Form 4: Beyond Air COO Options Repriced to $1.95

Beyond Air's Chief Operating Officer, Michael A. Gaul, had 53,250 stock options repriced to an exercise price of $1.95 per share.

Summary

• Beyond Air, Inc.'s Chief Operating Officer, Michael A. Gaul, had a total of 53,250 stock options repriced.
• The repricing, approved by the Issuer's Board of Directors, was effective as of November 4, 2025.
• The exercise price for these options was reduced to $1.95 per share, matching the closing price of the Issuer's common stock on November 3, 2025.
• Previously, these options had exercise prices of $10.80 per share for 33,250 options and $5.892 per share for 20,000 options.
• All other terms of the options, including their vesting schedule, remain unchanged and are subject to Mr. Gaul's continued service with the Issuer.
• The stock option awards were issued pursuant to the Company's Amended and Restated 2013 Equity Incentive Plan.

Sentiment

Score: 3

Explanation: The repricing of executive stock options, while intended to re-incentivize management, typically occurs after a significant decline in the company's stock price, which is a negative indicator for existing shareholders. It raises concerns about past performance and potential dilution, despite the positive aspect of executive retention.

Positives

• The repricing of stock options to a lower exercise price of $1.95 per share re-incentivizes the Chief Operating Officer, Michael A. Gaul, by making the options more likely to be 'in-the-money' or closer to it.
• This action aims to retain key executive talent by restoring the motivational value of equity compensation following a significant decline in the company's stock price.

Negatives

• The necessity of repricing stock options from significantly higher exercise prices ($10.80 and $5.892) to $1.95 indicates a substantial decline in Beyond Air's stock price, reflecting past underperformance.
• Option repricing can be viewed negatively by existing shareholders as it effectively grants new options at a lower strike price, potentially diluting shareholder value and raising corporate governance concerns.
• It may signal a lack of confidence by management or the board in the stock's ability to quickly recover to previous highs, where the original options would have been valuable.

Risks

• Risk of continued low stock price performance, as indicated by the need for option repricing.
• Potential for shareholder dissatisfaction and scrutiny regarding executive compensation practices, especially when options are repriced during periods of poor stock performance.
• Risk of perceived dilution of shareholder value if the repriced options become exercisable at a lower, more achievable price, increasing the number of shares outstanding.

Future Outlook

The filing indicates that the repriced stock options will become exercisable in accordance with their original vesting schedules, subject to the Chief Operating Officer's continued service with Beyond Air, Inc.

Management Comments

• On November 4, 2025, the Issuer's Board of Directors approved an option repricing, effective as of November 4, 2025, reducing the exercise price to $1.95 per share, the closing price of the Issuer's common stock on November 3, 2025. All of the other terms of the options remain unchanged.
• This stock option award was issued pursuant to the Company's Amended and Restated 2013 Equity Incentive Plan, as amended, and becomes exercisable in accordance with the vesting schedule specified in the award agreement and as previously reported on applicable Form-4, subject to the Reporting Person's continued service with the Issuer as of the applicable vesting date.

Industry Context

Option repricing is a practice often employed by companies whose stock price has significantly underperformed, rendering existing executive stock options 'underwater' or out-of-the-money. While intended to re-motivate and retain key executives, it is generally viewed with skepticism by investors and corporate governance advocates as it can signal deeper issues with company performance and potentially dilute shareholder value. It contrasts with more shareholder-friendly approaches like performance-based equity grants.

Comparison to Industry Standards

• Option repricing, while not uncommon, is generally considered a less favorable corporate governance practice compared to granting new options at current market prices or using performance-based equity awards.
• Companies like Apple (2006) and Microsoft (early 2000s) faced significant criticism for similar repricing actions, highlighting investor sensitivity to executive compensation adjustments during periods of stock price decline.
• Best practices in executive compensation often emphasize aligning executive incentives with long-term shareholder value creation, which can be undermined by repricing options that were originally granted at higher prices.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential negative impact due to the implied significant decline in stock price that necessitated the repricing. May also raise concerns about potential dilution and the fairness of executive compensation practices when options are repriced.
• Employees (Chief Operating Officer): Positive impact through renewed incentive and potential for future gains from stock options, as the options are now more likely to be 'in-the-money' or closer to it.

Next Steps

• The repriced stock options will continue to vest according to their original schedules, contingent upon the Chief Operating Officer's continued employment with Beyond Air, Inc.

Key Dates

Recommendation

The repricing of executive stock options typically follows a substantial decline in share price, indicating past underperformance. While it aims to re-incentivize management, it can be viewed negatively by investors due to potential dilution and governance concerns. Without further fundamental company updates, a 'hold' recommendation is prudent to assess future operational performance and strategic direction, as this filing primarily addresses executive compensation rather than core business results.

Keywords

Beyond Air, XAIR, Stock Options, Option Repricing, Executive Compensation, Form 4, SEC Filing, Michael A. Gaul, Equity Incentive Plan, Corporate Governance