several research groups showed that NO and RNS possess anti-viral activity and affect several viruses including coxsackievirus,
RSV, influenza, severe acute respiratory syndrome (SARS), coronavirus, rhinovirus, herpes simplex virus, Epstein-Barr virus (EBV), and
others. NO has also been shown to be useful in preventing bacterial growth on surfaces.

Continuous
exposure to 150 ppm NO and above, especially in the lungs, may have side effects and cause damage to host cells. Intermittent exposure
to NO in cycles retains NO anti-microbial activity both in vitro and in animal model of infection. Exposure of bacteria to concomitant
30-minute treatments with 160 ppm NO resulted in a significant reduction in bacterial load. A similar dose has been shown to reduce viruses
(common influenza) by 30-100% in a canine kidney infection model. In vivo, in a pneumonia model in rats, inhaled 160 ppm NO, for 30 minutes,
every 4 hours, resulted in significant reduction in bacteria counts in the lungs, without affecting the body’s defense mechanisms,
and without any other adverse effect. In addition, we believe a daily dose of 160 ppm of NO can treat bovine respiratory disease (BRD)
in cattle.

Importantly,
several studies report synergy between NO and antibiotic drugs. Adjunctive treatment combining NO together with inhaled tobramycin antibiotics
or other anti-microbial agents has been shown to greatly enhance the efficacy of the antibiotics in dispersing P. aeruginosa biofilms
and to increase their ability to elicit anti-microbial activity. These studies suggest that adjuvant treatment combining NO with antibiotics
might have a beneficial role by reducing bacterial infectivity, and therefore reduce the dependency on antibiotics.

Beyond
Air Technology

We
have developed the Beyond Air NO generator and delivery system which we call LungFit®, a novel and precise delivery system
that uses NO generated from ambient air with a novel NO generator, the ionizer. Our system provides continuous monitoring and control
of the gaseous content administered during intermittent and continuous NO inhalation treatments, as well as a precise and reliable monitoring
system that is able to monitor patient status and alert medical staff to any adverse effects.

11

The
LungFit® system is innovatively designed to provide patients with a gaseous dose of NO (ranging from 0.5 ppm up to 400
ppm) combined with ambient air. The gaseous blend is supplied to the patient via a ventilator, face mask, or similar apparatus. LungFit®
is designed to minimize the time that NO is mixed with oxygen and air. The system is also designed to continuously monitor inhaled
NO concentration, NO2 concentration and oxygen. A dedicated screen allows for monitoring of the gas mixture. Further, our
approved product and product candidates resemble other inhalation systems, making them user friendly, with operation and maintenance
that we believe will be immediately familiar to medical staff. Our LungFit® system has been manufactured at commercial
scale with a contract manufacturer.

When
programmed for lung infections, the LungFit®, is designed to specifically deliver NO at concentrations of 150 ppm and
higher. We believe that the LungFit® has a number of advantages over other NO formulation delivery systems. For example,
it is:

●

optimized
to deliver 150 ppm and higher of NO, whereas existing NO delivery systems on the market consist of a maximum deliverable NO concentration
of 80 ppm;

●

equipped
with a monitoring system that continuously monitors system parameters (e.g., NO, NO2 and inhaled fraction of inspired
oxygen (“FiO2”) concentrations);

●

capable
of providing constant flow of NO, which we believe allows it to adequately cover the surface area of the lung to eliminate bacteria,
viruses, fungi and other microbes;

●

programmable
and able to deliver different dosage regimens for a wide range of lung infections;

●

able
to generate NO from ambient air, eliminating the need for the use of high-pressure cylinders;

●

designed
to be used by the patient, thus convenient and portable; and

●

administered
non-invasively through a facial mask, which has the potential to address severe infections in large, underserved chronic-care markets,
such as CF and COPD.

We
believe that our solution has the potential for a number of additional benefits and opportunities, as follows:

●

The
antimicrobial and multiple other properties of the NO molecule delivered to the lungs suggest the potential for application in a
wide range of respiratory diseases. In contrast to the often arduous and slow drug discovery process for small molecules, proteins,
and peptides, the use of NO in medicine is well-known, and therefore the identification of conditions where NO provides benefits
has been, and we expect will continue to be, much simpler, quicker and less costly.

●

The
FDA approved the use of NO as an inhaled drug for the treatment of PPHN in 1999. More than 20 years of clinical experience in the
delivery, monitoring and understanding of NO in the clinical environment for vascular uses has been documented.

●

NO
is naturally produced by the immune system and acts as a first line of defense against infectious diseases. We believe therapeutic
use of NO for viral and bacterial co-infections would potentially improve the success of antimicrobial and anti-viral treatments
by mimicking the body’s natural defense mechanism and thereby directly reduce viral infectivity, as well as antibiotic drug
resistant bacteria.

●

NO
is used naturally by the body for vasodilation and we believe that the benefits to patients with various medical conditions will
be seen via vasodilation when delivered with our system.

NitricGen
License

On
January 31, 2018, the Company entered into a definitive agreement to acquire a global, exclusive, perpetual, transferable license to
the eNOGenerator and associated critical assets including intellectual property, know-how, trade secrets and confidential information
(the “License”) from NitricGen Inc. (“NitricGen”). The eNOGenerator is a novel and precise delivery system that
uses NO generated from ambient air with a novel NO generator.

The
Beyond Air LungFit® system, which incorporates the eNOGenerator, has been designated as a medical device by the FDA. The
eNOGenerator can generate NO on demand for delivery to the lungs at concentrations ranging from 0.5 to 400 ppm. With the License, the
Company expects that it will be able to target all conditions requiring NO at any concentration, regardless of the need for intermittent
or continuous dosing.

Under
the terms of the License, the Company agreed to pay NitricGen an aggregate of $2 million in up-front, clinical, and regulatory milestone
payments, with the majority pertaining to regulatory milestones, as well as royalties on net sales of the delivery system containing
the eNOGenerator at a percentage in the low-single digits. As partial consideration for the License, we issued to NitricGen warrants
to purchase 100,000 shares of our common stock at an exercise price of $6.90 per share. To date, $1.7 million has been paid for milestones
that were earned. As of March 31, 2026 the remaining future milestone payments totaled $0.3 million.

Strategies

Our
objective is to build a leading medical device and biopharmaceutical company that develops and commercializes patented and
proprietary products for the treatment of respiratory infections and diseases, with an initial focus on the treatment of PPHN, NTM
and severe infections in COPD patients, among others. We are exploring and testing the effects of NO on solid tumors through our
subsidiary, Beyond Cancer. Additionally, we are exploring the development of nNOS inhibitors for the treatment of ASD and other
neurological conditions through our subsidiary, NeuroNos. If our clinical trials for our product candidates are successful, we expect to seek certification or
marketing approval from the FDA and other worldwide authorities and notified regulatory bodies.

12

Cystic
Fibrosis and NTM Clinical Development

In
2011, a prospective, open label, controlled, single-center pilot safety study was conducted on ten healthy adults between 20 and 62 years
of age. The data were published in the Journal of Cystic Fibrosis in 2012. Subjects received 160 ppm NO for 30 minutes, five times a
day, for five consecutive days via direct inhalation to the lungs using a prototype delivery system. The primary objective of the study
was to determine the effect of inhaled 160 ppm NO on pulmonary function tests and characterize the relationship between high-concentration
NO administration and MetHb – a form of hemoglobin that is a biproduct of NO and hemoglobin that cannot bind oxygen – and
establish a MetHb safety threshold level to assess adverse events associated with the treatment. Secondary objectives of the study were
to assess the changes in cytokine levels. Multiple safety markers were continuously monitored including: NO levels, NO2 (a
biproduct of NO and O2 that can be toxic at high concentrations), FiO2, as well as MetHb and oxygen saturation
(“SaO2”). Vital signs, lung function, blood chemistry (including nitrite/nitrates), hematology, prothrombin time,
inflammatory cytokine/chemokines levels and endothelial activation (angiopoietin ratio) were also closely monitored. All individuals
tolerated the NO formulation treatment courses well. No SAEs occurred. The maximum amount of air one can forcefully exhale in one second,
known as forced expiratory volume in one second (“FEV1”) and other lung function parameters, serum nitrites/nitrates, prothrombin,
pro-inflammatory cytokine and chemokine levels did not differ between baseline and day 5, while MetHb increased during the study period
by an average of 0.9%, as expected. These data suggest that inhalation of 160 ppm NO for 30 minutes, five times a day, for five consecutive
days is well tolerated in healthy individuals.

In
2014, we completed a pilot open label, multi-center study in nine CF patients (≥10 years old). Patients received intermittent (30
minutes, three times a day) inhalation of 160 ppm NO formulation, five days a week, over a two-week period. The study was performed in
two centers, Soroka Medical Center and Schneider Children’s Medical Center of Israel. The primary endpoints of the study were to
determine the MetHb percentage, adverse events associated with inhaled NO and the percentage of subjects who prematurely discontinued
the study due to adverse events (“AEs”) and/or SAEs, or for any other reason. AEs were reported by five (55.5%) subjects.
There were no SAEs related to NO therapy, no treatment-related withdrawals due to AEs, and no deaths. AEs considered by the investigator
as possibly or probably related to treatment were reported for two (22.2%) subjects. There were no AEs of MetHb elevation >5% or NO
2 elevation >5 ppm (study safety threshold of MetHb and NO2, respectively). In total, seven cases of hemoptysis
were reported in two subjects and all events were mild in severity. There was no cumulative effect of MetHb exposure during the study.
The maximum MetHb level reported was 4.6%. Several secondary efficacy analyses were conducted in this study, and though the study was
not powered for efficacy, results show various positive effects of the treatment regime. Bacterial and fungal sputum load analysis results
were highly variable, though marked reductions of Methicillin-sensitive Staphylococcus aureus (“MSSA”), Achromabacter, P.
aeruginosa, and Aspergillus were seen in several subjects. These results suggest non-specific targeting of bacteria and fungi that
commonly manifest in CF patients. In subjects with systemic inflammation (CRP >5 mg/mL) at baseline, CRP levels decreased over the
treatment period, showing the effect of NO in the reduction of systemic inflammation. There were no statistically significant or clinically
relevant changes in FEV1 over time, and lung function indices also remained relatively constant throughout the study duration.

In
2016, Rambam healthcare campus in Israel conducted a compassionate use treatment for two patients with CF who suffer from M, abscessus
lung infections. The data were published in the Pediatric Infectious Disease Journal in 2017. The NO treatment regime, as well as
the device for this treatment, was supplied by BA Ltd. (as defined below), our wholly owned subsidiary. Patients received intermittent
30-minute treatments of 160 ppm NO, with two different regimes including hospitalization (5 times a day) and ambulatory treatment (2-3
inhalations a day). Treatment was well tolerated with no evidence of any serious side effects. We observed significant improvement in
sputum production (up to 5-10 times more sputum), and subjective improvement in the well-being of both patients. Significant reduction
in systemic inflammation was observed in the first patient, as observed by reduction of CRP (C-reactive protein, a systemic inflammation
marker that rises in response to inflammation) levels during treatment. In addition, the first patient had a 2 log (100-fold) reduction
in M. abscessus during treatment (an effect that was lost after the treatment regime changed to ambulatory). The second patient
showed a significant increase in the 6-minute walk (“6MW”) test and the sputum culture became negative, which is consistent
with eradication of M. abscessus. Further information is needed, but we believe these results suggest that the treatment of M.
abscessus with high-concentration inhaled NO is effective.

In
2017, we treated one patient with CF who suffered from NTM infections (specifically, M. abscessus) under compassionate use in
the United Sates at the National Heart, Lung and Blood Institute with our generator based NO delivery system. The patient saw improvements
in 6MW, FEV1, most Quality-of-Life measures and had no SAEs. The bacteria was not eradicated. The patient requested to be treated again
and this treatment commenced in February 2018. A total of 38 treatments were administered over 8 days, 29 of them at a concentration
of 240 ppm, with no SAEs believed to be related to NO reported.

Additionally
in 2017, we completed a single-arm, open-label Pilot trial in nine patients with M. abcessus lung disease, who were refractory
to standard-of-care (“SOC”). The patients were treated with inhaled NO at a concentration of 160 ppm for 30 minutes, in addition
to treatment with SOC. Our inhaled NO treatment was administered intermittently five times per day over a 14-day period, followed by
a seven-day period with three treatments per day. The primary endpoint of safety, as measured by NO-related SAEs, over the 21-day treatment
period was met with no SAEs reported. Secondary endpoints of a 6MW test FEV1, Quality of Life and M. abscessus load in sputum
all trended positively. 6MW showed an increase of >40 meters at the end of treatment at day 21 versus baseline and an increase of
>25 meters on day 81 (60 days after the cessation of therapy). The mean percentage change in FEV1 at day 21 and day 51 (30 days after
the cessation of treatment) was > 3.5% with FEV1 returning to baseline at day 81 (60 days after the cessation of therapy). At day
81 (60 days after the cessation of therapy) bacterial load was 65% lower than baseline. 1 of 9 patients saw culture conversion. This
study was published in the Journal of Cystic Fibrosis in 2019.

In
2018, an additional CF patient infected with M. abscessus was treated over a 4-week period with 76 of 84 treatments at 250 ppm
NO in Israel at Soroka Medical Center. The patient saw improvements in 6MW, FEV1 and most Quality-of-Life measures. The bacteria were
not eradicated. Importantly, there were no SAE’s reported and all treatments were completed without incident.

13

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 $2.2 million from the CFF to fund this study and advance the clinical
development of inhaled NO to treat NTM pulmonary disease. The trial enrolled both CF and non-CF patients infected with MAC, M. abscessus
or any strain of NTM. The study 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 begun 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 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 study was evaluating safety, quality of life, physical function,
and bacterial load among other parameters. The mean age of subjects was 62.1 years (range: 22 – 82 years) with the majority female
(80%), a distribution consistent with real-world NTM disease. All 15 subjects 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 study. Patients were followed up for 12
weeks after the 12-week treatment period was completed.

The
Company presented positive results at the 2022 CHEST annual meeting, further supporting development of intermittent high dose NO for
the treatment of NTM. The study demonstrated that high dose NO treatment was safe and well-tolerated in both the home and hospital
settings. During the 10-week at-home treatment period of the study, 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 subject achieved culture conversion with three consecutive negative sputum samples. We
anticipate having discussions with the FDA in calendar year 2026 with respect to commencing a pivotal clinical trial.

Our
program in COPD is in the preclinical stage and will move forward subject to obtaining additional financing.

In
addition to further supporting development of intermittent high dose NO for the treatment of NTM, we believe this study breaks new ground
in the development of NO therapy by showing the potential for the Company’s at-home generator-based system to be used safely and
consistently by this patient population in a real-world setting.

VCAP
and BRO Clinical Development

In
2014, we completed a double blind, randomized Pilot study for infants with bronchiolitis (n=43) for which the data were published in
the Pediatric Pulmonology Journal in 2017. The study was performed at Soroka University Medical Center in Israel. Forty-three infants
between the ages of two to 12 months diagnosed with bronchiolitis were randomly assigned to either the treatment group or the control
group. The treatment group comprised 21 subjects who received intermittent (30 minutes, five times a day) inhalation of 160 ppm NO formulation,
in addition to supportive O2 treatment for up to five days. The control group, 22 subjects, received ongoing inhalation of
the supportive O2 treatment. Primary endpoints included determination of the MetHb levels, adverse events associated with
the inhaled NO formulation and proportion of subjects who prematurely discontinued the study. Baseline clinical score, indicating disease
severity at screening, was similar between treatment groups (~8). Results were encouraging, with similar overall incidence of AEs between
the treatment groups. Out of 43 patients, 39 (~90%) completed the study per protocol (“PP”), with similar percentages (90%)
for both the control and the treatment groups, individually. Only one subject from the treatment group discontinued treatment due to
an adverse event, namely – repeated MetHb levels above 5%. Adverse events were reported by 23 (53.5%) subjects overall, with ten
(47.6%) subjects in the NO group reporting a total of 22 AEs, and 13 (59.1%) subjects in the control group reporting a total of 22 AEs.
SAEs were reported by four (19.0%) subjects in the NO group and four (18.2%) in the standard treatment group. There were no treatment-related
SAEs in the NO treatment group.

In
the NO group, six (28.6%) subjects had any MetHb measurement >5% during the study treatment period, and three of these subjects had
more than one MetHb >5%. The maximum MetHb level was 5.6% in one subject in the NO group. There was no cumulative effect of MetHb
exposure during the study. The MetHb levels in this study were defined to <5% as a safety measure, though previous findings have shown
that higher levels (6.4%) are non-toxic in children. Secondary and exploratory analyses were performed, and results show positive impact
of the treatment regime. In a subgroup of subjects that stayed at the hospital at least 24 hours (LOS >24 hours), a statistically
significant treatment benefit of NO versus standard treatment was demonstrated. Mean results for subjects with LOS > 24 hours show
that LOS was shortened by approximately 34% in the NO group compared to the standard treatment group, with a one-day difference between
the groups (PP, N=24). Time to normal oxygenation (SaO2 of 92%) was shortened by approximately 44% (27.75 hours) in the NO group compared
to the standard treatment group (PP, N=24). An 80% improvement in time to clinical score (indicating improvement in disease severity)
and time to normal oxygenation (92%) was observed in favor of the NO group (PP, N=24).

In
2018 we completed a second pilot study in bronchiolitis in 6 centers in Israel. The data were published in Nature in 2020. The prospective,
randomized, double blind, controlled pilot study enrolled 67 patients, aged 0-12 months, who were hospitalized due to bronchiolitis.
The patients received either SOC (typically oxygen and hydration) or SOC plus inhaled NO at a concentration of 160 ppm for 30 minutes
5 times per day for up to 5 days. The primary endpoint of hospital LOS was met with a 26.7-hour reduction in hospital length of stay
demonstrated (p=0.04). Secondary endpoints of time required to achieve a clinical score of 5 or less on the modified Tal score and time
required to achieve SaO2 of 92% or greater showed improvement versus the SOC. There were no issues with NO2 or
MetHb and no SAEs were recorded.

In
2020 we completed a third pilot study in bronchiolitis in 8 centers in Israel and presented the data at 2020 CHEST annual meeting. The
prospective, randomized, double blind, controlled pilot study enrolled 89 patients (ITT n=87), aged 0-12 months, who were hospitalized
due to bronchiolitis. The patients were randomized 1:1:1 to receive either SOC (typically oxygen and hydration) or SOC plus inhaled NO
at 85 ppm or SOC plus inhaled NO at 150 ppm for 40 minutes 4 times per day for up to 5 days. There were no SAEs related to NO therapy.
Efficacy results are shown in the table below.

150 ppm vs. 85 ppm

Hazard Ratio (p-value)
150 ppm vs. SST

Hazard Ratio (p-value)

Fit for Discharge
2.11 (0.041)
2.32 (0.049)

Hospital Length of Stay (LOS)
2.01 (0.046)
2.28 (0.043)

Oxygen Saturation of > 92%
2.15 (0.056)
2.62 (0.039)

We
plan to seek certification or regulatory approval for our remaining current product candidates and, if approved, we expect they will
be marketed as medical devices.

If
we reach the commercialization stage for any of our remaining product candidates, we expect that we will collaborate with companies outside
the U.S. for all indications. We are still determining whether to attempt to collaborate for any indication in the U.S. We are commercializing
LungFit® PH in the U.S. ourselves and expect to partner with third parties to commercialize LungFit® PH
outside the U.S.

14

Our
PreClinical Results to Date for LungFit®

We
have completed 4 separate toxicology studies in animals.

●

Rats:
30 days of intermittent treatments with LungFit® at 400 ppm NO showed no observations (differences) between control
rats and treated rats on observation during the treatment period prior to sacrifice and no observations on histopathology

●

Rats:
12 weeks of intermittent treatments with LungFit® at 250 ppm NO showed no observations (differences) between control
rats and treated rats on observation during the treatment period prior to sacrifice and no observations on histopathology

●

Dogs:
12 weeks of intermittent treatments with LungFit® at 250 ppm NO showed no observations (differences) between control
dogs and treated dogs on observation during the treatment period prior to sacrifice and no observations on histopathology

●

Rats:
Geno toxicology study of intermittent with LungFit® NO at 200 – 400 ppm showed a non-genotoxic response
at all concentrations

Additional
Programs

Beyond
Cancer’s research data has shown that UNO has anticancer properties and elicits an immune response from the host. Beyond Cancer
utilizes an intratumoral UNO technology as a gas delivery of NO at high concentrations to tumors to induce an immune response. Gas based
intratumoral therapies for the treatment of cancer are considered novel and new medical science. Beyond Cancer’s efforts are currently
also focused on utilizing UNO in combination with Keytruda, a PD-1 inhibitor or other PD-1 or PDL-1 inhibitors as a treatment for cancers.
To date, no such gas-based therapy has been approved for commercialization by the FDA or other regulatory agencies.

NeuroNos
has entered into an agreement with Yissum Research Development Company of the Hebrew University of Jerusalem, LTD. 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 currently no FDA approved therapies utilizing nNOS inhibitors specifically for
the treatment of ASD.

Competition

The
biotechnology, pharmaceutical and medical device industries are highly competitive. There are many pharmaceutical companies, biotechnology
companies, medical device companies, public and private universities and research organizations actively engaged in the research and
development (“R&D”) of products that may be similar to our approved product or product candidates. We are aware of several
companies currently developing and selling NO therapies for various indications such as hypoxic respiratory failure (HRF). For example,
Mallinckrodt commercializes INOMAX® (nitric oxide) for inhalation, which is approved for use to treat newborns suffering
from hypoxic respiratory failure (“HRF”)-PPHN, in the U.S., Canada, Australia, Mexico and Japan. Linde Group markets a generic
version of the Mallinckrodt offering with their delivery system called NOxBOX®. The Linde Group has marketing rights to
INOMAX® in Europe. Air Liquide sells a similar product in Europe, called KINOX™, together with their delivery platform
called SoKINOX™, for the treatment of pulmonary hypertension of the newborn. In Europe, EKU, International Biomedical, Cahouet
and ITC each have a device that delivers nitric oxide. VERO Biotech LLC received FDA approval
for their delivery system GENOSYL DS for HRF associated with PPHN in 2019, and received FDA approval for a third generation of that delivery
system in 2023. In addition, other companies may be developing inhaled NO delivery systems at various concentrations. Novan Inc. has
recently received approval for a nitric oxide-based prescription treatment called berdazimer for molluscum, a contagious skin infection.
SaNOtize has an NO nasal spray that has received approval in India, Israel and eight other countries for preventing COVID-19 after exposure.
Third Pole has reported the development of an NO generator and delivery system, but we are not aware of any display of any product at
any medical/scientific conference in recent years. Our patents surrounding LungFit® have priority date over those of Third
Pole. NovLead Biotechnology (Nanjing, China) has a device that produces NO through a process of passing an electric current through an
electrolyte solution and Shenzhen Respomed Medical Technology (Shenzhen, China) has developed a machine that uses an electric charge
to generate nitric oxide.

Some
of our competitors, either alone or through their strategic partners, might have substantially greater name recognition and financial,
technical, manufacturing, marketing and human resources than we do and greater experience and infrastructure in the research and clinical
development of pharmaceutical products, obtaining FDA and other regulatory approvals of those products and commercializing those products
around the world.

As
it relates to Beyond Cancer’s programs, no such gas-based therapies have been approved for commercialization by the FDA or other
regulatory agencies to date. Similarly, as it relates to NeuroNos, there are currently no FDA approved therapies utilizing nNOS inhibitors
specifically for the treatment of ASD.

15

Manufacturing
and Distribution

We
have contracted with third-party contract manufacturers, Spartronics LLC (“Spartronics”), Plexus Corp.
(“Plexus”), and Medisize Ireland Limited (“Medisize”) who have completed a substantial portion of the
commercial manufacturing process for our LungFit® PH system. Spartronics is the contract manufacturer and maintenance provider of our
first generation LungFit® PH device, Plexus is the contract manufacturer of our second generation LungFit® PH device and will
be the contract manufacturer of all devices beginning in April 2027.

In
addition, we will be reliant on our partners for commercial manufacture of our systems for both clinical studies and commercial
supply. In the year ended March 31, 2026, we purchased approximately 74% of our materials from Spartronics.

We
have a central warehouse in Atlanta, Georgia for the staging of products to be deployed to forward-stocking locations (“FSL”)
in major cities close to our potential customers. We contract with third-party logistics providers to manage both the central warehouse
and the FSLs. FSLs allow us to supply LungFit® devices and consumables in a timely manner to customers.

We
market directly to our customers through our field sales team. A separate team of clinical specialists provides the training necessary
to use the devices. Invoicing and cash collection are managed by our Garden City, New York headquarters.

Intellectual
Property

We
own or have exclusively licensed patents, pending patent applications, know-how and trade secrets that relate to our NO generator, NO2
filtration, delivery systems, devices configured for delivering NO to patients by inhalation, methods of exposing patients to inhalation
of NO, and methods for treating subjects in need of NO inhalation.

We
are party to a global, exclusive, transferable license agreement with NitricGen for the eNOGenerator, its components, and all associated
patents and know how related thereto. Additionally, we have a broad intellectual property portfolio directed to our product candidates
and mode of delivery, monitoring parameters and methods of treating specific disease indications. Our intellectual property portfolio
consists of issued patents and pending applications, which includes patents we acquired pursuant to the exercise of an option in 2017
granted to us by Pulmonox Technologies Corporation (“Pulmonox”).

On
August 31, 2015 the Company entered into an agreement with Pulmonox (the “Option Agreement”) whereby we acquired the option
to purchase certain intellectual property assets, including Pulmonox’s rights in 17 issued U.S. patents, including eight patents
jointly owned with CareFusion which are directed to:

●

devices
and methods for delivering NO formulations to a patient at steady and alternating concentrations (80-400 ppm), including intermittent
delivery of NO;

●

a
device and methods for treatment of surface infections; and

●

use
of NO as a mucolytic agent and for treatment and disinfection of biofilms.

We
exercised the Option in January 2017, acquiring Pulmonox’s rights in the patents described above. Upon exercise of the Option,
we became obligated to make certain one-time development and sales milestone payments to Pulmonox, commencing with the date on which
we receive regulatory approval for the commercial sale of the first product candidate qualifying under the agreement. These milestone
payments are almost entirely sales-related and are capped at a total of $87 million across three separate and distinct indications that
fall under the agreement with the majority of them, approximately $83 million, being sales-related based on cumulative sales milestones
for each of the three products. To date, no payments have been made.

Patent
Applications. We have over 40 pending patent applications worldwide, including U.S., foreign and Patent Corporation Treaty (“PCT”)
patent applications.

A
PCT patent application is a filing under the Patent Cooperation Treaty to which the U.S. and a number of other countries are a party.
It provides a unified procedure for filing a single patent application to protect inventions in those countries. A search with respect
to the application is conducted by the International Searching Authority, accompanied by a written opinion regarding the patentability
of the invention. A PCT application does not itself result in the grant of a patent, and the grant of patent is a prerogative of each
national or regional authority where the PCT application is filed during national phase filings.

16

Settlement
Agreement

On
January 23, 2019, we entered into an agreement for commercial rights (the “Circassia Agreement”) with Circassia Limited and
its affiliates (collectively, “Circassia”) for PPHN and future related indications at concentrations of < 80 ppm
in the hospital setting in the United States and China. On December 18, 2019, we terminated the Circassia Agreement. Circassia contended
that the termination was wrongful.

On
May 25, 2021, the Company and Circassia entered into a settlement agreement (the “Settlement Agreement”) resolving all claims
by and between both parties and mutually terminating the Circassia Agreement. 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, starting in 2025, Circassia
began receiving a quarterly royalty payment equal to 5% of LungFit® PH net sales in the U.S. This royalty will terminate
once the aggregate payment reaches $6.0 million. As of March 31, 2026, approximately $0.4 million of royalties have been paid.

Government
Regulation

U.S.
Regulation. In the U.S., the FDA regulates drug and medical device products under the Federal Food, Drug, and Cosmetic Act (“FD&C
Act”), and its implementing regulations. Our products have been designated as devices by the FDA and will be regulated by the Center
for Devices and Radiological Health (“CDRH”). Given that currently approved NO products and delivery systems were approved
either separately (NO drug approval and NO delivery systems cleared as devices) or as drug-device combinations in the United States,
we expect our device to not only be reviewed by CDRH, but also have input from the Center for Drug Evaluation and Research (“CDER”).

FDA
Premarket Clearance and Approval Requirements for Medical Devices. Unless an exemption applies, each medical device commercially
distributed in the United States requires either FDA clearance of a 510(k) premarket notification, authorization of a de novo application,
or approval of a PMA application. Under the FD&C Act, medical devices are classified into one of three classes—Class I, Class
II or Class III—depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory
control needed to ensure its safety and effectiveness. Class I includes devices with the lowest risk to the patient and are those for
which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance
with the applicable portions of the Quality System Regulation (“QSR”) facility registration and product listing, reporting
of adverse medical events, and truthful and non-misleading labeling, advertising, and promotional materials. Class II devices are subject
to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the
device. These special controls can include performance standards, post-market surveillance, patient registries and FDA guidance documents.

While
most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices are required
to submit to the FDA a premarket notification under Section 510(k) of the FFDCA requesting permission to commercially distribute the
device. The FDA’s permission to commercially distribute a device subject to a 510(k) premarket notification is generally known
as 510(k) clearance. Devices deemed by the FDA to pose the greatest risks, such as life sustaining, life supporting or some implantable
devices, or devices that have a new intended use, or use advanced technology that is not substantially equivalent to that of a legally
marketed device, are placed in Class III, requiring approval of a PMA. Some pre-amendment devices are unclassified, but are subject to
FDA’s premarket notification and clearance process in order to be commercially distributed.

510(k)
Clearance Marketing Pathway. To obtain 510(k) clearance, a company must submit to the FDA a premarket notification submission demonstrating
that the proposed device is “substantially equivalent” to a predicate device already on the market. A predicate device is
a legally marketed device that is not subject to PMA, i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendments
device) and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was
found substantially equivalent through the 510(k) process. The FDA’s 510(k) clearance process usually takes from three to twelve
months, but often takes longer. The FDA may require additional information, including clinical data, to make a determination regarding
substantial equivalence. In addition, the FDA collects user fees for certain medical device submissions and annual fees for medical device
establishments.

17

If
the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance
to commercially market the device. If the FDA determines that the device is “not substantially equivalent” to a previously
cleared device, the device is automatically designated as a Class III device. The device sponsor must then fulfill more rigorous PMA
requirements or can request a risk-based classification determination for the device in accordance with the “de novo” process,
which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate
device.

After
a device receives 510(k) marketing clearance, any modification that could significantly affect its safety or effectiveness, or that would
constitute a major change or modification in its intended use, will require a new 510(k) clearance or, depending on the modification,
PMA approval. The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k) or a PMA in
the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination. If the FDA disagrees
with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified
device until 510(k) marketing clearance, authorization of a de novo application, or PMA approval is obtained. Also, in these circumstances,
the manufacturer may be subject to significant regulatory fines or penalties.

PMA
Approval Pathway. Class III devices require approval of a PMA before they can be marketed, although some pre-amendment Class III
devices for which the FDA has not yet required a PMA are cleared through the 510(k) process. The PMA process is more demanding than the
510(k) premarket notification process. In a PMA application, the manufacturer must demonstrate that the device is safe and effective,
and the PMA application must be supported by extensive data, including data from preclinical studies and human clinical trials. The PMA
application must also contain a full description of the device and its components, a full description of the methods, facilities, and
controls used for manufacturing, and proposed labeling. Following receipt of a PMA application, the FDA determines whether the application
is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FFDCA
to complete its review of a PMA application, although in practice, the FDA’s review often takes significantly longer, and can take
up to several years. An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide
recommendations to the FDA as to the approvability of the device. The FDA may or may not accept the panel’s recommendation. In
addition, the FDA will generally conduct a pre-approval inspection of the applicant or its third-party manufacturers’ or suppliers’
manufacturing facility or facilities to ensure compliance with the QSR. PMA devices are also subject to the payment of user fees.

The
FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA application constitute
valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s). A PMA
may include post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions
on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients in the clinical study that supported
the PMA or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market
surveillance when deemed necessary to protect the public health or to provide additional safety and efficacy data for the device in a
larger population or for a longer period of use. In such cases, the manufacturer might be required to follow certain patient groups for
a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions
of approval can result in material adverse enforcement action, including withdrawal of the approval.

Certain
changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the
design performance specifications, which affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA
supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed
to support any changes from the device covered by the original PMA and may not require as extensive clinical data or the convening of
an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes
a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new
generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change
in demonstrating a reasonable assurance of safety and effectiveness. None of our products are currently marketed pursuant to a PMA.

On
November 10, 2020 we submitted a PMA application to the FDA for the use of LungFit® PH in PPHN and subsequently received
PMA approval in June 2022.

18

De-Novo
Pathway. Another pathway, known as de-novo down-classification also can be used for lower risk devices for which there is no existing
product code or predicate device. The Food and Drug Administration Modernization Act of 1997 established the de-novo down-classification
procedure as a new route to market for low to moderate risk medical devices that automatically require a PMA due to the absence of a
predicate device. This procedure allows a manufacturer whose novel device automatically requires a PMA to request down-classification
of its medical device (to allow clearance through the 510(k) pathway) on the basis that the device presents low or moderate risk, rather
than requiring the submission and approval of a PMA application. Manufacturers can request de-novo down-classification directly without
first submitting a 510(k) premarket notification to the FDA and receiving a “not substantially equivalent” determination.
Under this pathway, the FDA is required to classify the device within 120 days following receipt of the de-novo application. If the manufacturer
seeks reclassification into Class II, the manufacturer must include a draft proposal for special controls that are necessary to provide
a reasonable assurance of the safety and effectiveness of the medical device. In addition, the FDA may reject the reclassification petition
if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low
to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed.

Clinical
Trials. Clinical trials are almost always required to support a PMA and are sometimes required to support a 510(k) submission. All
clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s Investigational
Device Exemption (“IDE”) regulations which govern investigational device labeling, prohibit promotion of the investigational
device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If
the device presents a “significant risk,” to human health, as defined by the FDA, the FDA requires the device sponsor to
submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials. A significant risk device
is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting
or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment
of human health, or otherwise presents a potential for serious risk to a subject. An IDE application must be supported by appropriate
data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol
is scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the Company
that the investigation may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires
modification, the FDA may permit a clinical trial to proceed under a conditional approval.

In
addition, the study must be approved by, and conducted under the oversight of, an Institutional Review Board (“IRB”) for
each clinical site. The IRB is responsible for the initial and continuing review of the IDE study, and may pose additional requirements
for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a
specific number of investigational sites with a specific number of patients, as approved by the FDA. If the device presents a non-significant
risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate
approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators
obtain informed consent, and labeling and record-keeping requirements. Acceptance of an IDE application for review does not guarantee
that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data
derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE supplement
must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may
affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.

During
a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting
clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping
and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them. The clinical investigators
in the clinical study are also subject to FDA regulations and must obtain patient informed consent, rigorously follow the investigational
plan and study protocol, control the disposition of the investigational device, and comply with all reporting and recordkeeping requirements.
Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons,
including a belief that the risks to study subjects outweigh the anticipated benefits.

19

Post-market
Regulation. After a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply.
These include:

●
establishment
registration and device listing with the FDA;

●
QSR
requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation
and other quality assurance procedures during all aspects of the design and manufacturing process;

●
labelling
regulations and FDA prohibitions against the promotion of investigational products, or the promotion of off-label (as defined below)
uses of cleared or approved products;

●
requirements
related to promotional activities;

●
clearance
or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would
constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices;

●
medical
device reporting regulations which require that a manufacturer report to the FDA if a device it markets may have caused or contributed
to death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute
to a death or serious injury, if the malfunction were to recur.

●
correction,
removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls
or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FFDCA that may present a
risk to health;

●
the
FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation
of governing laws and regulations; and

●
post-market
surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide
additional safety and effectiveness data for the device.

The
manufacturing processes for medical devices are required to comply with the applicable portions of the QSR, which cover the methods and
the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging,
distribution, installation and servicing of finished devices intended for human use. The QSR also requires, among other things, maintenance
of a device master file, device history file, and complaint files. These requirements impose certain procedural and documentation requirements
upon us and our third-party manufacturers related to the methods used in and the facilities and controls used for designing, manufacturing,
packaging, labeling, storing, medical devices. As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by
the FDA. Following these inspections, the FDA may assert noncompliance with QSR requirements on a Form 483, which is a report of observations
from an inspection, or by way of “untitled letters” or “warning letters” that could cause us or any third-party
manufacturers to modify certain activities. A Form 483 notice, if issued at the conclusion of an FDA inspection, can list conditions
the FDA investigators believe may have violated QSR or other FDA requirements. We cannot be certain that we or our present or any future
third-party manufacturers or suppliers will be able to comply with QSR or other FDA regulatory requirements to the agency’s satisfaction.
Failure to comply with these obligations may lead to possible legal or regulatory enforcement action by the FDA.

The
FDA has broad regulatory compliance and enforcement powers. If the FDA determines that we failed to comply with applicable regulatory
requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:

●
untitled
letters, warning letters, fines, injunctions, consent decrees and civil penalties;

●
unanticipated
expenditures to address or defend such actions;

●
customer
notifications or repair, replacement, refunds, recall, detention or seizure of our products;

●
operating
restrictions, partial suspension or total shutdown of production;

●
refusing
or delaying our requests for regulatory approvals or clearances of new products or modified products;

●
withdrawing
a PMA that has already been granted;

●
refusal
to grant export approval for our products; or

●
criminal
prosecution.

Advertising
and Promotion. The FDA and comparable foreign regulatory authorities closely regulate the post-approval marketing and promotion of
medical devices, including standards and regulations for direct-to-consumer advertising, communications about unapproved uses, industry-
sponsored scientific and educational activities and promotional activities involving the internet. Devices may be marketed only for the
approved or cleared indications and in accordance with the provisions of the approved or cleared label.

20

Healthcare
providers are permitted to prescribe approved devices for “off-label” uses—that is, uses not approved by the FDA and
therefore not described in the product’s labeling. These off-label uses are common across medical specialties. Physicians may believe
that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of
physicians in their choice of treatments. The FDA does, however, impose stringent restrictions on manufacturers’ communications
regarding off-label use. Thus, we may market our products, if approved by the FDA, only for their approved indications, but under certain
conditions may engage in non-promotional, balanced communication regarding off-label uses. Failure to comply with applicable FDA requirements
and restrictions in this area may subject us to adverse publicity and a variety of sanctions, which could harm our business and financial
condition.

Combination
Products. A combination product is the combination of two or more regulated components, i.e., drug/device, biologic/device, drug/biologic,
or drug/device/biologic, that are combined or mixed and produced as a single entity; packaged together in a single package or as a unit;
or a drug, device, or biological product packaged separately that according to its investigational plan or proposed labeling is intended
for use only with an approved individually specified drug, device, or biological product where both are required to achieve the intended
use, indication, or effect.

To
determine which FDA center or centers will review a combination product candidate submission, companies may submit a request for assignment
to the FDA. Those requests may be handled formally or informally. In some cases, jurisdiction may be determined informally based on FDA
experience with similar products. However, informal jurisdictional determinations are not binding on the FDA. Companies also may submit
a formal Request for Designation to the FDA Office of Combination Products. The Office of Combination Products will review the request
and make its jurisdictional determination within 60 days of receiving a Request for Designation.

FDA
will determine which center or centers within the FDA will review the product candidate and under what legal authority the product candidate
will be reviewed. Depending on how the FDA views the product candidates that are developed, the FDA may have aspects of the product candidate
reviewed by the Center for Biologics Evaluation and Research (“CBER”), CDRH, or CDER, though one center will be designated
as the center with primary jurisdiction, based on the product candidate’s primary mode of action. The FDA determines the primary
mode of action based on the single mode of action that provides the most important therapeutic action of the combination product candidate
– the mode of action expected to make the greatest contribution to the overall intended therapeutic effects of the combination
product candidate. The review of such combination product candidates is often complex and time-consuming, as the FDA may select the combination
product candidate to be reviewed and regulated by one or multiple of the FDA centers identified above, which could affect the path to
regulatory clearance or approval. Furthermore, the FDA may also require submission of separate applications to multiple centers.

The
post-market requirements that apply to the cleared or approved product will largely be aligned with the agency center determined to have
primary jurisdiction over the product candidate and that provided marketing authorization, but manufacturers must also comply with certain
post-market requirements with respect to the constituent parts of combination products. In April 2019, FDA published a final guidance
document entitled Compliance Policy for Combination Product Post-Marketing Safety Reporting, which is intended to assist manufacturers
of combination products comply with reporting requirements applicable to such products.

After
issuing marketing authorizations, the FDA has discretion in determining post-approval compliance requirements for combination products.
The FDA has also promulgated regulations pertaining to compliance with certain current good manufacturing practices (“cGMP”)
requirements for drug components as well as QSR requirements for device constituents of a combination product. Other post-market requirements
in the same vein as those described above for medical devices and drugs will also apply, depending on the application type and center
overseeing regulation of the combination product, including:

●
Other
record-keeping requirements;

●
Post-market
adverse event and Medical Device Reporting requirements;

●
Labelling
regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses;

●
Advertising
and promotion requirements;

●
Restrictions
on sale, distribution or use of the product;

●
Requirements
for recalls being conducted and recall reporting;

●
An
order of repair, replacement or refund;

●
Product
tracking requirements; and

●
Post-market
surveillance or clinical trials.

21

Coverage
and Reimbursement. Coverage and reimbursement for medical devices in the U.S. is determined by third-party payors, including Medicare
and Medicaid, commercial health insurers, and managed care organizations. Each payor has a unique process for determining whether to
cover a device for a particular indication and how to set reimbursement rates for the device. A payor can decide to cover a device yet
not provide adequate reimbursement to ensure access to the device. New devices often face significant uncertainty about coverage and
reimbursement. Payors may require additional evidence, beyond the data required for FDA approval, to demonstrate that a device should
be covered for a particular indication or that it should be reimbursed at a higher rate than other technologies. In addition, health
care spending continues to be a concern for federal and state governments, as well as for commercial payors. Governments continue to
debate methods of controlling health care costs, including reductions in reimbursement or additional controls on utilization of new technologies
in Medicare and Medicaid, and commercial payors may similarly seek to limit spending on new devices. Restrictions on coverage and reimbursement
could harm our future revenues and ability to realize an appropriate return on our investment.

Orphan
Drug Designation and Exclusivity. Under the Orphan Drug Act, the FDA may grant orphan drug designation to products that are intended
to treat rare diseases or conditions (i.e., those affecting fewer than 200,000 individuals in the U.S.), or diseases or conditions that
affect more than 200,000 individuals in the U.S. but there is no reasonable expectation that the cost of developing and making the drug
product would be recovered from sales in the U.S. Although orphan drug designation does not convey any advantage in the regulatory review
and approval process, it can provide certain tax benefits and access to certain grants. Additionally, FDA user fees, which can be substantial,
are waived for products that obtain orphan drug designation. Further, if a product with orphan drug designation subsequently receives
FDA approval for the designated disease or condition, the product is generally granted seven years of orphan drug exclusivity, which
(with certain limited exceptions) blocks for seven years FDA approval of another product with the same active ingredient for the same
indication. Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the
same drug for a different disease or condition.

Healthcare
Fraud and Abuse Laws. In addition to the FDA’s ongoing post-approval regulation of devices discussed above, manufacturers are
also subject to several other types of laws and regulations, subject to differing enforcement regimes. In recent years, marketing and
promotional activities regarding FDA-regulated products have come under intense scrutiny and have been the subject of enforcement action
brought by the U.S. Department of Justice and the Office of Inspector General of the Department of Health and Human Services, as well
as state authorities and even private individuals.

Healthcare
providers, physicians and third-party payors play a primary role in the recommendation and selection of medical devices for patients.
Arrangements with third-party payors and customers are subject to broadly applicable fraud and abuse and other healthcare laws and regulations.
Such restrictions under applicable federal and state healthcare laws and regulations include the following:

●
The
federal health care program Anti-Kickback Statute (“AKS”) prohibits, among other things, persons from knowingly and willfully
soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or in return for
purchasing, leasing, ordering or arranging for the purchase, lease or order of any good or service, for which payment may be made,
in whole or in part, under a federal healthcare program such as Medicare and Medicaid. This statute has been interpreted to apply
to arrangements between pharmaceutical or device manufacturers, on the one hand, and prescribers, purchasers and formulary managers
and others on the other. The term “remuneration” has been broadly interpreted to apply to anything of value including,
for example, gifts, cash payments, donations, waivers of payment, ownership interests, and providing any item, service, or compensation
for something other than fair market value. Liability under the AKS may be established without proving actual knowledge of the statute
or specific intent to violate it. Although there are a number of statutory exceptions and regulatory safe harbors to the AKS protecting
certain common business arrangements and activities from prosecution or regulatory sanctions, the exceptions and safe harbors are
drawn narrowly. Practices that involve remuneration to those who prescribe, purchase, or recommend medical device products, including
certain discounts, or engaging such individuals as consultants, advisors and speakers, may be subject to scrutiny if they do not
fit squarely within an exception or safe harbor. Moreover, there are no safe harbors for many common practices, such as educational
grants and reimbursement support programs. Violations are punishable by up to 10 years in prison, criminal fines, administrative
civil monetary penalties and exclusion from participation in federal healthcare programs. Any sales or marketing practices that involve
remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny under the AKS;

22

●
the
federal civil False Claims Act (“FCA”) imposes liability on individuals or entities for, among other things, knowingly
presenting, or causing to be presented, false or fraudulent, claims for payment of government funds, knowingly making, using, or
causing to be made or used a false statement or record material to an obligation to pay money to the government, or knowingly concealing
or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. A claim including
items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA. Actions
under the FCA may be brought by the government or as a qui tam action by a private individual in the name of the government, who
may also share in any monetary recovery. Qui tam actions are filed under seal and impose a mandatory duty on the U.S. Department
of Justice to investigate such allegations. Manufacturers have faced liability under the FCA for providing inaccurate billing or
coding information to customers or promoting a product off-label. FCA liability is potentially significant in the healthcare industry
because the statute provides for treble damages and significant mandatory penalties per false or fraudulent claim or statement for
violations, as well as exclusion from participation in federal healthcare programs;

●
the
federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic
and Clinical Health Act, and their respective implementing regulations (collectively, “HIPAA”), imposes criminal and
civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare
benefit program, including private third-party payors, or knowingly and willfully falsifying, concealing, or covering up a material
fact or making any materially false, fictitious, or fraudulent statement or representation, or using any false writing or document
knowing the same to contain any materially false, fictitious, or fraudulent statement or entry, in connection with the delivery of
or payment for healthcare benefits, items, or services;

●
the
federal Physician Payments Sunshine Act (the “Sunshine Act”) requires applicable manufacturers of devices, biologics
and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with
certain exceptions) to report annually to CMS information related to payments and other transfers of value to physicians, physician
assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives, and teaching
hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

●
analogous
state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements
and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Several states have enacted legislation requiring medical device manufacturers to, among other things, establish marketing compliance
programs; file periodic reports with the state, including reports on gifts and payments to individual health care providers; and/or
register their sales representatives. Some states prohibit certain sales and marketing practices, including the provision of gifts,
meals, or other items to health care providers.

Additionally,
other laws such as the federal Lanham Act and similar state laws allow competitors and others to initiate litigation relating to advertising
claims. If we sell our device outside the United States, it must comply with the Foreign Corrupt Practices Act (“FCPA”) and
local laws of other countries. FCPA is a complex patchwork of laws can change rapidly with relatively short notice.

Environmental
Laws. Elements of our potential products may be classified as hazardous materials, subject to regulation by the Department of Transportation,
the International Air Transportation Association, the International Maritime Organization, the Environmental Protection Agency and the
Occupational Safety and Health Administration, which may impose various requirements pertaining to the way we manufacture, transport,
store, handle and dispose of our products. At this time, we have no material costs associated with environmental laws.

European
Regulation of Medical Devices. In the European Economic Area (“EEA”), we expect our products to be regulated as a medical
device product falling within the scope of EU MDR.

In
the EEA, medical devices must currently comply with the General Safety and Performance Requirements laid down in Annex I to the EU MDR.
Compliance with these requirements is a prerequisite to be able to affix the CE mark on products, without which they cannot be marketed
or sold in the EEA. To demonstrate compliance with the General Safety and Performance Requirements of the EU MDR and obtain the right
to affix the CE mark, medical devices manufacturers must undergo a conformity assessment procedure, which varies according to the type
of medical device and its classification. Apart from low risk medical devices (Class I with no measuring function and which are not sterile),
in relation to which the manufacturer may issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products
with the General Safety and Performance Requirements, a conformity assessment procedure requires the intervention of a notified body,
which is an organization designated by a Competent Authority of an EEA country to conduct conformity assessments. Depending on the relevant
conformity assessment procedure, the notified body would audit and examine the technical documentation and the quality system for the
manufacture, design and final inspection of the medical devices. The notified body issues a CE Certificate of Conformity following successful
completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity
with the General Safety and Performance Requirements. This Certificate and the related conformity assessment process entitles the manufacturer
to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity. Notified bodies
must be accredited by the EEA countries’ accreditation bodies to conduct assessment procedures for medical devices in accordance
with the EU MDR. There are currently a relatively small number of notified bodies that have been accredited to conduct these assessments.
This may delay conformity assessment procedures in the future in the EU.

23

As
a general rule, demonstration of conformity of medical devices and their manufacturers with the General Safety and Performance Requirements
must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal
conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions
of use and that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits
of its intended performance, and that any claims made about the performance and safety of the device (e.g., product labeling and instructions
for use) are supported by suitable evidence. This assessment must be based on clinical data, which can be obtained from (1) clinical
studies conducted on the devices being assessed, (2) scientific literature from similar devices whose equivalence with the assessed device
can be demonstrated or (3) both clinical studies and scientific literature. The conduct of clinical studies in the EEA is governed by
detailed regulatory obligations. These may include the requirement of prior authorization by the competent authorities of the country
in which the study takes place and the requirement to obtain a positive opinion from a competent Ethics Committee. This process can be
expensive and time-consuming.

The
EU MDR repeals and replaces the EU Medical Devices Directive 93/42/EEC. Unlike directives, which must be implemented into the national
laws of the EEA countries, the regulations is directly applicable, i.e., without the need for adoption of EEA country laws implementing
them, in all countries and are intended to eliminate current differences in the regulation of medical devices among EEA countries. The
EU MDR, among other things, establishes a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical
devices and ensures a high level of safety and health while supporting innovation. The EU MDR entered into application on May 26, 2021,
and among others things:

●
strengthens
the rules on placing devices on the market and reinforce surveillance once they are available;

●
establishes
explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices
placed on the market;

●
improves
the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;

●
sets
up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available
in the EU;

●
strengthens
rules for the assessment of certain high-risk devices which may have to undergo an additional check by experts before they are placed
on the market.

Continuing
Regulation. As in the U.S., manufacturers of medical devices are subject to comprehensive regulatory oversight by notified bodies
and the competent authorities of the EEA countries. This oversight applies both before and after certification. It includes control of
compliance with the EU MDR General Safety and Performance Requirements and post-market surveillance.

In
the EEA, the advertising and promotion of our products will also be subject to EEA countries national laws implementing Directive 2006/114/EC
concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other national
legislation of individual EEA countries governing the advertising and promotion of medical devices. EEA countries’ legislation
may also restrict or impose limitations on our ability to advertise our products directly to the general public. In addition, voluntary
EU and national Codes of Conduct provide guidelines on the advertising and promotion of our products to the general public and may impose
limitations on our promotional activities with healthcare professionals. Violations of the rules governing the promotion of medical devices
in the EEA could be penalized by administrative measures, fines and imprisonment.

Data
Privacy Regulation. The collection and use of personal health data in the EEA is governed by the data protection laws and regulations
adopted by the EEA countries and the EU General Data Protection Regulation (“GDPR”). The GDPR became applicable on May 25,
2018 and repealed the EU Data Protection Directive. The GDPR is directly applicable in each EEA country and imposes several requirements
on companies that process personal data, strict rules on the transfer of personal data out of the EEA, including to the U.S., and fines
and penalties for failure to comply with the requirements of the GDPR and the related national data protection laws of the EAA countries.
The GDPR confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities,
seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. Failure to comply with the requirements
of GDPR may result in fines of up to 20,000,000 Euros or up to 4% of the total worldwide annual turnover of the preceding financial year,
whichever is higher, and other administrative penalties.

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Orphan
Designation and Exclusivity. In the EU, the Committee for Medicinal Products for Human Use grants orphan drug designation to promote
the development of products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating
conditions affecting not more than five in 10,000 persons in the EU Community and for which no satisfactory method of diagnosis, prevention
or treatment has been authorized (or the product would be a significant benefit to those affected). Additionally, designation is granted
for products intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic
condition and when, without incentives, it is unlikely that sales of the drug in the EU would be sufficient to justify the necessary
investment in developing the medicinal product.

In
the EU, orphan drug designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market
exclusivity is granted following medicinal product approval. This period may be reduced to six years if the orphan drug designation criteria
are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity.

Orphan
drug designation must be requested before submitting an application for marketing approval. Orphan drug designation does not convey any
advantage in, or shorten the duration of, the regulatory review and approval process.

Exceptional
Circumstances/Conditional Approval. Orphan medicinal product or products for unmet medical needs may be eligible for EU approval
under exceptional circumstances or with conditional approval. Approval under exceptional circumstances is applicable to orphan products
and is used when an applicant is unable to provide comprehensive data on the efficacy and safety under normal conditions of use because
the indication for which the product is intended is encountered so rarely that the applicant cannot reasonably be expected to provide
comprehensive evidence, when the present state of scientific knowledge does not allow comprehensive information to be provided, or when
it is medically unethical to collect such information. Conditional marketing authorization is applicable to orphan medicinal products,
medicinal products for seriously debilitating or life- threatening diseases or medicinal products to be used in emergency situations
in response to recognized public threats. Conditional marketing authorization can be granted on the basis of less complete data than
is normally required in order to meet unmet medical needs and in the interest of public health, provided the risk-benefit balance is
positive, it is likely that the applicant will be able to provide the comprehensive clinical data, and unmet medical needs will be fulfilled.

Conditional
marketing authorization is subject to certain specific obligations to be reviewed annually.

Other
Regulations. We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing
practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances. We may incur
significant costs to comply with such laws and regulations now or in the future.

Regulation
in Israel. In order to conduct clinical testing on humans in the State of Israel, special authorization must first be obtained from
the ethics committee and general manager of the institution in which the clinical studies are scheduled to be conducted, as required
under the Guidelines for Clinical Trials in Human Subjects implemented pursuant to the Israeli Public Health Regulations (Clinical Trials
in Human Subjects), as amended from time to time, and other applicable legislation. These regulations require authorization by the institutional
ethics committee and general manager as well as from the Israeli Ministry of Health, except in certain circumstances, and in the case
of genetic trials, special fertility trials and complex clinical trials, an additional authorization of the Ministry of Health’s
overseeing ethics committee. The institutional ethics committee must, among other things, evaluate the anticipated benefits that are
likely to be derived from the project to determine if it justifies the risks and inconvenience to be inflicted on the human subjects,
and the committee must ensure that adequate protection exists for the rights and safety of the participants as well as the accuracy of
the information gathered in the course of the clinical testing. Since we perform a portion of the clinical studies on certain of our
therapeutic candidates in Israel, we are required to obtain authorization from the ethics committee and general manager of each institution
in which we intend to conduct our clinical trials, and in most cases, from the Israeli Ministry of Health.

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Corporate
History

We
were incorporated on April 24, 2015. On June 25, 2019, our name was changed to Beyond Air, Inc. from AIT Therapeutics, Inc.

We
have the following wholly owned subsidiaries:

-
Beyond
Air Ltd. (“BA Ltd.”), incorporated in Israel on May 1, 2011.

-
Beyond
Air Australia Pty Ltd., incorporated on December 17, 2019 in Australia.

-
Beyond
Air Ireland Limited, incorporated on March 5, 2020 in Ireland.

We
have 88.2% ownership in the following entity:

-
Jodheary
Holdco 18 Limited, incorporated on March 24, 2023 in Ireland. In April 2023, its name was changed to Beyond Air (NO) Limited. In
March 2024, its name was changed to NeuroNOS Ltd.

NeuroNOS
Ltd. has the following wholly owned subsidiaries:

-
NeuroNOS
Ltd Israel, incorporated on March 12, 2024

-
NNOS
U.S., Inc, incorporated in Delaware on January 10, 2025

-
Beyond
Air Cyprus Limited, incorporated on October 13, 2021 in Cyprus.

We
have 80% ownership in the following entity:

-
Beyond
Air Bermuda Limited, incorporated on August 13, 2021 in Bermuda. In September 2022, its name was changed to Beyond Cancer Bermuda
Limited.

Beyond
Air Bermuda Limited has the following wholly owned subsidiaries:

-
XAIR
Israel Ltd, incorporated on October 3, 2021 in Israel.

-
Beyond
Cancer U.S., Inc., incorporated on March 17, 2022 in Delaware.

Recent Updates

On April 7, 2026, we received
a written notification (the “Notice”) from the Nasdaq Listing Qualifications Department (the “Listing Qualifications
Department”) notifying us that for the 30 consecutive business day period between February 23, 2026 through April 6, 2026, our common
stock had not maintained a minimum closing bid price of $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing
Rule 5550(a)(2) (the “Bid Price Rule”). While companies are typically afforded a 180-calendar day compliance period to comply
with the Bid Price Rule, the Notice stated that, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), we were not eligible for any compliance
period specified in Nasdaq Listing Rule 5810(c)(3)(A) due to the fact that we had effected a reverse stock split over the prior one-year
period. We had effected a 1-for-20 reverse stock split on July 14, 2025.

The Notice stated that the Company’s
securities will be subject to delisting from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the
“Panel”) by April 14, 2026. Accordingly, on April 13, 2026, we timely requested a hearing before the Panel to appeal the Staff’s
determination. As a result of the timely hearing request, any suspension or delisting action with respect to our common stock was stayed
pending the issuance of a written decision by the Panel following the hearing process. The hearing was scheduled for May 14, 2026. On
May 28, 2026 we received a decision letter from the Panel granting our request for continued listing on Nasdaq, subject to certain conditions.
The Panel’s decision was issued following a hearing held on May 14, 2026, at which the Company presented its compliance plan to
address its non-compliance with the Bid Price Rule.

Pursuant to the Panel’s
decision, we must demonstrate compliance with the Bid Price Rule on or before July 31, 2026. In addition, pursuant to Nasdaq Listing Rule
5815(d)(4)(A), we will be subject to a Discretionary Panel Monitor for a period of one year from the date the Company regains compliance
with the Bid Price Rule. If the Panel or Listing Qualifications Department determines that the Company fails any listing standard during
the one-year monitoring period, then the Company will not be permitted to provide a plan of compliance with respect to any deficiency
that arises during the one-year monitoring period. Rather, the Listing Qualifications Department will promptly issue a written determination
to delist our securities (the “Staff Delisting Determination”). If the Company does not request review of the Staff Delisting
Determination then the Company’s common stock will be suspended as described in the Staff Delisting Determination.

The Company intends to actively
monitor the bid price of its Common Stock and remain in compliance with the Nasdaq listing standards.

Available
Information

We
file electronically with the Securities and Exchange Commission (the “SEC”) our annual reports on Form 10-K, quarterly reports
on Form 10-Q and current reports on Form 8-K, and amendments related thereto, pursuant to Section 13(a) or 15(d) of the Exchange Act.
We make available on our website at www.beyondair.net free of charge, copies of these reports, as soon as reasonably practicable after
we electronically file such material with, or furnish it to, the SEC. Reports filed with the SEC may be viewed at www.sec.gov. The information
in or accessible through the SEC and our website is not incorporated into, and is not considered part of, this filing. Further, our references
to the URLs for these websites are intended to be inactive textual references only.

Human
Capital

As
of March 31, 2026, we had 54 employees globally, all of whom were full-time employees. None of our employees are represented by a labor
union and we consider our employee relations to be good.

Our
workforce is highly educated and diverse, which we believe is important for our continued success as a leading innovator in the medical
device market. We employ a number of strategies to best enable us to attract, retain, and engage our team members. Our human capital
resources objectives include, as applicable, identifying, recruiting, retaining, and incentivizing our management team and our clinical,
scientific and other employees and consultants. The principal purposes of our equity and cash incentive plans are to attract, retain
and motivate personnel through the granting of stock-based and cash-based compensation awards, in order to align our interests and the
interests of our stockholders with those of our employees and consultants.

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