NOTE 4 STOCKHOLDERS’ EQUITY

On February 10, 2025, the Company entered into an At-The-Market Equity Offering Sales Agreement with BTIG, Inc. (the “2025 ATM”). Under the 2025 ATM, the Company may sell shares of its common stock having aggregate sales proceeds of up to $35.0 million, from time to time and at various prices. If shares of the Company’s common stock are sold, there is a 2.5% fee paid to the sales agent. Pursuant to the “baby shelf rules” promulgated by the SEC, if our public float is less than $75.0 million as of specified measurement periods, the number of shares of common stock that may be offered and sold by the Company under a Form S-3 registration statement, including pursuant to the 2025 ATM, in any twelve-month period is limited to an aggregate amount that does not exceed one-third of our public float. As of June 30, 2025, due to the SEC’s “baby shelf rules,” we are permitted to sell up to $5.8 million of shares of common stock pursuant to the 2025 ATM. We will remain subject to the “baby shelf rules” under the Form S-3 registration statement until such time as our public float exceeds $75.0 million.

During the three months ended June 30, 2025, the Company received net proceeds of $2.4 million from the sale of 564,699 shares of common stock through the 2025 ATM.

Stock Option Plans

The Company’s Seventh Amended and Restated 2013 Beyond Air Equity Incentive Plan (the “2013 BA Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of the Company’s common stock. On October 11, 2024, the Company’s Board of Directors (the “Board”) approved an amendment to the 2013 BA Plan to increase the number of shares in the 2013 BA Plan by 150,000 and to provide the Board the requested authority to (i) modify the exercise or grant price of an option or stock appreciation right after it is granted, (ii) cancel an option or stock appreciation right at a time when its exercise or grant price exceeds the fair market value of the underlying stock, in exchange for cash, another option or stock appreciation right, restricted stock, or other equity award, or (iii) take any other action that is treated as a repricing under generally accepted accounting principles. This amendment was approved by the Company’s stockholders at the 2025 annual stockholder meeting on November 22, 2024. The 2013 BA Plan has 830,000 shares authorized for issuance. As of June 30, 2025, 46,372 shares were available under the 2013 BA Plan.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4 STOCKHOLDERS’ EQUITY (continued)

Restricted Stock Units

The fair value for the restricted stock unit awards was valued at the closing price of the Company’s common stock on the date of grant. Restricted stock units vest annually over five years.

A summary of the Company’s restricted stock unit awards for the three months ended June 30, 2025 is as follows:

SCHEDULE OF RESTRICTED STOCK AWARDS 

Stock-based compensation expense related to these stock issuances for the three months ended June 30, 2025 and June 30, 2024 was $0.2 million and $0.3 million, respectively.

As of June 30, 2025, the Company had unrecognized stock-based compensation expense for the restricted stock unit awards in the 2013 BA Plan of approximately $0.7 million, which is expected to be expensed over the weighted average remaining service period of 1.3 years.

As of June 30, 2025, all vested shares had been issued.

Stock Options

The vesting terms of the options issued under the 2013 BA Plan are generally four years and expire ten years from the grant date.

A summary of the change in stock options for the three months ended June 30, 2025 is as follows:

SCHEDULE OF OPTION ACTIVITY  

As of June 30, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2013 BA Plan of approximately $4.1 million, which is expected to be expensed over the weighted average remaining service period of 1.7 years.

For the three months ended June 30, 2025, the weighted average fair value of options granted, adjusted for the 2025 Reverse Stock Split, was $3.23 per share.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4 STOCKHOLDERS’ EQUITY (continued)

The Company’s 2021 Beyond Cancer Ltd Equity Incentive Plan (the “2021 BC Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of Beyond Cancer’s common shares. The vesting terms of the options issued under the 2021 BC Plan are generally four years and they expire ten years from the grant date. On November 3, 2022, the Company’s Board of Directors approved an amendment to reserve for issuance an additional 2,000,000 shares of common stock. The 2021 BC Plan has 4,000,000 shares authorized for issuance. As of June 30, 2025, 1,588,000 common shares were available under the 2021 BC Plan.

 SCHEDULE OF OPTION ACTIVITY FOR BEYOND CANCER 

As of June 30, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2021 BC Plan of approximately $1.6 million, which is expected to be expensed over the weighted average remaining service period of 1.3 years.

The Company’s 2023 NeuroNos Ltd. Equity Incentive Plan (the “2023 NNOS Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of NeuroNos Ltd.’s common stock. The vesting terms of the options issued under the 2025 NNOS Plan are generally four years and they expire ten years from the grant date. On April 16, 2025, the Company’s Board of Directors approved to reserve for issuance 1,525,000 shares of common stock. As of June 30, 2025, 146,296 shares were available under the 2023 NNOS Plan.

A summary of the change in stock options for NeuroNos for the three months ended June 30, 2025 is as follows:

 SCHEDULE OF OPTION ACTIVITY FOR NEURONOS 

As of June 30, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2023 NNOS Plan of approximately $0.4 million, which is expected to be expensed over the weighted average remaining service period of 1.8 years.

For the three months June 30, 2025, the weighted average fair value of options granted was $2.38 per share.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4 STOCKHOLDERS’ EQUITY (continued)

The following was utilized to calculate the fair value of options on the date of grant:

SCHEDULE OF FAIR VALUE OF OPTION  

The Company determined that the fair value per share of NeuroNos’ common stock to be $3.00 at the grant date during the three months ended June 30, 2025 based on the valuation of common stock purchased by external investors during March 2025.

The following summarizes the components of stock-based compensation expense which included stock options and restricted stock units for the three months ended June 30, 2025 and June 30, 2024:

 SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE 

Warrants

A summary of the Company’s outstanding warrants as of June 30, 2025 is as follows:

 SUMMARY OF COMPANY’S OUTSTANDING WARRANTS 

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)