Item 1.01. Entry into a Material Definitive Agreement.

On May 26, 2021, Beyond Air, Inc. (the "Company") entered into a settlement agreement (the "Settlement Agreement") with Circassia Group plc ("Circassia"), a former LungFit® PH commercial licensee. Under the terms of the Settlement Agreement, the Company retains United States and China commercialization rights to LungFit® PH in exchange for returning $10.5 million in upfront and milestone payments received by the Company in 2019, over a two-year period commencing after the LungFit® PH receives United States Food and Drug Administration approval. Beginning in year three post-approval, Circassia will receive a quarterly royalty payment equal to 5% of LungFit® net sales in the United States, which will terminate once the aggregate payment reaches $6.0 million. The Company now holds full global rights to LungFit® PH.

The foregoing summary of the Settlement Agreement is qualified in its entirety by reference to the text of such agreement, which the Company expects to file as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarterly period ending June 30, 2021.

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