Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 342

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 16
Chunk 342
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 to be
an ongoing component or central to the Company’s operations. The grant provides for royalty payments to CFF upon the commercialization
of any product developed under the grant program at a rate of 10% of net sales. The royalties are capped at four times the grant actually
paid to the Company. A total of $1.9 million has been recognized as a reduction of R&D costs from this grant to date. Since the beginning
of the pilot clinical trial, the Company has received milestone payments totaling $1.9 million. The trial is now successfully completed
and no further payments are expected.

    F-17

BEYOND AIR, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 SIGNIFICANT ACCOUNTING POLICIES AND OTHER
RISKS AND UNCERTAINTIES (continued)

Research and Development

Research and development expenses are charged to the
consolidated statements of operations and comprehensive loss as incurred. Research and development expenses include salaries, benefits,
stock-based compensation and costs incurred by outside laboratories, manufacturers, clinical research organizations, consultants, and
accredited facilities in connection with preclinical studies and clinical trials. Research and development expenses are partially offset
by the benefit of tax incentive payments for qualified research and development expenditures from the Australian tax authority (“AU
Tax Rebates”). The Company does not record AU Tax Rebates until payment is received due to the uncertainty of receipt. For the years
ended March 31, 2025 and March 31, 2024, the Company received $0 million and $0.3 million, respectively, in AU Tax Rebates.

Foreign Exchange Transactions

The Company’s subsidiaries transact in U.S.
dollars, Euros, New Israeli Shekels and Australian dollars. The Company’s main operations are in the United States and the U.S.
dollar is the currency of the primary economic environment in which the Company operates and expects to continue to operate in the foreseeable
future. The Company translated its non-U.S. operations’ assets and liabilities denominated in foreign currencies into U.S. dollars
at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting
period. Gains or losses from foreign currency transactions are included in other income (expense) in the consolidated statements of operations
and comprehensive loss as foreign currency exchange gain/(loss).

In consolidating
international subsidiaries, balance sheet currency effects are recorded as