Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 115

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 13
Chunk 115
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are also required in foreign jurisdictions in which the Company may license or sell its products. If the Company is denied such certifications
or approvals or clearances or such certifications, approvals or clearances 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.

    F-11

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 consolidated statements 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