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 U.S. Securities and Exchange Commission (“SEC”), if the Company’s 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 the Company’s public float. As of March 31, 2026, due to the SEC’s “baby shelf rules,” the Company may currently not sell any shares of common stock pursuant to the 2025 ATM. The Company will remain subject to the “baby shelf rules” under the Form S-3 registration statement until such time as its public float exceeds $75.0 million.

During the year ended March 31, 2026, the Company received net proceeds of $8.1 million from the sale of 2,441,775 shares of common stock through the 2025 ATM. During the year ended March 31, 2025, the Company received net proceeds of $2.1 million from the sale of 337,100 shares of common stock through the 2025 ATM.

On November 4, 2025, the Company entered into an equity purchase agreement (the “Streeterville Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”) for the purchase of up to $20 million of the Company’s shares of Common Stock. In connection with the Streeterville Purchase Agreement, Streeterville and the Company entered into a Registration Rights Agreement, pursuant to which the Company filed a registration statement for the resale of up to 1,600,000 shares of Common Stock (the “Registration Statement”). During January 2026, Streeterville elected to purchase 1.6 million shares of common stock with an average fair market value of $2.09 per share over each issuance date, resulting in approximately $3.3 million recorded to additional paid-in capital.

Pursuant to the Streeterville Purchase Agreement (so long as there is no balance outstanding on the Note (Note 9), the Company has the right, but not the obligation, to direct Streeterville, by delivery to Streeterville of a put notice from time to time during a period of up to two years, to purchase shares of Common Stock (i) in a minimum amount not less than $25,000, and (ii) in a maximum amount up to the median daily trading volume of the Common Stock during the five trading days immediately preceding delivery of the put notice, or such other greater amount mutually agreed upon by the parties; provided, however, that the number of put shares shall not exceed the beneficial ownership limitation, of 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable pursuant to a put notice.

On January 14, 2026, the Company entered into the Securities Purchase Agreement with an institutional investor pursuant to which the Company sold, in a private placement offering, an aggregate of (i) 524,990 shares of common stock (ii) 3,405,828 pre-funded stock purchase warrants, (the “2026 Pre-funded Warrants”) and (iii) 3,930,818 stock purchase warrants (the “2026 Common Warrants” and together with the 2026 Pre-funded Warrants, the “2026 Warrants”). Each common share and accompanying 2026 Common Warrant were sold together at a combined offering price of $1.272 per share, and each 2026 Pre-Funded Warrant was sold at an offering price of $1.2719 per 2026 Pre-funded Warrant for gross proceeds of $5.0 million. The 2026 Pre-Funded Warrants have an exercise price of $0.0001 per share, and the 2026 Common Warrants have an exercise price of $1.147 per share. The private placement offering closed on January 16, 2026. The Company received total net proceeds of $4.5 million after deductions for placement agent commissions and other offering costs of $0.3 million and $0.2 million, respectively, during the year ended March 31, 2026.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 STOCKHOLDERS’ EQUITY (continued)

Stock Option Plans

The Company’s Eighth 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 November 25, 2025, the Company’s Board of Directors approved an amendment to the 2013 BA Plan to increase the number of shares in the 2013 BA Plan by 850,000, which was approved by the Company’s stockholders at the 2026 annual stockholder meeting on January 30, 2026. The 2013 BA Plan has 1,680,000 shares authorized for issuance. As of March 31, 2025, 894,276 shares were available under the 2013 BA Plan.

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 years ended March 31, 2026 and March 31, 2025 is as follows:

SCHEDULE OF RESTRICTED STOCK AWARDS

Stock-based compensation expense related to these stock issuances for the years ended March 31, 2026 and March 31, 2025 was $0.5 million and $1.0 million, respectively.

As of March 31, 2026, the Company had unrecognized stock-based compensation expense for the restricted stock unit awards in the 2013 BA Plan of approximately $0.3 million, which is expected to be expensed over the weighted average remaining service period of 1.0 years.

As of March 31, 2026, all vested shares had been issued.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 STOCKHOLDERS’ EQUITY (continued)

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 years ended March 31, 2026 and March 31, 2025 is as follows:

SCHEDULE OF OPTION ACTIVITY 

As of March 31, 2026, the Company had unrecognized stock-based compensation expense for the stock options in the 2013 BA Plan of approximately $1.7 million which is expected to be expensed over the weighted average remaining service period of 1.7 years.

For the years ended March 31, 2026 and March 31, 2025, the weighted average fair value of options granted was $0.80 and $5.03 per share, respectively.

On March 27, 2026, the Company executed a Separation and Release of Claims Agreement with the former CEO, Steven Lisi (“Release Agreement”). All unvested options held by Mr. Lisi as of March 27, 2026, were accelerated and immediately vested, and remain exercisable for twenty-four months from March 27, 2026. The Company recorded $0.1 million of non-cash stock compensation expense reflecting the acceleration of expense recognition of these equity awards.

On November 4, 2025, the Company’s Board of Directors approved a stock option repricing of 726,618 options (the “2026 Option Repricing”), effective November 4, 2025. The 2026 Option Repricing was undertaken in accordance with, and as permitted by, the Company’s 2013 BA Plan. Pursuant to the 2026 Option Repricing, all options granted pursuant to the 2013 BA Plan that are held by Company Board members, officers, and employees expected to continue providing services to the Company were repriced, to the extent such options had an exercise price in excess of $1.95, the closing price per share of the Company’s common stock as reported on The Nasdaq Stock Market on November 3, 2025. All such options were repriced such that the exercise price per share was reduced to $1.95. The modification resulted in incremental stock compensation expense of $0.3 million recognized during the year ended March 31, 2026. There is approximately $0.1 million of unrecognized stock-based compensation expense for the 2026 Option Repricing which is expected to be expensed over the weighted average remaining service period of 1.5 years.

On November 22, 2024, the Company’s Board of Directors approved a stock option repricing (“2025 Option Repricing”), effective November 22, 2024 (“Effective Date”). The 2025 Option Repricing was undertaken in accordance with, and as permitted by, the Company’s Amended 2013 Plan. Pursuant to the 2025 Option Repricing, all options granted pursuant to the Amended 2013 Plan that are held by Company Board members, officers, and employees expected to continue providing services to the Company were repriced, to the extent such options had an exercise price in excess of $10.80, the closing price per share of the Common Stock as reported on The Nasdaq Stock Market on November 22, 2024. As of the Effective Date, all such options were repriced such that the exercise price per share was reduced to $10.80. The modification resulted in incremental stock compensation expense of $0.3 million and $1.6 million recognized during the years ended March 31, 2026 and March 31, 2025, respectively. There is approximately $0.1 million of unrecognized stock-based compensation expense for the 2025 Option Repricing which is expected to be expensed over the weighted average remaining service period of 1.0 years.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 Ltd.’s common stock. 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 March 31, 2026, 1,745,500 shares were available under the 2021 BC Plan.

A summary of the change in stock options for Beyond Cancer for the years ended March 31, 2026 and March 31, 2025 is as follows:

SCHEDULE OF OPTION ACTIVITY FOR BEYOND CANCER 

As of March 31, 2026, the Company had unrecognized stock-based compensation expense for the stock options in the 2021 BC Plan of approximately $0.4 million which is expected to be expensed over the weighted average remaining service period of 1.0 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 2023 NNOS Plan are generally four years and they expire ten years from the grant date. On March 31, 2025, the Company’s Board of Directors approved to reserve for issuance 1,725,000 shares of common stock. As of March 31, 2026, 465,670 shares were available under the 2023 NNOS Plan.

A summary of the change in stock options for NeuroNos for the years ended March 31, 2026 and March 31, 2025 is as follows:

SCHEDULE OF OPTION ACTIVITY FOR NEURONOS  

As of March 31, 2025, the Company had unrecognized stock-based compensation expense for the stock options in the 2023 NNOS Plan of approximately $0.1 million which is expected to be expensed over the weighted average remaining service period of 1.5 years.

For the years ended March 31, 2026 and March 31, 2025, the weighted average fair value of options granted was $2.38 and $0.11 per share, respectively.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $0.14 at the grant date during the year ended March 31, 2025 based on a third-party valuation, and to be $3.00 at the grant date during the year ended March 31, 2026 based on the valuation of common stock purchased by external investors during the fiscal year.

The following summarizes the components of stock-based compensation expense which included stock options and restricted stock for the years ended March 31, 2026 and March 31, 2025 (in thousands):

SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE 

Warrants

On September 8, 2025, the Company entered into an inducement offer letter agreement (“Inducement Letter”) with certain holders of the September 2024 equity offering common stock warrants (“Existing Warrants”). Pursuant to the Inducement Letter, such holders immediately exercised some of all of their respective outstanding Existing Warrants to purchase up to an aggregate of 1,439,128 shares of common stock at a reduced exercise price of $2.21. The proceeds to the Company from the exercise of the Existing Warrants were approximately $2.9 million, net of placement agent fees and other offering expenses of $0.2 million and $0.1 million, respectively. In consideration of the inducement offer, the Company issued new common stock warrants to purchase up to 719,562 shares of common stock for a purchase price of $0.125 per share of common stock underlying the new warrant. The new warrants have an exercise price of $2.21 per share and are immediately exercisable, with a term of five years from the issuance date.

On November 3, 2025, warrants to purchase up to an aggregate of 512,821 of Company common stock were issued as part of the Amended Loan Agreement with certain lenders including its director Robert Carey at an exercise price of $1.95 per common stock warrant.

On January 16, 2026, warrants to purchase up to an aggregate of 3,930,818 of Company common stock were issued to certain institutional investors at an exercise price of $1.147 per common stock warrant. The warrant exercise price was calculated at the 5-trading day average closing share price as of January 13, 2026.

On January 16, 2026, pre-funded warrants to purchase up to 3,405,828 of Company common stock were issued to certain institutional investors at an exercise price of $0.0001 per common stock warrant. During the year ended March 31, 2026, holders exercised 1,263,215 of these 2026 Pre-Funded Warrants.

A summary of the Company’s outstanding warrants as of March 31, 2026 is as follows:

SUMMARY OF OUTSTANDING WARRANTS 

ESPP

On March 4, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan (“ESPP”). The purpose of the ESPP is to encourage and to enable eligible employees of the Company, through after-tax payroll deductions, to acquire proprietary interests in the Company through the purchase and ownership of shares of Stock. The ESPP is intended to benefit the Company and its stockholders by (a) incentivizing participants to contribute to the success of the Company and to operate and manage the Company’s business in a manner that will provide for the Company’s long-term growth and profitability and that will benefit its stockholders and other important stakeholders and (b) encouraging participants to remain in the employ of the Company. As of March 31, 2026 and March 31, 2025, no shares were issued under the ESPP.

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS