Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 1387

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 3
Chunk 1387
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 in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether these consolidated financial statements are free of material misstatement, whether due to
error or fraud. Beyond Air, Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion.

Our
audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our opinion.

Critical
Audit Matter

The
critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are
material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are
not, by communicating the critical audit matters below, providing separate opinions on the critical audit matter or on the accounts
or disclosures to which they relate.

Accounting
for Equity Financing and Warrant Issuances

Critical
Audit Matter Description

The Company evaluates its equity issuances to determine if those contracts
or embedded components of those contracts qualify as derivative instruments requiring separate recognition in the Company’s consolidated
financial statements. As described in Note 4, on September 26, 2024, the Company entered into the Securities Purchase Agreement II with
certain institutional and accredited investors, which included certain directors and officers of the Company, pursuant to which the Company
sold, in a private placement offering, an aggregate of (i) 24,999,999 shares of common stock (ii) 15,848,712 pre-funded stock purchase
warrants, (the “