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

Beyond Air, Inc. director Yoori Lee's stock options were repriced to an exercise price of $1.95 per share, effective November 4, 2025.

Summary

• Beyond Air, Inc. director Yoori Lee had a total of 14,000 stock options repriced.
• The exercise price for these options was reduced to $1.95 per share.
• The original exercise prices for these options were $10.80 and $5.892 per share.
• The new exercise price of $1.95 per share matches the closing price of the company's common stock on November 3, 2025.
• The repricing was approved by the Issuer's Board of Directors and became effective on November 4, 2025.
• All other terms of the options, including the vesting schedule under the 2013 Equity Incentive Plan, remain unchanged.

Sentiment

Score: 3

Explanation: The repricing of stock options, while beneficial for the director, generally signals significant past stock underperformance and can be viewed negatively by shareholders due to potential dilution and a perception of rewarding poor performance. It suggests the company's stock price has fallen considerably, making previous incentives ineffective.

Positives

• The repricing makes the director's stock options 'in-the-money' or closer to it, potentially increasing their incentive value.
• The director now holds 14,000 stock options with a significantly lower exercise price of $1.95 per share.

Negatives

• Option repricing typically indicates a significant decline in the company's stock price, as the original options were likely underwater.
• Repricing can be viewed negatively by existing shareholders as it potentially dilutes their ownership at a lower valuation if the options are exercised.
• It may signal a lack of confidence in the company's ability to reach its previous stock price levels in the near term.

Risks

• Potential shareholder dilution if the repriced options are exercised.
• Negative perception among investors regarding management's confidence and past stock performance.

Future Outlook

NA

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, (the "2013 Plan") 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 often occurs in industries where stock prices have experienced significant declines, and companies seek to re-incentivize management and directors whose original options are underwater. This practice is not uncommon in volatile sectors or companies facing operational challenges.

Comparison to Industry Standards

• Option repricing is generally viewed as a shareholder-unfriendly practice, as it effectively rewards executives for poor stock performance by resetting their incentives at a lower price.
• Many institutional investors and proxy advisory firms (e.g., ISS, Glass Lewis) typically recommend against repricing unless it is accompanied by significant changes in the option terms (e.g., reduced number of options, extended vesting, or a higher exercise price than the current market price).
• Companies like Apple (AAPL) and Microsoft (MSFT) have historically avoided repricing, opting instead for new grants or other forms of compensation when stock performance lags.
• In contrast, some smaller or distressed companies might use repricing as a tool to retain talent when their stock has significantly underperformed, similar to what Beyond Air appears to be doing here.

Corporate Governance

Related Party Transactions

• The repricing of stock options for Yoori Lee, a director of Beyond Air, Inc., constitutes a related party transaction.

Stakeholder Impact

• Shareholders: Potential negative impact due to perceived dilution and the signal of past stock underperformance. May raise questions about corporate governance and executive compensation.
• Director (Yoori Lee): Positive impact as the options are now 'in-the-money' or closer to it, restoring their incentive value.
• Employees (with similar options): May create an expectation for similar repricing actions for other employees whose options are underwater.

Next Steps

• The options will become exercisable in accordance with their vesting schedule, subject to the director's continued service.

Key Dates

Recommendation

The repricing of a director's stock options from significantly higher prices to a much lower market price is a strong indicator of substantial past stock underperformance. This action, while intended to re-incentivize, often signals a lack of confidence in the company's ability to recover its previous valuation and can be viewed as shareholder-unfriendly. It suggests that the company's equity compensation strategy is reactive to poor performance rather than proactive in driving long-term value. For a seasoned investor, this event raises concerns about management accountability, potential future dilution at lower valuations, and the overall health and trajectory of the company, warranting a 'sell' recommendation.

Keywords

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