NOTE 5 STOCKHOLDERS’ EQUITY

On April 2, 2020, the Company entered into an ATM for $50 million utilizing the Company’s shelf registration statement on Form S-3. Under the ATM, the Company may sell shares of its common stock having aggregate sales proceeds of up to $50 million from time to time and at various prices, subject to the conditions and limitations set forth in the sales agreement. If shares of the Company’s common stock are sold, there is a three percent fee paid to the sales agent. For the three months ended September 30, 2021 and September 30, 2020, the Company received net proceeds of $15.0 million and $1.5 million from the sale of 1,659,664 and 227,527 shares of the Company’s common stock, respectively. For the six months ended September 30, 2021 and September 30, 2020, the Company received net proceeds of $22.4 million and $2.4 million from the sale of 2,899,069 and 341,239 shares of the Company’s common stock, respectively. As of September 30, 2021, there was a balance of approximately $14.5 million available under the ATM.

On May 14, 2020, the Company entered into the Stock Purchase Agreement with LPC, which provides for the issuance of up to $40 million of the Company’s common stock which the Company may sell from time to time in its sole discretion to LPC over 36 months, provided that the closing price of the Company’s common stock is not below $0.25 per share and subject to certain other conditions and limitations set forth in the Stock Purchase Agreement. For the six months ended September 30, 2021 and September 30, 2020, the Company received net proceeds of $1.0 million and $3.6 million from the sale of 200,000 and 568,605 shares of common stock, respectively. As of September 30, 2021, there was a balance of approximately $28.2 million available under the Stock Purchase Agreement.

Restricted Stock

The fair value for the restricted stock awards was valued at the closing price of the Company’s common stock on the date of grant. Restricted stock vests annually over five years.

A summary of the Company’s restricted stock awards for the period ended September 30, 2021 is as follows:

  SCHEDULE OF CHANGE IN WARRANTS OPTIONS

Stock-based compensation related to these stock issuances for the three months ended September 30, 2021 and September 30, 2020 was $161 thousand and $377 thousand, respectively. Stock-based compensation related to these stock issuances for the six months ended September 30, 2021 and September 30, 2020 was $319 thousand and $771 thousand, respectively.

Stock Option Plan

The Company’s Third Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”) allows for awards to officers, directors, employees, and consultants of stock options, restricted stock units and restricted shares of the Company’s common stock. The vesting terms of the options issued under the 2013 Plan are generally four years and expire in ten years from the grant date. The 2013 Plan has 5,600,000 shares authorized for issuance. As of September 30, 2021 520,011 shares were available under the 2013 Plan.

BEYOND AIR, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5 STOCKHOLDERS’ EQUITY (continued)

A summary of the Company’s options for the six months ended September 30, 2021, is as follows:

 SCHEDULE OF OPTION ACTIVITY

As of September 30, 2021, the Company has unrecognized stock-based compensation expense of approximately $5.2 million related to unvested stock options which is expected to be expensed over the weighted average remaining service period of 2.4 years. An option to purchase 75,000 shares of common stock was granted to the Chief Financial Officer as an inducement award per the new employment agreement on September 1, 2021. The weighted average fair value of options granted was $7.92 and $5.13 per share during the six months ended September 30, 2021 and September 30, 2020, respectively.

The following were utilized on the date of the grants:

 SCHEDULE OF ASSUMPTION OF BLACK-SCHOLES OPTION PRICING MODEL

The following summarizes the components of stock-based compensation expense which include stock options and restricted stock for the three and six months ended September 30, 2021 and September 30, 2020, respectively

 SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE

On March 4, 2021, the stockholders approved the 2021 Employee Stock Purchase Plan “the ESPP”. The purpose of the ESPP is to encourage and to enable eligible employees of the Company, through after-tax payroll deductions, to acquire proprietary interests in the Company through the purchase and ownership of shares of common stock. The ESPP is intended to benefit the Company and its stockholders by (a) incentivizing participants to contribute to the success of the Company and to operate and manage the Company’s business in a manner that will provide for the Company’s long-term growth and profitability and that will benefit its stockholders and other important stakeholders and (b) encouraging participants to remain in the employ of the Company. As of September 30, 2021 and March 31, 2021, there were no shares issued under the ESPP and 750,000 shares were available for future issuance under the ESPP.

Warrants

A summary of the Company’s outstanding warrants as of September 30, 2021 is as follows:

 SUMMARY OF COMPANY’S OUTSTANDING WARRANTS

For both the three and six months ended September 30, 2021, 415,664 warrants were exercised on a cashless basis in exchange for 271,811 shares. For the three and six months ended September 30, 2020, there were 83,332 and 153,870 warrants exercised for $305 thousand and $598 thousand, respectively.

BEYOND AIR, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)