Company: XAIR
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001641172-25-023243
Chunk: 21

Company: Beyond Air, Inc.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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are delayed, such denial or delay may have a material adverse impact on the Company’s results of operations, financial position
and liquidity. Further, there can be no assurance that the Company’s product will be accepted in the marketplace, nor can there
be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics,
or that such products will be successfully marketed, if at all.

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 to two years.
The lease term is adjusted for renewal or termination options that the Company believes the customer is reasonably certain to exercise.

The
Company elected the practical expedient applied to operating leases not to separate lease and non-lease components as long as the lease
and 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