Good afternoon, and welcome, everyone, to the Beyond Air Financial Results Call for the fiscal quarter ended June 30, 2025. I would now like to turn the call over to Corey Davis from Lifesci Advisors. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, after the market closed, we issued a press release announcing the operational highlights and financial results for Beyond Air's first quarter of fiscal year 2026 ended June 30, 2025. A copy of this press release can be found on our website at www.beyondair.net under the News and Events section. Before we begin, I would like to remind everyone that we will be making comments and various remarks about future expectations, plans, and prospects, which constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Beyond Air cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. We encourage everyone to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Form 10-K and Form 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website, beyondair.net. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 12, 2025. Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. With that, I'll turn the call over to Steve Lisi, Chairman and Chief Executive Officer of Beyond Air. Go ahead, Steve.

Thanks, Corey, and good afternoon to everyone. With me here today is Doug Larson, our Chief Financial Officer. I will be brief today given the update just 7 weeks ago on our fiscal earnings call. We continue to drive strong market adoption of LungFit PH, which was reflected in our financial results for the first fiscal quarter, including a 157% increase in revenue to $1.8 million compared with $700,000 for the same period last year. On a sequential basis, we reported a 50% increase over the quarter ended March 31, 2025. As a reminder, it was only a year ago that we implemented broad changes to our sales team and strategy under the leadership of the new Chief Commercial Officer, David Webster. This strategy included building out our distribution network in the United States and internationally, focusing more heavily on fostering customer relationships. While we quickly reported seeing positive market reactions to the new strategy and team and our backlog of agreements started to build, it's only been over the course of the last 2 quarters that the financial performance of the company has really caught up. That said, our sales pipeline continues to build and the more customers use LungFit PH, the more confidence grows in the product and our ability to provide top-tier service. The key takeaway here is that we are now well-positioned to overcome the barriers to entry in the nitric oxide market with LungFit PH and are well on our way to becoming the market leader with the addition of LungFit PH II in calendar year 2026, pending regulatory clearance. Considering the strong momentum in our business, we are reaffirming our revenue guidance of $12 million to $16 million for fiscal year 2026. I will dig a little deeper into the specific drivers behind our financial performance in the fiscal first quarter of 2026 and for the future. We continue to generate a steady flow of new hospital contracts in the U.S. with two new hospital starts and contract renewals with three hospitals. Some other important points I would like to put out there. One, more than 55% of our contracts are multiyear contracts. Two, this was the first quarter of international revenues being recorded. This comes after a tremendous amount of time spent working with our partners around the world, which we have documented on previous calls and in press releases. To put our current reach into perspective, we now have access to over 30 countries with distribution partners covering more than 2 billion lives. We expect growth each quarter going forward with momentum picking up substantially in fiscal '27. Turning back to the U.S. One of the market barriers we are focused on overcoming are the hospital networks and national purchasing groups. We have just been added to the Premier network, which gives us 2 of the big 3 as we were added to Vizient 2 years ago. Combined, these two GPOs provide us with access to close to 3,000 hospitals. We still have to be highly selective in our targeting until we have the second-generation LungFit system, which is smaller, lighter, and designed for air and ground transportation while still delivering all the revolutionary features of the first-generation machine. We believe that this system will offer capabilities that will allow us to penetrate larger hospitals and larger hospital systems. Overall, we anticipate FDA approval of the second-generation system and subsequent introduction to the U.S. market will have a major impact on our market share, total NO volume, and logistics within the hospital. In regards to the Premier contract, we were awarded a national group purchasing agreement for therapeutic gases. This new agreement allows Premier members at their discretion to take advantage of special pricing and terms prenegotiated by Premier for the LungFit PH system and disposable NO2 smart filters. This is a significant network for us to be aligned with, and we believe it will open a lot of doors for our sales team. Having this purchasing agreement will help streamline the sales process for Premier hospital network members as they contemplate converting their NO supply to LungFit PH. Turning to Beyond Cancer. We are assessing the best path forward for the program at this time. Phase Ib combination study with anti-PD-1 therapy is the target, and we will communicate more details once we secure a clinical trial site. With respect to NeuroNOS, our subsidiary focused on therapies for autism spectrum disorders, I have no further update from the last time we spoke. As a reminder, NeuroNOS will meet with FDA later this year regarding its path to human studies, which we expect to begin by the end of calendar 2026. Our LungFit GO program is still on track for a pre-IDE submission to FDA prior to year-end to discuss the clinical path forward. We continue to be encouraged by the progress across our business. LungFit PH is quickly gaining attention in hospitals across the U.S. and now the world. We look forward to continuing to take market share and build awareness for our system throughout the remainder of fiscal '26. And looking out to fiscal '27, we see the introduction of LungFit PH II, putting us on a path to take the majority of market share over time in what we believe could ultimately be a $1 billion global NO market.

Thanks, Steve, and good afternoon, everyone. Our financial results for the first quarter of fiscal year 2026, which ended June 30, 2025, are as follows: Revenue for the fiscal quarter ended June 30, 2025, increased 157% to $1.8 million compared with $0.7 million for the fiscal quarter ended June 30, 2024. We are showing a gross profit increase of approximately $0.5 million to $0.2 million for the first fiscal quarter of 2026 compared to a loss of $0.3 million for the same period last year. The gross profit increase was due to increasing revenues, partially offset by depreciation of additional LungFit devices. Turning to operating expenses. I just want to remind everyone that as we've talked about on previous quarterly calls, our team has been laser-focused on cost reduction in SG&A, R&D, and our supply chain. Over the first half of calendar 2025, we reduced total operating expenses to just above $7.5 million in the June quarter from $13 million for the same period last year. This translates to a 40% reduction year-over-year and greater than 55% reduction from a high of $17 million at its peak. We believe a trough in our operating expenses will be in the current quarter, which ends September 30, 2025. Please do not interpret that expenses will be moving up significantly in the December quarter. We anticipate expenses will move up in proportion to our commercial performance to maintain our excellence in service and take advantage of coming opportunities. Research and development expenses were $3.1 million for the fiscal quarter in 2026 as compared with $6 million for the same period last year. The decrease of $2.9 million was across the board with decreases in salaries, stock-based compensation costs, clinical and pre-clinical expenses, professional fees, and Gen II device development costs. SG&A expense for the quarters ended June 30, 2025, and June 30, 2024, were $4.7 million and $7.2 million, respectively. The decrease of $2.5 million was attributed primarily to the reduction in salaries, stock-based compensation costs, marketing and advertising, and legal fees. Other expense was $0.5 million compared with a $0.5 million income for the same period a year ago. The increase in expense of $1 million was mainly due to a prior period gain associated with the change in fair value of the derivative liability for $1 million. Net loss attributed to the common stockholders of Beyond Air, Inc. was $7.7 million or a loss of $1.53 per share basic and diluted. Our net loss for the fiscal quarter ended June 30, 2024, was $12.2 million or a loss of $5.32 per share basic and diluted. Please note that the per share results were calculated to reflect the company's 1-for-20 reverse stock split, which became effective on July 14, 2025. As a reminder, we implemented this reverse stock split to regain compliance with Nasdaq Listing Rule 5550(a)(2). I am pleased to announce that Nasdaq has since notified the company that we are now back in compliance with all listing rules. Net cash burn for the quarter was $4.7 million, which is more than 60% lower than the first quarter of last fiscal year. This decrease reflects our reduction in operating expenses, including wrapping up spending on the development of our next-generation LungFit device in the June quarter. We've reported a strong reduction in our cash burn in Q1 and expect to see continued drop again in Q2. As of June 30, 2025, we reported cash, cash equivalents, and marketable securities of $6.5 million. We believe that our cash and existing financing vehicles will be sufficient to allow us to support current operating plans well into calendar 2026 and potentially to profitability, provided we continue to hit our internal revenue estimates and control costs at Beyond Air. And with that, I'll hand the call back to Steve.

Thanks, Doug. We'll now take some questions.

The first question comes from Marie Thibault from BTIG.

Congrats on a nice quarter. I wanted to ask kind of a big picture question here. I know you're confident in your guidance range for the year, and you had some very nice 50% sequential growth this quarter. So really great to see it. How should we think about the various growth drivers coming together this year, Steve? I'm thinking about existing contracts, things like the Premier agreement. Is this all sort of coming together now? Or do we need to see new sources of growth, more acceleration in order for you to kind of hit that range? How are you thinking about it?

Thank you, Marie. We definitely need a bit more clarity over the next seven months of the fiscal year. We don’t have a set range based on our current situation, and that’s intentional. We have numerous opportunities ahead that we expect to win a certain percentage of and achieve our targets, and we feel very confident about this. Premier plays a significant role in that. I don’t believe that having Premier join us in July will greatly affect this fiscal year. It requires time—typically about 4 to 12 months from our first contact with the hospital. With Premier, we’re now engaging their members, while previously our discussions were quite introductory. Serious conversations have only started since joining with Premier. We anticipate some impact this fiscal year, but it will certainly be more substantial next fiscal year. We have solid prospects at hand and are confident in meeting our range. However, it’s not accurate to suggest that Doug and I are sitting here with the 12% to 16% range locked in without any further developments. That’s simply not the case, and I don’t think it needs to be. We still have ample time before the fiscal year concludes.

Sure, that makes sense. You feel confident about being on track. I would like to ask a bit about international markets. You mentioned some acceleration in the press release. Through your partners, you have access to several countries. Are there specific countries we should focus on? Are there opportunities for significant tenders in the coming quarters? I want to gain a better understanding of the international situation.

Yes. As you noted, the tenders take some time. Signing a distribution partner in a country doesn't mean sales will start immediately. Initially, sales to our distribution partners come from demonstration and training devices they use. After a few quarters, we expect to start seeing some successes with hospitals, though the approach varies by country. We anticipate securing wins with hospitals by the end of this fiscal year. Getting partners signed up in the June quarter will mean it takes a couple of additional quarters before we start winning hospitals. It requires time to ship devices, train everyone, and provide marketing materials. So, while we expect to see the benefits of our efforts towards the end of this fiscal year and into the next, the revenues we are currently seeing are from sales to our partners for their training and demonstration needs in their respective countries.

The next question comes from the line of Jason Wittes from ROTH Capital Partners.

Solid quarter. Just first off, now that you've kind of revamped the sales effort with the new COO, can you give us a sense of kind of how long it's taking to go from an initial contact with the customer to finally closing a deal and sending off the machines?

Sure. Yes. I mean, it's anywhere from 4 to 12 months. It does take time from the initial contact. So some are quicker than others and some have long process where they're taking bids from multiple companies, kind of like a tender overseas, a little different here, but those things do exist. So it does take time.

And I mean, I take it, you can tell who's going to take 12 months and who's going to take 4 months depending on the hospital system generally in terms of just your forecasting?

Usually, we have a pretty good guess, yes.

Okay. Sorry. Just wanted to clarify that.

Yes.

Could you provide some guidance on the growth of SG&A OpEx expenses in relation to revenue? How should we model that? Are we looking at this from a percentage or quarterly basis? Any additional details on how to approach the progression for the remainder of the year, considering we are all working within the guidance range you mentioned?

Yes. As Doug mentioned, you will see a decrease in September compared to the June quarter. For the December quarter, expenses are expected to be somewhat similar to those in September, give or take. As we experience growth and higher sales, there will be certain commissions and expenses that increase accordingly. Therefore, expenses may rise, and I don’t believe our cost-cutting measures will fully offset that as we approach the end of this fiscal year. You will notice some fluctuations, which is why the December figures are uncertain in terms of being higher or near September levels. However, in the March quarter, which is the last quarter of our fiscal year, you can expect expenses to increase in line with the rise in revenues.

We take the next question from the line of Justin Walsh from Jones Trading.

You alluded to this, but I was wondering if you could comment on how your engagement efforts are being facilitated by your Premier agreement. Just wondering how much of it is a question of getting your foot in the door, raising awareness, and removing friction for these hospitals.

Yes, being affiliated with Premier eliminates a significant initial obstacle. This allows us to have open discussions with them. One of the advantages of working with group purchasing organizations is that you establish your pricing in the contract, giving us a starting point right away. This process saves some time. So, this is indeed a major barrier that has been removed. Without the Premier partnership, it would be extremely challenging to contract with a Premier Hospital.

The next question comes from the line of I-Eh Jen from Laidlaw & Company.

Congrats on the quarter. My first question is that last time in the middle of the quarter, you gave some guidance in terms of the top line. I just wonder whether this time you have any insights or can you review anything about all the sales so far in this quarter? Then I have a follow-up.

Yes. When we reported our fiscal year earnings last time, there were only about 10 or 12 days left in the quarter, so it was reasonable for us to preannounce that. Now, we're not even halfway through this quarter, so I won't be commenting on quarterly estimates until we reach our fiscal year, which will be next June. We have reiterated our fiscal year guidance, which reflects our confidence.

Sure, I agree, and that looks good. Do you have any guidance on how many hospitals have already installed the LungFit PH?

I don't think we've given that exact number, but it's getting to be a pretty big number. I mean, I guess we could say dozens and dozens of hospitals. So that would be good. I think that's about all I'll say there, yes. But we're certainly growing the hospitals. There's a lot of them using LungFit PH. And the more that do, the more references we get and the more comfort people have with us as a company servicing them. So it's certainly moving in the right direction.

Maybe squeeze one more here. In terms of the two PMA filing, I know you hate to give guidance because that has sort of unpredictable. But nevertheless, just curious what's your current sort of expectation both for the cardiac surgery as well as for the second gen.

Yes. So I'm definitely not going to give timing on this. We're not going to guess what FDA is going to do. But I will say that our focus is on the second-generation machine. And as a smaller company, we want to keep FDA focused on what's important to us. And right now, the second-generation machine is more important to us than the cardiac indication. I think the cardiac indication loses a little bit of its luster with the second-generation machine in terms of the impact it will have. So right now, our focus with our team and with FDA and talking to them is on Gen II and Gen II only.

Okay. That's very helpful. Again congrats and appreciated the confidence though for the guidance.

We take the next question from the line of Jason Bednar from Piper Sandler.

Steve, I wanted to start really to try to follow up on a few questions already. I think a lot of us are really trying to dial-in on the guide just in the context of how the year started. The nature of the business here requires these contracts to steadily build throughout the year and really tap into that nice razor-razorblade model you have. It seems like you need sequential revenue to grow at a 50% quarter-over-quarter pace in the next few quarters to finish near the midpoint of that reaffirmed guide today. I guess beyond that internal confidence you're speaking to, anything more tangible you can give us. I know Marie was asking some questions. There have been some others here. Just anything beyond just like we're confident we can do this that you can help us bridge that gap on getting to that 50% quarter-over-quarter growth that we need to see in the business?

Yes, I'll do my best. We're now partnered in over 30 countries outside the United States. So all of these partners are going to be working with us, and we'll be training them. And we have training sessions in Europe and in the U.S. So we're moving quickly with our partners. So we anticipate that the revenues from ex U.S., just to get our partners up and running is going to be strong throughout the rest of this fiscal year. So that we have a lot of confidence in, and we will be signing more partners before the end of this fiscal year. So there's a lot of confidence on the international side from that perspective. And again, Marie asked about tenders and winning hospitals there. We have very limited amounts of wins in our guidance. So if we do get some wins, and I can say that there are some of the partners out there that have already put their hat in the ring for some tenders. It's early days, but they have in a few countries. So we'll see. So there's definitely some cushion there if we start winning tenders earlier than we expected. And it's definitely possible, but we're not counting on it, right? This is early days on the international side, so we don't want to make any large assumptions, and we haven't in our guidance, okay? So that's the international side. On the domestic side, we've been at this now for close to 3 years. We had to change our commercial team. Our Chief Commercial Officer has been here now 13 months. He's put a lot of things in place. And I think we've already announced a lot of these things, right? We talked about our partnership with TrillaMed. They're going to help us with the Department of Defense and the Veterans Administration. We did partner with Guam at the beginning of this year or the end of last year. And that was just the beginning. This is this was something that there was a need and we stepped up and took care of it. So I think that the rest of the hospitals in the Department of Defense and the Veterans Administration are probably going to follow what the normal rules are, and it takes time to get on kind of like we got on Premier and Vizient. It takes time to get on with the Veterans Administration and DoD. So we expect that to occur at some point in this fiscal year and contribute. With Premier, we'll have more hospitals. I think we'll get some hospitals there. We've been talking to some before this happened. So I think there'll be some follow-through there before the end of the fiscal year. David, our new Chief Commercial Officer, has done a very good job with Vizient and kind of refocusing our efforts and working with the Vizient team. So we have a better relationship there. So we see momentum. We see what's in the pipeline for us. So we're already have this vision of what's staring us in the face for the next 6 months. And our machine is performing extremely well. When you look back 2 years ago, we were still waiting for software updates from the FDA. So our incarnation of Gen I at its peak really started in May of last year. So people are getting comfortable with it. We've signed our first luminary site in Vanderbilt. They've been very helpful. So I think that there's a lot of momentum for us in the U.S. and internationally, so we can get this done. I'm doing my best here. I don't want to give too much information. Everyone is listening. We have competitors. So I'd like to keep it to what I've said. I hope that satisfies your question.

Yes. If I could follow up, maybe to tease it out just a bit more and feel free to share what you're comfortable with. Can you talk about the attribution you'd give to international out of that $12 million to $16 million and if you're comfortable, the pacing of maybe when you think that some of that might layer in throughout the course of fiscal '26? And then point two, you didn't mention it. I don't know if it's possible that you have visibility on contract renewals. You referenced some in your prepared remarks for the first quarter. Are economics there superior to what they were previously? Is that contributing where these are expanded relationships or just better economics for Beyond Air that are also like embedded in that $12 million to $16 million outlook?

In our outlook, we do not anticipate contract renewals exceeding previous levels or renegotiated agreements. While it can occur, some of our renewals involve hospitals using more services than they originally estimated in their first year. We will then re-contract or renew these agreements at higher rates or for more hours, resulting in increased revenue. However, we do not include this in our forecast. Doug is aware that some customers are requesting longer-term contracts due to higher usage, wanting payment certainty. They aim to maintain the same monthly rate, but by months eight or nine, they may have exhausted their allocated hours. We will collaborate with them to find solutions, but we don’t impose penalties or additional costs at contract end; they simply continue paying the same hourly rate if they exceed their hours. It can be challenging for hospitals as they prefer consistent monthly payments. We encounter such requests frequently and work to accommodate both their needs and ours. While this could positively impact our fiscal year, it is not something Doug and I have explicitly incorporated into our model due to its unpredictability. Nonetheless, we do have some hospitals that can support us in this regard.

At this time, we are showing no further questioners in the queue. And this concludes our question-and-answer session. I would now like to turn the call back over to Steve Lisi for any closing remarks.

I'd like to thank everyone for joining in. Have a great evening.

Thank you. Ladies and gentlemen, the conference of Beyond Air has now concluded. Thank you for your participation. You may now disconnect your lines.