Company: XAIR
Filing Date: 2025-06-20
Form Type: 10-K
Source: 0001641172-25-015750
Chunk: 1203

Company: Beyond Air, Inc.
Filing Date: 2025-06-20
Form: 10-K
Item: Item 2
Chunk 1203
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 Our critical accounting estimates are those estimates that involve a significant level of
uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our
financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates
on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an
ongoing basis. Our most critical accounting estimates include determining the accruals associated with third party providers supporting
research and development efforts.

Accrued Research and Development Expenses

As part of the process of preparing
our consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves
reviewing purchase orders, open contracts, reconciling payments and invoices and communicating with our personnel and suppliers to identify
services that have been performed on our behalf. It also includes the research and development vendors providing us with milestone and
percentage of completion reports on the statuses within each active purchase order and contract along with estimating the level of service
performed and the associated cost incurred for the services when we have not yet been invoiced or otherwise notified of the actual cost.
Our vendors invoice us in various ways via advance payments, as contractual milestones are met, or monthly in arrears for services performed.

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We make estimates
of our accrued expenses as of each balance sheet date in our consolidated financial statements based on facts and circumstances known
to us at that time. We periodically confirm the accuracy of our estimates with the service providers and adjust if necessary. The significant
estimates in our accrued research and development expenses include the costs incurred for services performed by clinical and pre-clinical
vendors in connection with research and development activities for which we have not yet been invoiced.

We contract with these vendors
to conduct clinical and pre-clinical services on our behalf. We base our expenses on our estimates of the services received and efforts
expended pursuant to quotes and contracts with the research and development vendors. The financial terms of these agreements are subject
to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to
our vendors will exceed the level of services provided and result in a prepayment of the research and development expense. In accruing
service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period.
If the actual timing of the performance of services