Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 124

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 13
Chunk 124
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 based on the present value of lease payments over the
lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate of return, the Company used
an incremental borrowing rate based on the information available at adoption date in determining the present value of lease payments.

Grant Receivable

Under a collaboration arrangement with the Cystic
Fibrosis Foundation (“CFF”), grant milestones are achieved subject to certain performance steps and requirements under a development
program. Grant milestones are recorded as reimbursements against the applicable portion of the Company’s research and development
expenses. Such reimbursements are reflected as a reduction of research and development expenses in the Company’s consolidated statements
of operations and comprehensive loss, as the performance of research and development services for reimbursement is not considered 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