Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 2267

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 9
Chunk 2267
---

of the Company’s next bona fide round of equity financing before June 30, 2024 and also granted the Lenders conversion rights for
up to $3.0 million in aggregate of the principal amount in common stock at a price equal to 130% of the exercise price of the warrant
(1,390,176 of common stock at $2.158), for the life of the loan (the “Conversion Right”).

On June 21, 2024, the
Company, in return for extending the interest-only period for an additional 6 months on the 2023 Loan and Security Agreement with
Avenue Capital, entered into an agreement to issue warrants to purchase up to 100,000
shares of common stock at an exercise price of $1.28
per share and an additional end of term payment of $87,500
plus legal and amendment fees.

Upon consummation of the offering contemplated by
the Securities Purchase Agreement and in accordance with their original terms, the 233,843 liability classified warrants issued the lenders
had their original exercise price of $5.88 per share repriced to $1.66 per share and the original conversion price of $7.64 per share
of the Conversion Right was reset to $2.16 per share.

Upon consummation of the offering contemplated by
the Securities Purchase Agreement II and in accordance with their original terms, the 233,843 liability classified warrants issued the
lenders had their repriced exercise price of $1.66 per share repriced to $0.38 per share.

The warrants are freestanding liability classified
financial instruments to which a portion of the debt proceeds were allocated to warrants and based on the warrants estimated fair value
at issuance. The remaining proceeds were allocated to the long-term debt. Costs allocated to the warrants were expensed immediately and
costs allocated to the debt are recorded as a debt discount and are amortized into interest expense over the life of the debt using the
effective interest method. The conversion feature was bifurcated from the debt and was accounted for as a derivative liability.

On September 30, 2024,
Beyond Air and the Lenders reached an agreement to extinguish the Avenue Capital senior secured term loan for a one-time payment of $17.85
million. This agreement eliminated the debt and interest payments that would have been made to Avenue Capital from October 1,
2024 through June 30, 2026 of $12.0