| SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES | NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES Principles
of Consolidation These
consolidated financial statements include the accounts of the Company and the accounts of all of the Company’s subsidiaries and
a variable interest entity (“VIE”) for which the Company is the primary beneficiary. As the Company has both the power to
direct activities of Beyond Cancer that most significantly impact Beyond Cancer’s economic performance and the right to receive
benefits and losses that may potentially be significant, these financial statements are fully consolidated with those of the Company.
The non-controlling owners’ 20 Reclassifications Certain
prior period amounts have been reclassified to conform to the current period presentation. Of the restricted cash originally recorded in the consolidated financial statements for the year ended March 31,
2023, $ 2.5 Use
of Estimates The
preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period.
Actual results could significantly differ from those estimates. On an ongoing basis, the Company evaluates its significant estimates
and assumptions including expense recognition and accrual assumptions under consulting and clinical trial agreements, stock-based compensation,
impairment assessments, accounting for licensed rights to use technologies and other long-lived assets, contingency recognition and accruals
and the determination of valuation allowance requirements on deferred tax attributes. BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Going
Concern, Liquidity and Other Uncertainties The
Company used cash in operating activities of $ 56.0 239.7 34.5 5.0 The
Company expects to incur net losses and have significant cash outflows for at least the next year, including making
significant investments in research and development. Management believes these factors raise substantial doubt about the
Company’s ability to meet its obligations with cash on hand and concluded that the Company will require additional funding
within one year from the date these financial statements are issued. Management
is confident that the efforts to arrange financing as described below, while not assured, will enable the Company to meet its obligations. Management
currently has various funding options in place to raise additional capital such as a debt line of $ 12.5 subject to Avenue Capitals
investment committee approval and negotiations of the terms and conditions between both parties , 32.9 200,000,000 With
respect to Beyond Cancer, discussions are underway with investment banks to raise capital based on their most recent top line data from
the phase 1a, first-in-human trial which was successful in the first 6 patients with no dose limiting toxicities at the first dose. Treatment
in the next dosing cohort has begun. The
Company’s future capital needs and the adequacy of its available funds will depend on many factors, including, but not necessarily
limited to the success and costs of commercialization of the Company’s approved product and the actual cost and time necessary
for current and anticipated preclinical studies, clinical trials and other actions needed to obtain certification or regulatory approval
of the Company’s product candidates. The
Company will be required to raise additional funds through equity or debt securities offerings or strategic collaboration and/or licensing
agreements in order to fund operations if it is unable to generate enough product or royalty revenues, if any. Such financing may not
be available on acceptable terms, or at all, and the Company’s failure to raise capital when needed could have a material adverse
effect on its strategic objectives, results of operations and financial condition. The accompanying consolidated financial statements have been prepared assuming that the Company will continue operating
as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities
in the normal course of business. Other
Risks and Uncertainties The
Company is subject to risks common to development and early-stage medical device companies including, but not limited to, new technological
innovations, certifications or regulatory approval, dependence on key personnel, protection of proprietary technology, compliance with
government regulations, product liability, uncertainty of market acceptance of approved products and the potential need to obtain additional
financing. The Company is also dependent on third-party suppliers and, in some cases, single-source suppliers. The
Company’s products require approval or clearance from the FDA prior to commencement of commercial sales in the United States. There
can be no assurance that the Company’s products beyond LungFit ® BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Lease
Revenue Recognition The
Company generates revenue from the leases of its LungFit® PH devices to its customers under fixed fee arrangements over periods
of up to three years. The fixed fee is typically broken down into ratable monthly payments over the term of the arrangement. The
Company’s customers include hospitals and medical facilities. The Company’s LungFit® PH leases include filters,
calibration gas, bagging kits, cables, adapters, and other components and accessories required to use the LungFit® PH device
(the “Consumables”). The Consumables’ quantities are varied and may be supplied upon demand of the customers and
are unlimited, or the arrangement may provide for the maximum quantities available to the customer over the term of the arrangement.
The Company’s LungFit® PH leases also include maintenance and training required to use the LungFit® PH device, as well
as device back-up services (the “Services”), which are recorded in cost of revenue. The
Company accounts for its rental arrangements of LungFit® PH devices in accordance with Accounting Standards Codification 842,
Leases (“ASC 842”). Under ASC 842, leases may be classified as either financing, sales-type, or operating, and the
Company is required to disclose key information about leasing arrangements. The classification determines the pattern of revenue
recognition and classification within the statement of operations and comprehensive loss. The Company typically classifies the rental arrangement of its
LungFit® PH contracts as operating leases. The Company’s leases do not contain any restrictive covenants or any material
residual value guarantees. The Company’s equipment leases may contain renewal options which range from one
month two
years The
Company elected the practical expedient applied to operating leases not to separate lease and non-lease components as long as the lease
and at non-lease components have the same timing and pattern of transfer. As such, the non-lease components, including the Consumables
and Services, are combined with the predominant lease component. The total fixed fees that the Company is reasonably certain to collect are recognized on a straight line basis over the term of the arrangement. Additionally, the Company made an accounting policy election
to present LungFit® PH revenue net of sales and other similar taxes. Amounts billed in advance of performance obligations being satisfied are recognized as deferred revenue. At the lease commencement date the Company will defer initial direct costs, including commission expense and the
cost is recognized over the lease term on the same basis as lease income. The Company records the costs of shipping related
to contract devices and consumables in cost of revenue in its consolidated statements of operations. See
Note 17 to the consolidated financial statements for more information regarding leasing arrangements. Accounts Receivable The Company extends credit
to its customers on an unsecured basis. Accounts receivable are recorded at the invoiced amount, based on agreed contract terms. Receivables
are written off when it is determined that amounts are uncollectible. There are currently no allowances for expected credit losses and
no doubtful debts recorded in accounts receivable and the Company has not experienced any credit losses to date. Fair
Value Measurements ASC
820, Fair Value Measurements and Disclosures Level
1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. Level
2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived
valuations in which all significant inputs are observable for substantially the full term of the asset or liability. Level
3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. As
of March 31, 2024 and March 31, 2023, the Company’s financial instruments included restricted cash,
marketable securities, accounts payable, long-term debt, liability classified warrants and derivative liabilities. The carrying amounts
reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash and marketable
securities approximate their respective fair values because of the short-term nature of these accounts. The carrying value of the Company’s
long-term debt approximates fair value based on current interest rates for similar types of borrowings and is in Level 3 of the fair
value hierarchy. The liability classified warrants and derivative liabilities are each recorded at their fair value and are Level 3 of
the fair value hierarchy. The
following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities
that are measured at fair value on a recurring basis: The
fair value amounts as of March 31, 2024 are: SCHEDULE OF FAIR VALUE ON A RECURRING BASIS
(in thousands) Total Level
1 Level
2 Level
3
Marketable securities:
Corporate debt securities $ - $ - $ - $ -
Government
securities 16,388 16,388 - -
Mutual
funds 6,702 6,702 - -
Total assets measured
and recorded at fair value $ 23,090 $ 23,090 $ - $ -
Liabilities:
Warrant liability $ 275 $ - $ - $ 275
Derivative liability 1,314 - - 1,314
Total liabilities measured
and recorded at fair value $ 1,589 $ - $ - $ 1,589 BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) The
fair value amounts as of March 31, 2023 are:
(in thousands) Total Level
1 Level
2 Level
3
Marketable securities :
Corporate debt
securities $ 1,597 $ 1,597 $ - $ -
Government securities 1,013 1,013 - -
Mutual
funds 14,114 14,114 - -
Total assets measured
and recorded at fair value $ 16,724 $ 16,724 $ - $ -
Liabilities :
Warrant liability $ - $ - $ - $ -
Derivative liability - - - -
Total liabilities measured
and recorded at fair value $ - $ - $ - $ - Level
3 Valuation The
common stock warrants issued in connection with the Loan and Security Agreement (as defined below) in June 2023 (Note 14) are recorded
as a warrant liability within the consolidated balance sheet as of March 31, 2024 as the warrants contain certain
settlement features that are not indexed to the Company’s own stock. In addition, the conversion feature embedded within the long-term
debt required bifurcation as certain adjustments to the conversion price were not indexed to the Company’s own stock and recorded
as a derivative liability. The warrants and derivative liability are remeasured each reporting period with the change in fair value recorded
to other income (expense) in the consolidated statement of operations and comprehensive loss until the warrants and derivative
are exercised, expired, reclassified or otherwise settled. The significant assumptions used in valuing the warrants and derivative were
as follows: SCHEDULE OF VALUING THE WARRANTS AND DERIVATIVES
At March 31, 2024 Warrants Derivative
Expected term (in years) 4.25 3.25
Volatility 88 % 86 %
Risk-free rate 4.09 % 4.38 %
At June 15, 2023 Warrants Derivative
Expected term (in years) 5 4
Volatility 73 % 73 %
Risk-free rate 3.9 % 3.9 % The
table presented below is a summary of changes in the fair value of the Company’s Level 3 valuation for the warrants and derivatives
for the year ended March 31, 2024 (in thousands): SCHEDULE OF CHANGES IN FAIR VALUE OF WARRANTS AND DERIVATIVES
Warrants Derivative
Issuances $ 885 $ 1,361
Change in fair value (611 ) (48 )
Balance at March 31, 2024 $ 275 $ 1,314 BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Warrant
Liability The
Company classifies warrants as equity for any contracts that (i) require physical settlement or net-share settlement or (ii) gives
the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The
Company classifies warrants as assets or liabilities any contracts that (i) require net-cash settlement (including a requirement to
net-cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the
counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). Such warrants
are subject to remeasurement at each consolidated balance sheet date and any change in fair value is recognized as a
component of other expense on the consolidated statements of operations and comprehensive loss. The Company will continue
to adjust the liability for changes in fair value until the earlier of the exercise or expiration of such warrants. At that time,
the portion of the warrant liability related to warrants will be reclassified to additional paid-in capital. Derivative
Liability The
Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded
derivatives in accordance with ASC 815, Derivatives and Hedging. For derivative financial instruments that are accounted for as assets
or liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting
date, with changes in the fair value reported in the consolidated statements of operations and comprehensive loss. The classification
of derivative instruments, including whether such instruments should be recorded as assets or liabilities or as equity, is evaluated
at the end of each reporting period. Derivative liabilities classified in the consolidated balance sheets as current or non-current
based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. Cash
and Cash Equivalents, Short-Term Investments and Restricted Cash The
Company considers all highly liquid investments with original maturities of three months or less at the date of purchase and an investment
in a U.S. government money market fund to be cash equivalents. The Company maintains its cash and cash equivalents in highly rated financial
institutions in Australia, Israel, Ireland and the U.S., the balances of which, at times, may exceed federally insured limits. Marketable
securities include investments in fixed income bonds and U.S. Treasury securities that are considered to be highly liquid and easily tradeable.
The marketable securities are considered trading securities and are measured at fair value and are accounted for in accordance with ASC
320. The marketable securities are valued using inputs observable in active markets for identical securities and are therefore classified
as Level 1 within the Company’s fair value hierarchy. As
of March 31, 2024 and March 31, 2023, restricted cash included approximately $ 0.2
million and $ 7.6
million, respectively. Restricted cash declined
by $ 7.4 million
from March 31, 2023 to March 31, 2024 as a $ 7.4
million supersedeas bond held as collateral pending
the outcome of the appeal on Empery Asset Master, Ltd., et. al. vs. AIT Therapeutics, Inc. Concentration of Credit Risk Financial instruments that potentially
subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which at times, may exceed
the federal depository insurance coverage of $ 250,000 250,000 25,000 100,000 100,000 the
Company had greater than $250,000 at United States financial institutions, greater than A$250,000 at Australian financial
institutions, greater than €100,000 at Irish financial institutions and also has funds on deposit in Israel. BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) The
following table is the reconciliation of the presentation and disclosure of cash, cash equivalents, marketable securities by major security
type and restricted cash as shown on the Company’s consolidated statements of cash flows for: SCHEDULE OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
(in thousands) March
31, 2024 March
31, 2023
Cash and cash equivalents $ 11,378 $ 29,158
Restricted cash 230 7,610
Total cash, cash equivalents and restricted
cash $ 11,608 $ 36,768
Marketable securities:
Marketable debt securities - -
Corporate debt securities - 1,597
U.S. government securities 16,388 1,013
Mutual
fund (Ultra-Short-Term Income) 6,702 14,114
Total marketable securities 23,090 16,724
Total cash, cash equivalents,
marketable securities and restricted cash $ 34,698 $ 53,492 The
following table summarizes the Company’s short-term marketable securities with unrealized gains and losses as of March 31, 2024 aggregated by major
security type: SUMMARY OF SHORT-TERM MARKETABLE SECURITIES WITH UNREALIZED GAINS AND LOSSES
(in thousands) Fair
Value Unrealized Gains
and (Losses)
Corporate debt securities - -
US government
securities 16,388 117
Mutual
fund (Ultra-Short-Term Income) 6,702 6
Total short-term marketable
securities $ 23,090 $ 123 The following table summarizes our short-term marketable securities with unrealized gains and losses as of March 31, 2023 aggregated by
major security type:
(in thousands) Fair Value Unrealized Gains and (Losses)
Corporate debt securities 1,597 (2 )
US government securities 1,013 (10 )
Mutual fund (Ultra-Short-Term Income) 14,114 -
Total short-term marketable securities $ 16,724 $ (12 ) All
marketable securities are A- or higher rated. No BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Fixed Assets Property
and equipment are stated at cost less accumulated depreciation and accumulated amortization. Depreciation and amortization are calculated
using the straight-line method over the estimated useful life of the assets as follows: SCHEDULE OF PROPERTY AND EQUIPMENT USEFUL LIFE OF ASSETS
Computer
equipment Three
years
Furniture
and fixtures Five
years
Clinical
and medical equipment Three Five
years
Equipment
deployable as part of a service offering Five
years
Leasehold
improvements Shorter
of term of lease or estimated useful life of the asset Segment
Reporting Commencing
with the creation of Beyond Cancer in November 2021, the Company’s operations became classified into two segments, Beyond Air and
Beyond Cancer. Each segment has its own management team, board of directors, corporate officers and legal entities. As of March 31, 2024,
Beyond Air, Inc. owned 80 BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Inventories Raw
materials, work in progress and finished goods are stated at the lower of cost or net realizable value. Cost comprises direct materials,
third-party manufacturing costs and shipping costs incurred to deliver goods to the Company’s central warehouse location. Costs
are assigned to individual items of inventory on the basis of weighted average costs. Inventory items are tracked by batch/lot number
for specific identification whenever possible. The Company uses judgement to determine the proportion of inventory items held which will
be provided to a hospital as part of its service delivery versus the inventory items that will be provided free of charge on hospital
evaluations. Inventory items held for hospital evaluations have no realizable value. Leases Operating
lease assets are included within operating lease right-of-use assets, and the corresponding operating lease obligation on the consolidated
balance sheets as of March 31, 2024 and March 31, 2023 in accordance with ASC 842, Leases Grant
receivable Under
a collaboration arrangement with the Cystic Fibrosis Foundation (“CFF”), grant milestones are achieved subject to certain
performance steps and requirements under a development program. Grant milestones are recorded as reimbursements against the applicable
portion of the Company’s research and development expenses. Such reimbursements are reflected as a reduction of research and development
expenses in the Company’s consolidated statements of operations and comprehensive loss, as the performance of research
and development services for reimbursement is not considered to be an ongoing component or central to the Company’s operations.
See Note 10. BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Research
and Development Research
and development expenses are charged to the consolidated statements of operations and comprehensive loss as incurred. Research
and development expenses include salaries, benefits, stock-based compensation and costs incurred by outside laboratories, manufacturers,
clinical research organizations, consultants, and accredited facilities in connection with preclinical studies and clinical trials. Research
and development expenses are partially offset by the benefit of tax incentive payments for qualified research and development expenditures
from the Australian tax authority (“AU Tax Rebates”). The Company does not record AU Tax Rebates until payment is received
due to the uncertainty of receipt. In the year ended March 31, 2024 and March 31, 2023, the Company received $ 0.3 0.5 Foreign
Exchange Transactions The
Company’s subsidiaries transact in U.S. dollars, Euros, New Israeli Shekels and Australian dollars. The Company’s main operations
are in the United States and the U.S. dollar is the currency of the primary economic environment in which the Company operates and expects
to continue to operate in the foreseeable future. The Company translated its non-U.S. operations’ assets and liabilities denominated
in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the
average exchange rate for the reporting period. Gains or losses from foreign currency transactions are included in other income (expense)
in the consolidated statements of operations and comprehensive loss as foreign currency exchange gain/(loss). In
consolidating international subsidiaries, balance sheet currency effects are recorded as a component of accumulated other
comprehensive income and loss. The accumulated other comprehensive income and loss account includes the cumulative results of
translating certain balance sheet assets and liabilities at current exchange rates and some accounts at historical rates. For the
year ended March 31, 2024, the Company recorded a loss of $ 0 0.1 Stock-Based
Compensation The
Company measures the cost of employee and non-employee services received in exchange for an award of equity instruments based on the
grant date fair value of the award. Fair value for restricted stock unit awards is valued using the closing price of the
Company’s common stock on the date of grant. The grant date fair value is recognized over the requisite service period during
which an employee and non-employee is required to provide service in exchange for the award, using the accelerated method with each
tranche being expensed over its vesting period. The grant date fair value of employee and non-employee share options is estimated
using the Black-Scholes option pricing model. The risk-free interest rate assumptions were based upon the observed interest rates
appropriate for the expected term of the equity instruments. The expected dividend yield was assumed to be zero as the Company has
not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future. The Company accounts for forfeitures as they occur. Starting in 2023, Beyond Air used its own historical volatility as an
input for expected volatility, but due to the Beyond Cancer’s lack of marketability, the Company utilizes the implied
volatility based on an aggregate of guideline companies for expected volatility. The Company uses the simplified method to estimate
the expected term. Supplier
Concentration The
Company relies on third-party suppliers to provide materials for its devices and consumables. In
the year ended March 31, 2024, the Company purchased approximately 75 %
of its materials from a third-party vendor. In the year ended March 31, 2023, the Company purchased approximately 80 %
of its materials from two third-party vendors, with these vendors representing 67 %
and 13 %,
respectively. Licensed
Right to Use Technology Licensed
right to use technology that is considered platform technology with alternative future uses is recorded as an intangible asset and is
amortized on a straight-line method over its estimated useful life, determined to be thirteen years. The
expected amortization expense for the next five years and thereafter is as follows for the year ended March 31 (in thousands): SCHEDULE OF FUTURE EXPECTED AMORTIZATION EXPENSE
2025 $ 205
2026 205
2027 205
2028 205
2029 205
Thereafter 402
Total $ 1,427 Long-Lived
Assets The
Company assesses the impairment of long-lived assets on an ongoing basis and whenever events or changes in circumstances indicate that
the carrying value may not be recoverable. Factors that the Company considers as potential triggers of an impairment review include the
following:
● significant
underperformance relative to expected historical or projected future operating results,
● significant
changes in the manner of the Company’s use of the acquired assets or the strategy for its overall business,
● significant
negative regulatory or economic trends, and
● significant
technological changes, which would render the platform technology, equipment, and manufacturing processes obsolete. Recoverability
of assets that will continue to be used in the Company’s operations is measured by comparing the carrying value to the future net
undiscounted cash flows expected to be generated by the asset or asset group. Future undiscounted cash flows include estimates of future
revenues, driven by market growth rates, and estimates of future costs. There were no events during the reporting periods that were deemed
to be a triggering event that would require an impairment assessment. BEYOND
AIR, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS NOTE
2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER RISKS AND UNCERTAINTIES (continued) Income
Taxes The
Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the
change is effective. Tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is
established when it is more likely than not that all or a portion of a deferred tax asset will either expire before the Company is
able to realize the benefit, or that future deductibility is uncertain. As of March 31, 2024 and March 31, 2023, the Company recorded a valuation
allowance to the full extent of the Company’s net deferred tax assets since the likelihood of realization of the benefit does
not meet the more-likely-than-not threshold. The
Company’s reserves related to taxes are based on a determination of whether and how much of a tax benefit taken by the Company
in its tax filings or positions is more likely than not to be realized following resolution of any potential contingencies present
related to the tax benefit. As of March 31, 2024 and March 31, 2023, the Company had no unrecognized tax benefits or related interest and penalties
accrued. The Company has not, as yet, conducted a study of research and development (R&D) credit carryforwards. This study may
result in an adjustment to the Company’s R&D credit carryforwards; however, until a study is completed and any adjustment
is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the
Company’s R&D credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation
allowance. Thus, there would be no impact to the consolidated balance sheet and the statement of operations and comprehensive loss if an
adjustment were required. The Company would recognize both accrued interest and penalties related to unrecognized benefits in income
tax expense. The Company’s uncertain tax positions are related to years that remain subject to examination by relevant tax
authorities. Since the Company is in a loss carryforward position, the Company is generally subject to examination by the U.S.
federal, state and local income tax authorities for all tax years in which a loss carryforward is available. Net
Income (Loss) Per Share Basic
and diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to Beyond Air, Inc.,
by the weighted average number of shares of common stock outstanding for the period. The dilutive effect of outstanding options, warrants,
restricted stock and other stock-based compensation awards is reflected in diluted net loss per share by application of the treasury
stock method. The calculation of diluted net loss attributed to common stockholders per share excludes all anti-dilutive shares of common
stock. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the
same as basic net loss per share attributable to common stockholders, because such shares of common stock are not assumed to have been
issued if their effect is anti-dilutive, see Note 8. Variable Interest Entity As the Company has the power to direct activities
of Beyond Cancer (VIE) that most significantly impact Beyond Cancer’s economic performance and the right to receive benefits and
losses that may potentially be significant, these financial statements are fully consolidated with those of the Company. The non-controlling
owners’ 20 Recently
Adopted Accounting Standards In
August 2020, the FASB issued ASU 2020-06 (“ASU 2020-06”), Debt — Debt with Conversion and Other Options
(“Subtopic 470-20”), to address the complexity associated with applying U.S.GAAP to certain financial instruments with characteristics
of liabilities and equity, which the Company adopted on April 1, 2023. ASU 2020-06 eliminated the beneficial conversion (and cash conversion)
accounting models in Subtopic 470-20 that require separate accounting for embedded conversion features, and simplified the settlement
assessment to determine whether it qualifies for equity classification. In addition, the new guidance requires entities to use the if-converted
method to calculate earnings per share for all convertible |
