Form 4: Beyond Air Director's Stock Options Repriced to $1.95

Beyond Air, Inc. director William P. Forbes' stock options were repriced to an exercise price of $1.95 per share, reflecting the company's recent stock performance.

Summary

• Director William P. Forbes' stock options for Beyond Air, Inc. (XAIR) were repriced.
• The Board of Directors approved the repricing, effective November 4, 2025.
• The exercise price for these options was reduced to $1.95 per share.
• This new exercise price matches the closing price of Beyond Air's common stock on November 3, 2025.
• A total of 13,650 stock options held by Mr. Forbes were affected by this repricing.
• The original exercise prices for these options ranged from $5.892 to $10.80 per share.
• All other terms of the options, including vesting schedules, remain unchanged.
• The options were granted under the Company's Amended and Restated 2013 Equity Incentive Plan.

Sentiment

Score: 3

Explanation: The repricing of stock options to a significantly lower exercise price indicates a substantial decline in the company's stock value, suggesting past underperformance. While intended to re-incentivize management, it reflects a negative trend in the company's share price.

Positives

• The repricing of stock options to a lower exercise price of $1.95 per share could re-incentivize the director by making the options more 'in-the-money' or closer to the current market price, potentially aligning their interests more closely with future stock price appreciation from the current level.

Negatives

• The repricing of stock options from higher exercise prices (up to $10.80) to $1.95 indicates a significant decline in the company's stock price, suggesting poor past performance or a challenging market environment.
• Repricing can dilute shareholder value if new options are issued or if it signals a lack of confidence in the company's ability to reach previous higher stock price levels.

Risks

• The need for option repricing suggests a significant decline in the company's stock price, which could indicate underlying operational or market challenges.
• Repricing existing options rather than issuing new ones at current market prices can be viewed negatively by shareholders as it effectively rewards executives for past underperformance.
• Potential for negative shareholder perception regarding corporate governance practices, especially if the repricing is not clearly justified by extraordinary circumstances.

Future Outlook

The filing does not contain explicit forward-looking statements or guidance beyond the continued vesting of options subject to the reporting person's service with the Issuer.

Industry Context

Option repricing often occurs in industries where stock prices have significantly declined, potentially due to market downturns, company-specific setbacks, or broader industry challenges. It is a mechanism to retain and incentivize key personnel when their existing options are underwater, particularly in volatile sectors like biotech or medical devices where stock performance can be highly sensitive to clinical trial results or regulatory approvals.

Comparison to Industry Standards

• Option repricing is generally viewed with skepticism by corporate governance advocates and institutional investors, as it can be perceived as rewarding executives for past underperformance.
• While not uncommon in certain situations, especially in volatile sectors like biotech where stock performance can be highly sensitive to clinical trial results or regulatory approvals, it deviates from best practices that prioritize performance-based compensation without retrospective adjustments.
• Larger, more established companies typically avoid broad repricings, preferring to issue new grants at current market prices.
• Smaller, growth-stage companies, particularly those in R&D-heavy sectors, might use repricing as a tool to retain talent during periods of stock price weakness, but it often requires strong justification to shareholders.

Corporate Governance

Related Party Transactions

• Repricing of stock options for Director William P. Forbes, a related party, reducing the exercise price from up to $10.80 to $1.95 per share.

Stakeholder Impact

• Shareholders: Potential dilution if the repricing is seen as rewarding underperformance; potential positive if it successfully re-incentivizes management for future growth. The immediate signal is negative due to the underlying stock price decline.
• Employees (other option holders): May create an expectation for similar repricings for other employees whose options are underwater, potentially boosting morale if applied broadly.
• Management (William P. Forbes): Re-incentivized with options that are now closer to or 'in-the-money,' potentially increasing motivation.

Next Steps

• The repriced stock options will become exercisable in accordance with their specified vesting schedules.
• The reporting person's continued service with the Issuer is required for the options to vest.

Key Dates

Recommendation

The repricing of director stock options from significantly higher strike prices to $1.95 per share reflects a substantial decline in Beyond Air's stock value, indicating past underperformance. While this move aims to re-incentivize management, it also signals underlying challenges. Investors should hold to assess whether this compensation adjustment effectively motivates future value creation and to monitor the company's operational and financial trajectory following this repricing. Further analysis of the company's fundamentals and market position is required before making a stronger buy or sell decision.

Keywords

Beyond Air, XAIR, Stock Options, Option Repricing, SEC Form 4, Insider Transaction, Director Compensation, Equity Incentive Plan, Corporate Governance