DEF: Beyond Air Seeks Equity Plan Boost, Elects Directors

Beyond Air, Inc. calls for its 2026 Annual Meeting to elect directors, ratify auditors, and approve an increase in its equity incentive plan shares.

Summary

• The company will hold its 2026 Annual Meeting of Stockholders on Friday, January 30, 2026, at 4:30 p.m. Eastern Time.
• Stockholders will vote on the election of six directors, the ratification of WithumSmith+Brown, PC as the independent registered public accounting firm for fiscal year ending March 31, 2026, and the approval of the Eighth Amended and Restated 2013 Equity Incentive Plan.
• The proposed equity incentive plan amendment seeks to increase the number of shares reserved for issuance by an additional 850,000, bringing the aggregate to 1,680,000 shares.
• The Board of Directors unanimously recommends a vote FOR all proposals.
• As of December 3, 2025, there were 8,009,488 shares of common stock outstanding.
• The previous independent registered public accounting firm, Marcum LLP, was dismissed on December 17, 2024, after their report for the fiscal year ended March 31, 2024, included a paragraph regarding substantial doubt about the company's ability to continue as a going concern.
• The company reported net losses of $(48,789) thousand for Fiscal 2025, $(64,295) thousand for Fiscal 2024, and $(59,401) thousand for Fiscal 2023.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the 'going concern' warning from the previous auditor and consistent net losses. While the company is taking steps to retain talent and advance its pipeline, these financial concerns and the significant related-party debt/warrants overshadow the positive governance aspects and strategic intentions.

Positives

• The company is actively seeking to attract and retain talented employees, consultants, and directors through its equity incentive plan, which is crucial for future success and long-term growth.
• The Board of Directors is composed of a majority of independent directors (five out of six), indicating strong corporate governance practices.
• The company has established a clawback policy effective October 2, 2023, complying with SEC regulations and Nasdaq listing rules, enhancing accountability.

Negatives

• The previous independent auditor, Marcum LLP, included a 'going concern' paragraph in its report for the fiscal year ended March 31, 2024, indicating substantial doubt about the company's ability to continue.
• The company has reported significant net losses for the past three fiscal years: $(48,789) thousand in Fiscal 2025, $(64,295) thousand in Fiscal 2024, and $(59,401) thousand in Fiscal 2023.
• The 'Compensation Actually Paid' for the Principal Executive Officer (PEO) was negative $(792,214) in Fiscal 2025 and negative $(4,130,490) in Fiscal 2024, primarily due to changes in the fair value of unvested awards.

Risks

• The company's ability to continue as a going concern is in substantial doubt, as noted by the previous independent auditor, Marcum LLP, in their report for the fiscal year ended March 31, 2024.
• Failure to approve the Eighth Amended and Restated 2013 Equity Incentive Plan could hinder the company's ability to attract and retain highly skilled employees, consultants, and directors, potentially impacting its strategic plan and growth.
• Without sufficient equity incentive shares, the company may need to offer material cash-based incentives to compete for talent, which could negatively impact results of operations and the balance sheet.

Future Outlook

The company anticipates the proposed 850,000 share increase in the equity incentive plan will provide a pool of shares expected to last for approximately 12 months. The executive compensation program aims to create sustainable long-term stockholder value by commercializing LungFit PH and successfully advancing the pipeline to bring additional product candidates to market.

Management Comments

• The Board of Directors believes that future success depends on the ability to attract and retain talented employees, consultants, and directors, and that equity awards are a necessary and powerful recruiting and retention tool.
• Equity awards are considered a vital component of compensation programs, allowing compensation based on company performance while incentivizing long-term stockholder value.
• If a sufficient number of shares are not available under the plan, the company may need to offer material cash-based incentives to compete for talent, which could impact financial results and competitiveness.

Industry Context

The company operates within the biopharmaceutical and medical device technology sectors, where competition for top talent is significant. The reliance on equity incentives to attract and retain personnel is a common strategy in these industries, particularly for companies focused on product development and commercialization like Beyond Air.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• Erick J. Lucera, a current director, was the Chief Financial Officer of Valeritas Holdings, Inc. when it filed a voluntary petition for Chapter 11 bankruptcy protection on February 9, 2020. The plan of liquidation was approved on June 8, 2020, and became effective on June 30, 2020.

Related Party Transactions

• On September 27, 2024, the company issued 494,332 warrants with a strike price of $7.586 to Robert Carey (Director) in connection with a $7,500,000 loan to the company.
• On September 27, 2024, the company issued 164,778 warrants with a strike price of $7.586 to Steven Lisi (Chief Executive Officer and Chairman) in connection with a $2,500,000 loan to the company.
• On November 3, 2025, the company amended and restated the original Loan Agreement to provide for $2.0 million in additional loans from Robert Carey and issued new five-year warrants to purchase up to 512,821 shares of common stock with an exercise price of $1.95 per share.
• The amendment also reduced the exercise price of the 2024 Debt Warrants (issued on Sept 27, 2024) from $7.59 per share to $1.95 per share.

Stakeholder Impact

• **Shareholders**: Will vote on key governance matters, including director elections and the equity incentive plan, which could lead to dilution. The 'going concern' issue and related-party debt/warrants are significant concerns.
• **Employees/Management**: The proposed increase in the equity incentive plan is intended to attract and retain key personnel, offering them ownership stakes and performance incentives.
• **Creditors**: Directors Steven Lisi and Robert Carey have provided significant loans to the company, indicating their continued financial support and interest in the company's stability.

Next Steps

• Hold the 2026 Annual Meeting of Stockholders on January 30, 2026.
• Elect six directors to hold office until the 2027 Annual Meeting.
• Ratify the appointment of WithumSmith+Brown, PC as the independent registered public accounting firm for fiscal year ending March 31, 2026.
• Approve the Eighth Amended and Restated 2013 Equity Incentive Plan to increase reserved shares by 850,000.
• Potentially adjourn or postpone the Annual Meeting if necessary to solicit additional votes.

Key Dates

Recommendation

The filing presents a mixed picture. The 'going concern' warning from the previous auditor and consistent net losses are significant red flags, suggesting fundamental financial challenges. However, the company is actively addressing corporate governance, seeking to retain key talent through an expanded equity plan, and has secured additional related-party financing, which indicates ongoing efforts to stabilize and advance its business. For a seasoned investor, the high risk associated with the 'going concern' and past losses warrants caution, but the strategic initiatives and insider support suggest a 'hold' rather than an immediate 'sell' for those already invested, pending further clarity on financial performance and operational milestones. New investors would likely seek more evidence of financial improvement.

Keywords

Equity Incentive Plan, Proxy Statement, Corporate Governance, Director Election, Auditor Ratification, Stock Options, Restricted Stock Units, Biopharmaceutical, Medical Device Technology, SEC Filing