Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 456

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 8
Chunk 456
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, 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, other than an impairment of $0.5 million associated with certain R&D
assets following Management’s decision to put its VCAP clinical trial on hold.

    F-18

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, 2025
and March 31, 2024, 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. The Company would recognize both estimated accrued interest and penalties related to unrecognized benefits within
income tax expense in