Beyond Air Inc Aktie

Good morning, everyone, and welcome to the Beyond Air Financial Results Call for Fiscal Year Ended March 31, 2026. [Operator Instructions] And now I'd like to turn the call over to Garth Russell with LifeSci Advisors.

Thank you, Operator. Good morning, everyone, and thank you for joining us. Earlier today, we issued a press release announcing the operational highlights and financial results for Beyond Air's fiscal year ended March 31, 2026. A copy of this press release can be found on our website, 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 the 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 identifies 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, www.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, June 26, 2026. 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 now turn the call over to Robert Goodman, Chief Executive Officer of Beyond Air. Bob, the floor is yours.

Thanks, Garth, and good morning to everyone. Also here with me today is Dan Moorhead, our Chief Financial Officer. This is my first earnings call as Chief Executive Officer, and I'm excited to lead Beyond Air during what I believe is a pivotal moment for the company. Over the last several months, I've spent a lot of time with our customers, commercial organization, distribution partners, and board, and those discussions have only strengthened my conviction that LungFit PH represents a significant commercial opportunity to establish Beyond Air as a leader in the nitric oxide market.

As a leadership team, we've become increasingly focused on aligning our commercial strategy, R&D efforts, and operating expenses across our core business. Particularly as we move closer to regulatory approval of our second generation LungFit system. The strategic focus is reflected in what we believe is an important inflection point for the business in the near term. With our Gen 2 system, if approved, we expect to be more competitive and offer a more attractive solution for a broader range of hospital systems with external transport needs. As a result, we see the potential to immediately expand our total addressable market to over $1 billion globally.

Accordingly, our strategy is very straightforward. We are allocating our resources with discipline towards the opportunities we believe can create the greatest near and long-term value, including adoption of our current Commercial LungFit system and preparing for the launch of our Gen 2 system. Fiscal 2026 displayed meaningful progress toward this goal. Revenue increased more than 107% year-over-year to $7.7 million in the currently smaller addressable market, driven by strong retention among our existing customer base and continued new hospital adoption. Importantly, our customer renewal rate was approximately 90%, which reflects the value LungFit PH is delivering in clinical practice and the confidence our customers have in our technology and operational service support.

This high level of customer satisfaction should be directly transferable to the Gen 2 device, and we continue to receive consistent feedback from our potential future customers that they're waiting for our next generation platform to help meet all of their comprehensive INO requirements, including their transport needs. As a reminder, the current label for the LungFit PH does not include transport use outside of the hospital.

If approved, the Gen 2 product is intended to address the limitations through a broader label that would include transport use. We believe this will increase the total U.S. addressable market approximately fourfold to approximately $400 million and expand the worldwide opportunity to more than $1 billion. We've made meaningful progress expanding our commercial reach. We recently announced a national purchasing agreement with one of the top 3 U.S. group purchasing organizations for inhaled nitric oxide therapy. This marks the third major GPO to engage Beyond Air and represents another important milestone in expanding access to LungFit PH across the U.S. Combined with our existing agreements with Premier and Vizient, we now have access to a substantial portion of the U.S. market. We believe these relationships provide an important foundation for continued adoption and growth in the years ahead.

Additionally, we continued to broaden our global distribution network throughout the year and we now have regulatory clearance in over 45 countries. While we remain in the early stages of international commercialization, we believe the growing network provides a significant opportunity for future revenue. As it relates to our Gen 2 LungFit PH system, which is under review at the FDA, we believe this to be the most important near-term catalyst for the company. As many of you know, we submitted our PMA supplement to the FDA in June of 2025 and continue to work through the review process at the expected pace. Based on our interactions with the FDA and the progress of the review process to date, we continue to believe we are on track for potential approval in the second half of the calendar year, although the timing and outcome of the review remains subject to the FDA's discretion.

Accordingly, we continue to prepare for a potential commercial launch by the end of the year 2026. We continue to hear from prospective customers that the anticipated features of the Gen 2 platform, including a smaller footprint, reduced weight, simplified operation, longer service intervals, and ground and air transport availability, may address needs that are not fully met by currently available alternatives.

As a result, we believe the Gen 2 platform could represent an attractive option for certain institutions if approved. In terms of the other programs outside of our core LungFit PH business, we're taking a disciplined and focused approach to capital allocation. Our priority is clear. The Beyond Air team and its resources are focused on the success and growth of the commercial activities around the LungFit PH system, and we will continue to allocate our resources almost exclusively to the LungFit PH system. I believe we're currently operating with a greater focus, stronger commercial momentum, and a clearer path forward. We have expanded market access through leading GPO relationships, strengthened our international footprint, and continue to prepare what will be a transformational Gen 2 launch, if approved.

We believe the strategy I've discussed today establishes a clear road map for continued growth. With fiscal '26 complete, we're transitioning from a March 31 to December 31 year-end and begin operating on a calendar year end. As a result, we're providing revenue guidance for the first time for calendar year 2026 of $8 million. That equates to approximately 15% growth over calendar year 2025. Our first-time guidance for calendar year 2027 is $16 million to $18 million, which would represent over 110% year-over-year growth at the midpoint of that range and assumes FDA approval and commercial launch of the Gen 2 system during 2027 in accordance with our current planning assumptions.

Between expanding market access, growing customer adoption, international expansion, and anticipated launch of Gen 2, we believe the company is entering an important new phase of commercial execution and an imminent inflection point for revenue growth. Before I conclude my prepared remarks, I want to recognize the entire Beyond Air team. Over the past several months, I've had the opportunity to work closely with employees across the organization and have seen firsthand the dedication, expertise, and commitment they bring to the mission. With that, I'll turn the call over to Dan for review of the financial results. Dan?

Thanks, Bob. And good morning, everyone. I'll walk through our full-year financial results for the fiscal year 2026, which ended March 31, 2026. Revenues for the fiscal year ended March 31, 2026 increased 107% to $7.7 million compared with $3.7 million for fiscal year 2025. This growth was driven by increased demand for LungFit PH in both U.S. and international markets. Gross profit for fiscal year 2026 improved $300,000 compared with the loss of $1.7 million in the prior year. This represents a $2 million swing to profitability, which is a meaningful milestone for the company and reflects the operating leverage we are beginning to see as revenue scales.

Turning to operating expenses, R&D expenses for fiscal year 2026 decreased 39% to $10.2 million, compared with $16.9 million for fiscal year 2025. The reduction was primarily driven by decreased employee expenses as a result of prior restructuring activities and lower development costs associated with our Gen 2 device and PMA supplement, which was submitted to the FDA in June 2025. SG&A expenses for fiscal year 2026 were $19.1 million, compared with $26 million for fiscal year 2025, a decrease of 27% or approximately $7 million. The reduction was primarily driven by lower employee-related costs as a result of prior restructuring initiatives.

In total, we reduced our cost structure significantly year-over-year, which in combination with revenue growth drove a 35% or $15.5 million improvement in operating results. Other expense for fiscal year 2026 was $5.3 million, compared with $3.9 million for fiscal year 2025. Net loss attributable to common stockholders of Beyond Air for fiscal year 2026 was $33.2 million, or a loss of $4.01 per basic and diluted share, compared with $46.6 million or $13.77 per share for fiscal year 2025. Net cash burn excluding inflows from financing activities for fiscal year 2026 was $19.1 million, down 56% compared to fiscal year 2025.

As of March 31, 2026, we reported cash, cash equivalents, restricted cash, and marketable securities of $17.3 million. Total long-term debt outstanding was $21.6 million. With that, I'll hand the call back to Bob.

Thanks, Dan. Before we open the call for questions, I want to briefly address our Nasdaq listing. Earlier this month, we announced that the Nasdaq Hearings Panel granted our request to continue listing on the Nasdaq stock market, subject to our regaining compliance with Nasdaq's minimum bid price requirement by July 31, 2026. Following stockholder approval at the special meeting held on June 18, our board approved a 1 for 20 reverse split. As a result, we expect the reverse split positions the company to regain compliance with the bid requirement by July 31 deadline. With that, we now open the call for questions.

[Operator Instructions] Our first question comes from the line of I-Eh Jen with Laidlaw & Company.

Good morning, and thanks for taking the questions. I got 2 here. The first one is in terms of the second-gen supplement PMA application at this point. I know it's on track. Any colors in terms of what level of question has been asked and the responses you already have? And then I have a follow-up.

Yes, sure. Sure. Hello there. Yes. So with the second generation supplement whereas you mentioned, and as we mentioned already, we're completely on track. We've done all types of testing around our software and we did our ventilator testing and cybersecurity EMC testing, bootloader testing, altitude testing. We're doing all this as asked by the FDA as part of this supplement. The supplement, as you know, was put in a year ago, and we're expecting to have our scientific letter, all the I's dotted and T's crossed, momentarily actually we're right finishing that up and then from there the next step is really us getting into additional communication with the FDA. Along the way, they've been incredibly communicative with us. They've gotten back to us really quickly.

They're a great team. So all this information has been kind of passed back and forth, which is helping us know where we stand in the process, and we're looking forward to doing our audits in the upcoming couple of months or so and taking things from there. So, yes, we're really excited about the progress.

Okay, great. One more follow-up here is this. In terms of the $8 million guidance for 2026, would that first include the $1.9 million top line of -- calendar for the first quarter of this year. And if so, would that be the case? And then also, would you call that still fiscal 2026 or something else?

I think I can take that, Bob. It is a little confusing, I agree. But, yes, when we're talking the $8 million for calendar 2026, that would include the $1.9 million we just reported, plus calendar quarters ended 6/30, 9/30, and 12/31. So the $8 million is a pure calendar year end 2026 including the quarter we just reported.

No, no, please, please. Go ahead.

No, so you called the $8 million is also fiscal '26, is that right?

It's not. Again, it's just the 4 calendar quarters within 2026. So the $1.9 million that we just reported for the January through March period plus the 3 remaining quarters in calendar '26. So, again, the $8 million is moderate growth as the Gen 2 launch isn't supposed to happen until late in the year. So we're not counting any Gen 2 revenue in calendar 2026. We expect to see the majority of that coming in beginning in calendar '27.

So the calendar year is aligned or identical to the fiscal year that I guess from that, would that be correct? In other words, if we put into the model, we are just that, or change that, that will be, for example, this quarter, the reported quarter will become also fiscal 1Q '26 quarters, would that be fair?

The quarter we just reported at $1.9 million in revenue would be Q1 '26 calendar. Yes.

[Operator Instructions] Our next question comes from the line of Mike King with Rodman & Renshaw.

A couple of things. In terms of the guidance, first of all, thank you for giving us '27 guidance. But maybe some points on that I'd like to ask about. Number one is what proportion do you think second-gen might be? Second question is in terms of these group purchasing orders, how critical is that to executing against that guidance as opposed to conquering sort of individual accounts. And I'll just stop there and let you answer those.

I can take the first part. I would -- sorry, Bob.

No, no. I was going to suggest that, please.

So if you're talking about 2027 revenue, again, if I was looking at the U.S. portion, because Gen 2 wouldn't be sold internationally to begin with, but if we're talking international, or domestic, sorry, it ends up being about half or maybe a little more than half. We have a lot of business, as Bob mentioned, it's pretty sticky. And so we have good renewal rates. And so we'll have a lot of contracts carrying over year to year. So the Gen 2 stuff that starts coming in '27 makes up around half of the U.S. revenue for 2027.

Okay, great. And then just with regard to sort of a conquest that you need to win in order to make those numbers?

It varies. Again, we're moving from a smaller TAM, so right now, without the transportability, we're dealing with much smaller hospitals and average deal size is on the smaller end. And so we expect that deal size to increase right now. We don't really give out the number of hospitals exactly, but it's going to be less than what we have now, right? So if we're doubling revenue in the U.S., it's going to be probably 50% to 70% more accounts rather than having to double the number of accounts.

Okay, all right, that's helpful. Does the Gen 2, even though despite its smaller footprint, does it have the same capacity as the current generation LungFit?

The capacity difference is, there's a couple of differences here with the 2 products. The Gen 2 was the major differentiator. Outside of both of them, providing unlimited nitric oxide from room air. They both are the fastest as far as speed to treatment. So these products compared to our competitors, you can start them up, you can stop them, you can start them again. And that's very important at the bedside, being able to manage patients and moving them around that way. The major difference between the 2 products once the Gen 2 is approved, as mentioned, not approved now, is that it'll be fully designed for transport. So it'll have the air and ground capability opening up that larger total addressable market. That's the first major one.

That was the part of the market that was being missed and why the addressable market is smaller now. The other major difference is the change and the predictability with how long our duration is between our starts for a device that goes into the field. When we put a device into the field, we don't have to bring it back in for any kind of maintenance. It's like 4 times longer. So that's something that will be a major difference for the cost of goods as well as the customers as far as managing the product so it's really a big difference so much easier to use. It's -- we don't have the storage issues compared to the competitors and it will have that transport capability. So excited about those pieces.

Yes, and if I may, Mike, you did have that one question. It wasn't fully, I didn't get to answer around the GPOs and the criticality of that. Yes, it's going to make a big difference for us. There are some -- in fact, the most recent GPO that we signed, the 1st of April, is up and running with already doing evaluations with us. So part of our contracting, we wanted to make sure that we were able to get in front of some of the flagship hospital systems immediately so we could start doing evaluations. So we start getting product in the hospitals and we can knock the incumbents out. So this is happening now [ lifetime ]. So yes, there's going to be some accounts that are going to be coming on board based off of that.

Bob, do you have a number of the GPOs out there that you think are potential customers and what proportion now that you've penetrated?

Yes, well, so I mean, listen, there's 3 major GPOs in the U.S. that cover roughly around 7,000 hospitals and there's all the different integrated delivery networks that are underneath them. Within those IDNs, those are anywhere from, call it 20 hospitals to 200 hospitals, okay? And with the most recent GPO that we signed up, there's almost a couple of thousand hospitals there. And one of the evaluations that we're working with is responsible for a couple hundred hospitals. Of course, the pilots and the evals that we're doing are with regions within those. So they're groups of 10 and 17 and 22 hospitals within the IDNs. And it just kind of spiderwebs out from there. So we're appropriately approaching the evaluation process with them at the appropriate pace. So it's going great.

Thank you. At this time, we're showing no further questions in the queue, and this concludes our question and answer session. I'd now like to turn the call back over to Robert Goodman for any closing remarks.

We appreciate everybody coming on the call today, and we look forward to providing future guidance and delivering for our shareholders. So everybody have a nice day. Thank you.

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Good morning, and welcome, everyone, to Beyond Air Financial Results Call for the Fiscal Quarter Ended December 31, 2025.

[Operator Instructions]

And now I'd like to turn the call over to Corey Davis of LifeSci Advisors. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us. Earlier today, we issued a press release announcing the operational highlights and financial results for Beyond Air's third quarter of fiscal 2026 ended December 31, 2025. A copy of this press release can be found on our website, beyondair.net, under the News & 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 beyondairnet. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 13, 2026. And 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, Chief Executive Officer of Beyond Air. Steve, go ahead.

Thanks, Cory, and good morning to everyone. With me here today is Dan Moorhead, our new Chief Financial Officer. It has been a pleasure working with Dan over the past several months. He brings a proven track record as a proactive CFO with demonstrated success supporting commercial organizations through periods of rapid growth. I also look forward to his active engagement with the investment community as it becomes fully integrated into the role. Also joining us today is Bob Liberman, our Chief Commercial Officer. Bob assumed the role in October after previously joining Beyond Air as a Board member back in June.

Let me start my prepared remarks by saying just how pleased I am to speak with you today and provide an update on what has been a productive and meaningful period for our company. We have achieved several significant milestones, strengthened our balance sheet to support continued commercial execution and made a strategic decision to sell our NeuroNOS subsidiary in exchange for equity in the acquiring company and up to $32.5 million of upfront development and commercial milestone payments. We believe these recent events have strengthened our ability to execute our commercial strategy and create long-term value for our shareholders.

Let me walk you through these updates in greater detail. Starting with our core business. Revenue in the fiscal quarter increased 105% year-over-year to $2.2 million. This represents continued progress as we scale adoption and expand awareness of LungFit PH in clinical settings. We now support more than 45 hospitals across the United States and internationally that have adopted our first-generation LungFit PH system. Our through feedback has been encouraging, with retention exceeding 90% and more than half of customers under multiyear agreements.

We believe this installed base positions us well to support continued revenue growth from our first generation system while preparing for the anticipated FDA decision for our second generation system. Our commercial team continues to refine its targeting strategy, prioritizing hospitals most likely to adopt a lung for PH today and expand usage following approval of the second-generation system, which we expect to receive before the end of calendar 2026, subject to regulatory review and clearance. We are making steady progress building relationships with clinicians, administrators and health care systems.

Our current objective is to continue to expand Gen 1 system utilization through calendar 2026 in the U.S. and internationally, while preparing for the potential launch of our second generation is approved. As previously discussed, Gen 2 system is designed to offer reduced size and weight, simplified operation, extended service intervals, improve backup system functionality and very importantly, compatibility with both air and ground transplant. We believe these enhancements will expand the addressable market relative to Gen 1 and support broader adoption over time.

At this point, I'm going to pass the call over to Bob Goodman who has made excellent progress since taking the reins as Chief Commercial Officer about 4 months ago. Bob?

Thanks, Steve. And let me begin by saying I share Steve's enthusiasm about the opportunities here for Beyond Air as well believe that 15 pH is the best-in-class nitric oxide solution globally. Feedback from U.S. customers and international partners on system performance and customer support have been extremely positive, providing a solid foundation for continuous growth. We have national group purchasing organization agreements with Premier and Vizient, which together provide access to nearly 3,000 hospitals across the United States. As awareness of LungFit PH increases, we expect additional opportunities at the GPO and integrated delivery network level in 2026.

As previously announced, we have been working with TriliMed to support our engagements with the federal health care systems. I'm pleased to announce that together with this valued partner, we completed the first sale of Onfi PH to a VA Medical Center. This initial commercial sale, the VA hospital system establishes an important foothold opening potential pathways for future orders and broader adoption across the system, it provides access to the largest health care network in the United States. Internationally, we continue to see strong engagement from our distribution partners.

Over the past several months, we've expanded our global LungFit PH distribution network with new agreements in Canada, Germany, Brazil, Austria, the Netherlands and Sri Lanka, bringing total international coverage to 40 countries. As we broaden our global footprint, we are laying the groundwork for long-term growth and positioning Beyond Air to serve a significantly larger addressable market. It is important to note that we are live in a few hospitals with 1 pH and have already begun to see repeat orders for accessories from several countries.

Taken together, these commercial, operational and strategic developments give me confidence in the trajectory of the business. What also gives me confidence of the people at Beyond Air, the dedication of this team is second to none that I've been in this business for decades. This includes all the aspects of the team from clinical support, the marketing to customer service, to engineering to finance to regulatory to quality, et cetera. Our people are fully engaged and dedicated to the vision of improving the lives of patients and medical staff with lung at PH.

I also want to emphasize the advantages that Steve mentioned earlier on our second-generation system. From my time spent with customers and potential customers in the United States, I believe the Gen 2 system addresses everything on the wish list from clinicians and hospitals. I'm extremely confident that I, along with the team here, will execute on our vision of becoming the global nitric oxide leader.

Now I'll turn things back over to Steve.

Thanks, Bob. Turning to Beyond Cancer. We recently announced that our abstract was selected for the 2026 AACR Annual Meeting, which is taking place from April 17 to 22 in San Diego, California. As previously announced, the study enrolled 10 subjects at doses of 25,000 and 50,000 parts per million of nitric oxide gas delivered over 5 minutes intratumorally. These patients all had metastatic disease and were heavily pretreated. All subjects had a life expectancy of less than 12 months. We have already reported that the safety profile observed to date is acceptable. The data presented at AACR will include updated overall survival data for which median survival has not yet been reached as of October 1, 2025.

We remain dedicated to pursuing the Phase Ib combination study with anti-PD-1 therapy, and we will communicate more details as we progress. With respect to NeuroNOS, our neurology-focused subsidiary, on January 13, 2026, XTL Biopharmaceuticals announced a binding letter of intent to acquire neuromas in exchange for Beyond Air's approximately 85% ownership interest Consideration includes a 19.9% stake in XTL, $1 million in cash and milestone-based contingent payments totaling up to $31.5 million. Following closing, neurons is expected to serve as XL's flagship platform for autism and our oncology development.

We believe this agreement provides the potential to create meaningful value for our shareholders by enabling NeuroNOS' pipeline to advance with dedicated focus and funding through XTL Bio. We will not provide additional commentary beyond public disclosures, while the transaction remains pending.

To conclude, the $5 million financing completed in January 2026, together with the previously announced promissory note and equity line of credit for up to $32 million with Streeterville Capital that we announced in November 2025, provide resources to support commercial execution and readiness for the second-generation lunged system. We remain focused on disciplined execution in delivering advanced nitrogoxide solutions to clinicians and patients around the world.

Now I will turn it over to our CFO, Dan Moorhead.

Thanks, Steve, and good morning, everyone. I'm excited to join my first call since being appointed CFO about 7 weeks ago. I still have a lot to learn but I'm incredibly impressed by what the team has achieved not just over the past year but even within the past few months. The progress has been extraordinary, and I see a bright future ahead as the team continues to execute on our growth strategy.

Our financial results for the third quarter of fiscal year 2026, which ended December 31, 2025, are as follows: Revenue for the fiscal quarter ended December 31, 2025, increased 105% to $2.2 million compared with $1.1 million for the fiscal quarter ended December 31, 2024. On a sequential basis, this represents a 21% increase compared with last quarter. Gross profit increased to $300,000 for fiscal third quarter 2026 compared to a gross loss of $200,000 for the same period last year and a gross loss of $300,000 in the prior quarter.

Turning to operating expenses. We continue to see reductions across SG&A, R&D and in our supply chain as a result of cost reduction initiatives taken in the past 12 months as well as the decrease in R&D costs related to our Gen 2 device, which are mostly behind us since the PMA was filed with the FDA. Total operating expenses for the fiscal third quarter of 2026 will reduce to approximately $6.9 million, which is down from $10.7 million for the same period last year.This translates to a 36% reduction year-over-year and a greater than 60% reduction from the high of $17 million at its peak.

Research and development expenses were $2.4 million for fiscal third quarter of 2026 as compared to $3 million for the same period last year. As I mentioned earlier, the year-over-year decrease was primarily driven by lower development costs associated with our Gen 2 device with the remaining reduction attributable to a decrease in head count and related costs.

SG&A expenses for the quarter ended December 31, 2025, and December 31, 2024, were $4.5 million and $7.7 million, respectively, a decrease of 42% year-over-year. Almost all of the decrease of $3.3 million was from a reduction in employee-related costs. Other expense was $1 million compared to $2.4 million for the same period a year ago. The decrease in expense of $1.5 million was primarily attributed to the prior period loss associated with the extinguishment of debt of $1.9 million.

Net loss attributed to common stockholders of Beyond Air was $7.3 million or a loss of $0.85 and per share basic and diluted compared with $13 million or a loss of $2.96 per share basic and diluted. Please note that the per share results for both periods were calculated to reflect the company's 1 for 20 reverse stock split, which became effective on July 14, 2025. Net cash burn for the quarter was $4.3 million, which is a reduction of over 40% versus a year ago.

We believe our overall cash burn will continue to reduce as revenue grows and will only get better until we get approval and start building inventory in preparation for the launch of Gen 2. As of December 31, 2025, we reported cash, cash equivalents restricted cash and marketable securities of $17.8 million. Subsequent to the end of the third quarter, we completed a $4.5 million equity financing net of issuance costs, and we believe this capital provides us with a cash runway in the calendar year 2027 and potential to profitability provided we continue to hit our current revenue estimates and continue to control costs.

With that, I'll hand the call back to you.

Operator, we'll take questions now.

[Operator Instructions] The first question comes from the line of I-Eh Jen with Rodman & Renshaw.

I have a couple of questions, if you don't mind. I just wonder if you could talk a little bit more about the sales process. I think it's great breakthrough that you've got sales into the VA system or VI Hospital, I should say. But it brings up the topic of the VA system, as you mentioned. How do you penetrate systems rather than a single hospital at a time. What needs to happen in terms of the sales process or the RFPs or things like that, that can see us knocking off more than 1 health care facility at a time.

For the question.

Yes, go ahead, Bob. We take this one. Yes, sure. And then you can definitely provide any color if you like, Steve. Thank you Yes. So Mike, with the VA system, we're on, as you know, and our product is being offered through the ECAT system. So that catalog actually makes it an easier approach for our customers to get to us directly. It's outside of an RFP process but we're still able yes, we're still able to actually compete with other RFPs that come out through -- there's a couple of different ways of the VA contract with vendors. So yes, so we have access that way, so it's great.

Okay. And in your formal comments, you mentioned words to the effect that you're identifying facilities most likely to acquire the system. How do you -- how do you -- or can you say how you identify them? And maybe help us understand how you're targeting those facilities.

Yes. So -- so we've done a really good job standing up our commercial organization, both in the U.S. and internationally. And right now, what we're doing is we're focusing and not to say an overhaul, but more of an exactness with our people and our process and our technology. So different prospecting tools with good intelligence and good CRM regular follow-up with the customers and taking the process of real good demand generation where we're getting top of the funnel looks at our customers and having really good pipeline discipline so we could get in front of the right customers and then to have our people, the people part of it in the right places at the right time with the right coverage.

So we have that right reach and frequency getting in front of these customers and just getting in front of more and more. So we have that touch. So yes, we've been really refining that and the customers are really responding well for our ability to get in front of them.

That's great. Has there been any appreciable change in the length of the sales cycle?

Yes. I mean that pretty much might still remain the same. At the real front end, if you get kind of real lucky based off of the timing of a contract that might be expiring and that customer is really, really organized, and you can knock out a real quick demo in the valuation. You could do that in that 4- or 5-month time frame. But it's really in that right around 6 to 9 months, and it could be longer. But what we're doing is a good job identifying the customers and again, reaching out to them and finding out where they're at with their contract and making sure that they see the value of our product. And with that, we're hoping that, that might restrict is just a bit. But we're really organized and our clinical teams are out there in the field with our sales teams to make sure that we're in front of them as early as possible.

Okay. And I pause 1 more quick one. How do you segment or can you segment the next-gen system so that is this typical of a lot of businesses where a next-generation chip, let's say, is coming out or something in the sales cycle kind of contorta effect where the purchaser may hold off until the nextgen system is available. Is that a concern? Or are you segmenting a different market with the new system?

Yes. So we're focusing right now, as you'd expect, on our first-generation product, and it's been really well received the version 24 of the of Gen 1. So -- and we're focusing on the nontransport systems, okay, and we're being really well received there as there's natural conversations within the market, transportation systems, that's a later on Gen 2 conversation, and we're really kind of breaking away from those conversations but being aware that these are systems that are going to want to be working with us in the future.

The next question is from the line of Marie Teva with BTIG. welcome Bob and Dan. I wanted to quickly just check in on anything, any communications you've been having with the FDA on the Gen 2 process. to speak to your confidence in the time line, I think you said by end of calendar year. And then what will be needed to do post clearance in terms of building inventory kind of a time line we might think about before you can go into a formal launch and ramp.

Okay. Thanks, Marie. Well, I'll comment on the FDA side. So we've been having a fairly constant communication with FDA and we're very happy with the interaction. We don't really see any major hurdles everything that FDA has asked for will provide them. It shouldn't be a problem. And I'm sure there'll be -- the process will continue with the FDA, and we'll continue to answer the questions as we go forward. We still are waiting on the work to be completed with our contract manufacturers, so we can be inspected and that's essentially in our minds, what the gating factor will be from a timing perspective. So we feel highly confident in the time lines that we provided given the state of affairs today. I don't know if I can gave you the answer you need that there's other things you want to ask.

Yes. Yes, that's great to hear.And then I guess I'll ask a quick follow-up here on the international side, I know you've got some great partnerships and some efforts going on there. So any wins or any catalyst to think about on the international side?

Sure. Bob, do you want to take the international question.

Yes, sure. So we have had some recent wins, which is great. I think, as you know, from the the past calls, it was all about setting up and getting our distributors armed with our demo devices, so they get in front of the systems, but then there's the whole part of the process with whether it's Europe or Middle East or Australia, where it's mostly tenders compared to the U.K. or Portugal where there's a national frame or you get that hunting license like Germany and APAC, where you can go direct. So with all those different regions, yes, we've had wins. And on top of having wins, we're now actually seeing customers reorder filter.

So the product is being deployed into hospitals now, which is great, and we're starting to, again, get that stickiness. So it's fantastic.

Our next question is from the line of Justin Walsh with Jones Trading.

Wondering if you can provide any color on what attracted XTL biopharmaceuticals to be interested in the neuro nose opportunity. And then how, I guess, collaboration or working with them will look going forward, given that you still have a stake in that company?

Thanks for the question. So yes, Justin, look, XL was a company looking for an asset, and there were multiple choices for that. I think what excited them about this opportunity is the science. I mean, there's been 2 papers, landmark papers published about the work done by Dr. Amal who's the scientists and the innovator behind this, this approach to treating autism as well as gliolesoma want people to recognize that the functions of metric oxide in the brain or numerous. So I think that's what attracted them to this. There's a clear path to human studies.

I think a lot of the work that's been done by the [indiscernible] has given that clarity to anybody who's taken a look under the hood. So I think it's just a matter of providing the what they require, which is pretty straightforward. It's just a matter of getting that work done. So with XTL coming up with funding, and I'll be able to bring this into humans. So I think the attractiveness was great science, clear path to human trials.

And as everyone on this call probably knows, translating efficacy from rodents to humans is something that's difficult to predict, but we'll find out. And I think that's what attracted and we're going to get there and do that study and figure out if the efficacy translates. And if it does, we're looking at a potential treatment for for autism and glioblastoma at this point. So it's very exciting. Just a little bit early for Beyond Air to maintain and and funds. So this is why a transaction was done, and we're very happy that a lot of this transaction for Beyond Air is us getting a 20% stake in the new entity that's the confidence we have that this is going to be in human trials. And we have confidence on the safety side for sure. And the efficacy side, we'll see what happens.

Next question is from the line of Jason Kolbert with David Boral Capital.

Can we talk a little bit about COGS and how COGS performed in the quarter? And over the next couple of years, what do you think is sustainable COGS is?

Dan, do you want to take that one?

Sure. We tend to see GEN 1. Gain, we think we're in a -- and Steve can help me on this. I'm still pretty new on it. But we expect COGS long term as we get to scale in the 60% range and moving up towards 70% with the Gen 2 product. But in the near term, again, with revenue levels growing, but growing at a more moderate pace until we hit the Gen 2 launch. Again, I think you're going to see it pretty close to that what you saw in Q3 and continue to grow from there. But long term, I think that gives you a little profile. And I'm guessing you guys have possibly talked about that in the past as well.

And just a follow-p if u don't mind. Yes, I think Dan is right in what he says, but I would -- there are a couple of factors and like Dan said, barely 2 months in, there are a couple of factors that we're still trying to figure out with respect to the margin and that will be from a pricing side of the market. So I think that goal of 70% with the Gen 2 is a great goal, that's target. If it's 65 to 65. That's not the end of the world for us. But I think that's our target. And I think we'd like to hit it. And target with Gen 1 would be to get close to 60%. But again, I think an 1 is more of a 50 type thing. But again, it's going to depend on how the price shakes out in the market at the end of the day. And that remains to be seen.

You had a follow-up, Jason?

Very helpful. Can you talk also about SG&A and how sensitive the sales cycle would be to increasing SG&A, hiring additional salespeople how does that impact kind of revenues? What I'm trying to do is get a handle on more capital deployed in SG&A. Does that translate into more revenues?

Well, Jason, I mean [indiscernible]. .

The next question is from the line of Yale Chen with Ladlaw.

Just in the press release, you mentioned that for the Gen 2, that has the potential of extending the service intervals. Could you elaborate a little bit more on that specific aspect.

Your live for a question. Please go ahead.

Please stand by, ladies and gentlemen, we're experiencing tectorial, please our conference resume momentarily.

[Technical Difficulty]

Ladies and gentlemen, on our call will resume momentarily.

Steve, you're now reconnected.

Sure. Steve, I believe in the press release, you mentioned that the second gen will have the potential of extending the maker longer service intervals. Could you elaborate a little bit more specifically on this particular aspect. And then I have a follow-up.

Yes, I appreciate that question. So the current system, the first generation system every 1,000 hours, we need to bring it in for service. So that can be -- that can -- it could be a slight disruption for the hospital if they're using a couple of thousand hours a year per machine, so we might be in there every 6 months rotating machines. So it's a smooth process but it's an expensive process for us, right? So we just come in drop them a new machine and pick that 1 up and bring it in for service.

So it's not very frequent but it's something we'd like to improve upon. So with the second-generation machine, we think that service interval will be pushed out to at least 3,000 hours before we need and potentially longer. So testing is still going on. We haven't reached that juncture yet where the reliability testing that we're doing has stopped. So it's still ongoing. So we're past the 3,000-hour mark at this point, which means it's at least 3x longer before we have to go in. So if we were going in every -- at a hospital, let's say we're going in every 10 months, now we're going in every 30 months on average.

Before we have to swipe out the machine. So that's -- it's certainly better for the hospital from that standpoint, although I don't think the swap outs are really a problem for them because our team does a great job and it runs so smooth. But from a gross margin perspective, I think that's the impact that you heard about earlier on a question when Dan and I were responding to the gross margins between Gen 1 and Gen 2.

Okay. Great. And maybe just a touch on that to this 1 a little bit, which is that would this be needed -- you mentioned you're still testing for maybe even longer integral for the service needed? Would that be required before you submit for the general review? Or that's something that could be the general review without having this particular aspect.

No. This is -- so there is a reliability hurdle with FDA. We've already passed that hurdle. So anything that we get is just more of a guide for us for service with our customers. That's really what it is. So it's not a gating factor for FDA approval.

Okay. Great. Maybe 1 more question. So on the on the oncology side that since you guys already have a little bit more cash in hand, should we think about the Phase II -- Phase Ib study potentially to start later this calendar year and tax.

Well, I don't know when it will start, Yale. We're certainly speaking with people and looking at that -- so I don't want to commit to a time line at this point. While we do have a nice balance sheet at this moment in time, I think we need to focus the balance sheet on the commercial operations at this point. So it would probably not be something that Beyond Air would commit to fully fund the study like that. maybe once we are more comfortable with our path to profitability. That could be a different conversation that we have internally.

Okay. Great. That's very helpful. And congrats on the good quarter in terms of the top line.

Thank you. At this time, we are showing no further questions 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.

Now I'd just like to thank everybody for dialing in today. Bye-bye.

Thanks, everyone, for their time today. You may now disconnect your lines at this time, and have a wonderful day.

Good afternoon, and welcome to the Beyond Air financial results call for the fiscal quarter ended September 30, 2025. [Operator Instructions]

And now I would like to turn the call over to Garth Russell, Lifesci Advisors. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, after market close, we issued a press release announcing the operational highlights and financial results for Beyond Air's second quarter of fiscal year 2026 ended September 30, 2025. A copy of this press release can be found on our website, 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, www.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, November 10, 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. Steve?

Thanks, Garth, and good afternoon to everyone. With me here today is Doug Larson, our Chief Financial Officer. We continue to receive highly encouraging feedback from hospitals using LungFit PH, reinforcing the clinical value and operations efficiency our technology delivers. Adoption is accelerating meaningfully over the past year, contributing to a 128% year-over-year revenue increase in the fiscal second quarter, reaching $1.8 million, up from $0.8 million for the same period last year.

While we are pleased by the strong year-over-year growth, sequential growth was essentially flat compared to the prior quarter, reflecting the timing of hospital purchasing cycles and the natural variability in international shipments. We view this stability as an encouraging baseline from which we expect sequential growth to resume over the coming quarters. We continue to navigate the inherent complexity of hospital sales cycles in the U.S. and internationally. These extended lead times and institutional decision-making processes have led to peaks and valleys in our quarterly sales performance as seen in the September quarter. Importantly, our sales pipeline remains robust, and we see substantial greenfield opportunities across the U.S. as awareness and interest in LungFit PH continue to build.

Before getting into further details, let me highlight the changes that have occurred since our last update in August. We have raised $12 million in debt, and we'll file a registration statement for an additional $20 million through an equity line of credit, both with Streeterville Capital, which solidifies our balance sheet. We believe these additional funds will give us the ability to properly address the pace of sales growth with our first-generation system and prepare for the launch of our second generation system.

LungFit PH has been placed in the first hospital outside the United States for commercial use. We have named our Board member, Bob Goodman as Interim Chief Commercial Officer, given the departure of David Webster. We are updating our fiscal year '26 guidance to $8 million to $10 million. We introduced our capital purchase sales model in the United States and had our first hospital purchase of LungFit PH. We collected data from Beyond Cancer's Phase Ia trial with 10 subjects with ultra-high concentration nitric oxide or UNO. That shows median survival has not yet been achieved and currently sits at 22 months.

These updates have put us in a very strong position and provide us the financial runway we need to optimize the Gen II launch in late calendar 2026 and drive our international business from the strong foundation we have already built. As you all know, we were awarded a national group purchasing agreement for therapeutic gases with Premier. Coupled with our agreement with Vizient, we now have access to nearly 3,000 hospitals. We are confident that our targeted commercial strategy, supported by the right people now in place and strengthened by our Premier and Vizient GPO contracts will begin to have a meaningful impact on revenue over the coming quarters.

Our disciplined approach is allowing us to prioritize the highest value hospital opportunities while deepening relationships across our existing accounts. This focused execution is already translating into broader market engagement and increased visibility of LungFit PH within key hospital systems. At the same time, we are preparing for the next major inflection point with our second-generation LungFit system, which is smaller, lighter and designed for both air and ground transportation, while maintaining all the revolutionary features of the first generation LungFit PH.

We believe this next-generation platform will enable us to expand into larger hospitals and health systems, further accelerating adoption and cementing LungFit's position as the standard for nitric oxide delivery. We anticipate commercial launch of the second-generation system in the U.S. market in late calendar year 2026, pending FDA approval.

As a significant aside, several of our existing customers have extended their annual contracts with multiyear agreements, while increasing anticipated annual volumes. We see this as a confirmation of the ease of use and the value proposition of LungFit PH, and we expect this trend to continue.

During the quarter, we finalized and have since launched a new sales model that complements the traditional industry leasing model. Under this new approach, hospitals may now purchase LungFit PH systems outright while continuing to generate recurring revenue for Beyond Air through disposables and service agreements. Initial system sales occurred subsequent to quarter end, and the early reception has been extremely positive. We are very excited by the flexibility this dual model approach offers and the opportunity it creates to accelerate adoption of LungFit PH.

Today, we announced the appointment of Bob Goodman as Interim Chief Commercial Officer, following the departure of David Webster. Bob joined the Beyond Air Board earlier this year and brings deep commercial and operational expertise from leadership roles at BioTelemetry, Philips Healthcare, Cardiocore, Thermo Fisher Scientific and Pfizer. His experience spans public companies, private equity-backed businesses and early-stage ventures, where he has consistently driven innovation, operational scale and commercial success. We have greatly valued its contributions to the Board and look forward to the fresh perspective and leadership he brings as we ramp up commercial activities and, as I just mentioned, prepare for the highly anticipated launch of our second-generation LungFit PH.

A key driver of our long-term growth strategy over the past year has focused on the expansion of our global distribution network. During the September quarter, we added new distribution partnerships in Japan, South Korea, Mexico, Costa Rica, Guatemala, Panama and El Salvador. These new agreements significantly broaden our geographic reach and demonstrate growing demand from both mature and emerging health care markets seeking modern, cylinder-free nitric oxide delivery solutions. Importantly, we achieved our first international commercial placement of LungFit PH into hospitals outside the United States this quarter.

These initial system sales marked a key validation of our technology's global applicability and confirm that our value proposition, improve safety, reduce logistical burden and long-term cost savings is resonating strongly with hospital administrators and clinicians. We continue to see excellent engagement from our distribution partners who are now actively seeking regulatory approvals or demonstrating LungFit PH in hospitals in their local markets. These latest agreements bring our total international coverage to 35 countries, representing a combined population of approximately 2.8 billion people, and we expect to reach our goal of 60 countries under partnership in calendar 2026.

As local distributors begin converting opportunities into active installations and sales, we anticipate international revenue contribution to build steadily through fiscal 2026 with momentum accelerating into fiscal 2027. This growing global footprint positions Beyond Air to capitalize on significant untapped demand for LungFit PH and lays the foundation for broader global adoption following additional regional approvals.

To wrap up our remarks around LungFit PH, I have two more positive updates to share. We had a patent allowance for a design patent that covers our second-generation LungFit PH through 2040. And we had data shown by a physician at the Extracorporeal Life Support Organization Conference in September, which show positive results when LungFit was used in the ECMO sweet gas circuit on neonates.

I would like to provide an update on the data from Beyond Cancer's Phase Ia study. As a reminder, study enrolled 10 subjects at doses of 25,000 and 50,000 parts per million nitric oxide gas delivered over 5 minutes intratumorally. These patients all had metastatic disease and were heavily pretreated. The mean number of total prior surgeries, radiation and medications was 10.3 with a minimum of 4 maximum of 18. The mean number of all prior medications only was 5.5 with a minimum of 2 and a maximum of 14. All subjects had a life expectancy of less than 12 months when we treated with UNO therapy. The only adverse event which occurred in one patient that was possibly attributable to nitric oxide was a Grade 3 vasovagal response. Otherwise, the safety profile is very clean for this patient population.

With respect to overall survival, the median and mean are 22 months and 21.2 months, respectively. These survival numbers will continue to increase, but we have not yet reached the final median survival. Given these impressive data, we are assessing the best path forward for the program at this time. We remain dedicated to pursuing the Phase Ib combination study with anti-PD-1 therapy, and we will communicate more details as we progress.

With respect to NeuroNOS, we recently announced that the U.S. FDA granted Orphan Drug Designation to its investigational therapy, BA-101 for the treatment of glioblastoma. The NeuroNOS team is working closely with regulators, investigators, patient groups and the foundations to accelerate development of BA-101 towards a first-in-human study. This program is in addition to the development for BA-102, an investigational therapy for the treatment of Phelan-McDermid syndrome, or PMS, syndrome associated with autism. We expect the IND submission for the first-in-human study by the end of calendar 2026. As a reminder, the FDA has also granted orphan drug designation to BA-102 for PMS.

I will wrap up by stating how energized we are following the financing, which will support the continued progress of our global commercial activities and help us prepare for the potential launch of the second-generation LungFit PH. Promise of LungFit is apparent, and we are thankful to the team at Streeterville, taking the time to appreciate our vision to provide clinicians and patients around the world with the optimal NO system.

Now I will turn it over to our CFO, Doug Larson.

Thanks, Steve, and good afternoon, everyone. Our financial results for the second quarter of fiscal year 2026, which ended September 30, 2025, are as follows: Revenue for the fiscal quarter ended September 30, 2025, increased 128%, $1.8 million compared with $0.8 million for the fiscal year ended September 30, 2024. We showed 3% growth versus last quarter. Steve mentioned how our revenue is a little chunkier now given an international ramp is never straight up.

We are showing a gross loss of $0.3 million for the fiscal second quarter 2026 compared to a loss of $1.1 million for the same period last year. The improvement was primarily attributed to sales growth. Our margin slipped back negative this quarter due to costs required to upgrade our existing fleet of devices and provisions for excess inventory.

Turning to operating expenses. We continue to see cost reduction across the board, in SG&A, R&D and in our supply chain due to cost reduction initiatives we took in the last 12 months. For the second quarter of fiscal 2026, we reduced total operating expenses to just above $7.4 million from $11.7 million for the same period last year. This translates to a 37% reduction year-over-year, and greater than 56% reduction from a high of $17 million at its peak. Going forward, we anticipate R&D expenses will decrease slightly next quarter as the cost related to our Gen II device are mostly behind us. SG&A expenses will only move up in line with our commercial performance to maintain our excellence in service and take advantage of coming opportunities.

Research and development expenses were $2.5 million for fiscal quarter 2026 compared to $4.6 million for the same period last year. Half of the decrease of $2.1 million was due to a reduction in development costs for our Gen II device while the other half was mostly attributed to a decrease in salaries and stock-based compensation costs. SG&A expenses for the quarters ended September 30, 2025 and September 30, 2024, were $4.9 million and $7.2 million, respectively. Almost all of the decrease of $2.3 million was from a reduction in salaries and stock-based compensation costs.

Only part of the business that saw an increase in SG&A was a NeuroNOS as they start to build a little bit of infrastructure to support the groundbreaking work being done there. Other expense was $0.6 million compared to a $1.2 million expense for the same period a year ago. The decrease in expense of $0.6 million was primarily attributed to the prior period loss associated with the partial extinguishment of debt.

Net loss attributed to common stockholders of Beyond Air, Inc. was $7.9 million or a loss of $1.25 per share, basic and diluted. Our net loss for the fiscal quarter ended September 30, 2024, was $13.4 million or a loss of $5.67 per share, basic and diluted. Please note that the per share results for both periods were calculated to reflect the company's 1-for-20 reverse stock split, which became effective on July 14, 2025.

Net cash burn for the quarter was $4.7 million, which is a 66% reduction versus a year ago. We believe our overall cash burn will continue to reduce as revenue grows and will only get better until we get approval and start building inventory in preparation for the launch of Gen II. As of September 30, 2025, we reported cash, cash equivalents and marketable securities of $10.7 million.

As Steve mentioned earlier, subsequent to the end of the second quarter, we announced closing a strategic financial agreement with Streeterville Capital, LLC. Under the terms of the agreement, we issued $12 million promissory note bearing a 15% annual interest rate. This note matures in 24 months from the issue date with no payments due for the first 12 months. In addition, we entered into a $20 million equity line of credit agreement with Streeterville Capital dependent on our filing an S-1 resale registration covering resale of the shares Streeterville Capital may receive under the e-lock. This e-lock provides us with the right but not the obligation to sell up to $20 million of newly issued shares of our common stock over a 24-month period, subject to certain limitations.

Following these recent financing agreements, we believe that our cash and existing financial vehicles will be sufficient to allow us to support our current operating plans well into calendar 2027 and potentially to profitability, providing we continue to hit our current revenue estimates continue to control costs at Beyond Air.

With that, I'll hand the call back to Steve.

Thanks, Doug. Operator, we'll take questions.

[Operator Instructions] The first question is from Justin Walsh from Jones Trading.

Without going into specific fiscal 2027 guidance, can you comment on the expected growth drivers leading into the potential approval of the second-generation LungFit PH? And then how you're thinking about that trajectory after that second gen product is out?

Thanks, Justin. Appreciate that. So obviously, the trajectory once the second generation is out should be significantly steeper than what we're seeing now. That's our belief. And I think people know the attributes of that system versus the current system and the competition. So we're confident in that. As for the growth drivers prior to that, I assume you're asking for.

Yes.

Yes. We're setting up internationally. We're in 35 countries now with partners. We did just place systems in our first commercial hospital outside the United States. So it takes time to build that. We all wish we'd go a little faster, but it is being built, and our international team is doing a great job. So we've got a lot of seeds planted out there, I guess, you could say. And we anticipate that with fiscal '27 coming up, we should be winning a lot of hospitals outside the United States where the competition is a little bit different than it is in the United States. So that's one of the drivers for '27.

The other thing inside the United States, we did introduce a capital purchase model. Our system is now -- and to a point where it's extremely reliable, we've had interest, and we've actually had our first hospital purchase from us. So that will be a capital equipment purchase. And then the filter and the other accessories would be the ongoing purchase. And those prices, I guess it depends on how much nitric oxide use in your hospital per year per system, but this is certainly very competitive from a per hour cost basis for nitric oxide. So I think this new offering in terms of how hospitals can pay in the United States, we've gotten some interest there and the ex U.S. will be the driver prior to Gen II being approved.

Got it. And one more question. You mentioned here that you're hoping to commercialize the second-gen LungFit PH around end of calendar 2026, if I heard correctly. I'm just wondering if you can comment on kind of the thinking around this time and whether or not you've noticed any delays in your dealings with the FDA recently.

Yes, I think FDA is doing a great job. I don't think the timing that we're providing is FDA being a limiting factor. It's more supply chain on our side. I think the environment is difficult to get the parts that we need, certainly doesn't help with all the disagreements, I would say that are happening around the world with trade, government shutdown doesn't help either. So I think just getting things in place for our ability to get our contract manufacturing in shape for inspection is what we're doing. So it's just a matter of time before that occurs. And I did mention -- I mean you did mention we'd be launching before the end of the year. I think approval has to be a little bit earlier than December, obviously, for us to be able to launch by then. We're not going to launch the next day. It's going to take a little bit of time. So -- that's kind of where we are right now, things can change, things can be better or worse in terms of timing. But as we sit here today, that's the feeling that we have.

The next question is from I-Eh Jen from Laidlaw & Company.

Steve, could you just do some comparison between the new model versus the prior ones? So give us a little bit more deep dive in terms of the benefits to the company or maybe for the market penetration? Then I have a follow-up.

Yes. Thanks, I-Eh. I mean the biggest difference -- will, there's a few, but the biggest differences are the size. So this second generation machine will be about 60% the size of the original. It will be what we've applied for. And I believe -- we believe that upon approval, with approval from FDA, it would be approved for use in ground and air transportation. That's critical. I think that's probably the biggest difference maker for us. And the user interface has been upgraded based on feedback from our current customers and some future customers, I guess, who weren't using our Gen I system, but did give us advice on Gen II. So we listen to them and we built this device based on their input. So we think that all of the functions of the device will be a little bit easier and a little bit better for the user.

One other thing that we have is that the maintenance interval will be longer, so that the disruption of swapping machines out for those high-volume users will be a thing of the past, let's say. So when you have hospitals that are using an exceptional amount of hours per system per year, let's say, way above what the average is, we're bringing them in for maintenance fairly regularly. So -- that's a little bit of a disruption of the hospital, and we're working to get Gen II out there. So that disappears.

So actually, I try to get - I'm sorry, try to get a little bit about the new business -- new business model can achieve that wasn't really fully appreciated -- can be appreciated by the existing one?

You mean Gen II versus Gen I, I-Eh?

So -- I mean you mentioned that the new business model, which is to purchase -- machine. So I just want to get a sense of what does that -- what the benefits of that versus the business operation you have done before this and what some additional benefits you can generate from that?

Yes. So look, the market was set up as essentially a leasing market before we enter the market. So we're -- we came in and we worked with hospitals based on what they were used to, and we get requests from hospitals, can we purchase the machine, can we purchase the machine. And we weren't doing a purchase of the machine in the first 2 years because we were still making upgrades and tweaking the machine and it would have been difficult to sell something where you were still upgrading it and improving it. We're at the point now where there really aren't any more improvements to the Gen I machine a little tweak here or there is standard, maybe a software update or something. Those things are not major changes. So for hospitals that have been asking us if we take a purchase again, I don't know on their side, they prefer to purchase and to buy the disposables at a much lower rate than the leasing model would have. Again, that's just their preference. So we are offering different models for using our system to the hospitals based on their needs. That's all it is, yes. We're not abandoning the leasing model in any way. So we have multiple different types of leases. So we're really just trying to offer the hospitals what they're asking for. So the latest one is the capital purchase model. So we introduced it a few months ago, and we've got hospitals that are taking advantage of it.

Okay. Great. Maybe just a follow-up on the question. Next question is that you've got a lot of international deals signed, which is a great thing to happen. And because of the massive market over there, I assume most of these are distributor -- distributors. So how should we think about modeling over the long term in terms of what sort of pricing that may generate versus the one in the United States, which is slightly different? And how was the filter -- renewing filter fit into that model as well?

Yes. I mean the ex U.S. model for us, where we're selling things to the distributors and then they're using it in whatever model they like in their markets, whether it be a leasing model or a capital equipment purchase model or something else or some combination of that, that's their business. So for us, though, they're purchasing the machines like a capital equipment purchase. And then we're also selling them the disposables, including the filter, which is obviously the most important disposable. So -- that's how you should think about it in terms of modeling. It's more of a -- just a repetitive revenue line, and I think that, that's probably going to happen more in fiscal '27 than now because we're just getting the systems out there. Once they're placed in hospitals, you see that repeat business, but that's not happening in fiscal '26. It will be a fiscal '27 phenomenon and picking up speed more in fiscal '28 because we're still awaiting regulatory approvals in many countries, and it takes time to get into these hospitals. So it is a long process, but that's the way it goes.

Okay. Great. That's very helpful. And congrats on the fortify the balance sheet, which you can do a lot of good things. And congrats.

The next question is from Marie Thibault from BTIG.

This is Sam on for Marie. Maybe I can start on the updated guide, the $8 million to $10 million. Steve, would just love your thoughts on the visibility. You have given maybe some of the fluctuations in the hospital sales cycle? And then any thoughts on cadence for the back half of the year?

Thanks, Sam. Appreciate it. Well, look, we've got $3.6 million in the first half. So it's not a large leap to get to the 8% plus range. But we have a transition at Chief Commercial Officer. So I'm sure everyone on the call wouldn't expect Bob Goodman to hit the ground running on in week 1 or 2 and start ripping sales straight up. I think it will take a little bit of time for Bob to implement his processes here and get things moving in the right direction. So I think that when there's a change like this, there's going to be a little bit of disruption. So that's part of the reason why the $8 million to $10 million is the new guidance.

Okay. Okay. That's helpful. And then maybe I can just follow up here on the pace of contract renewals that are coming up. Are you seeing pretty strong renewal rates? Are customers exiting contracts at all would just love an update there as well?

Yes, the renewals are going well. We've had a bunch of renewals go from 1 year, they renewed for 3 years. We see that happening not with every contract, but a good number of them. And I think that getting on Premier is very helpful. We had a few hospitals that were premier hospitals that we had contracts with weren't yet on Premier, so now being on Premier solidifies that. That's very helpful. We look forward to hopefully getting on HealthTrust as well at some point, and that would give us the big 3 GPOs. That's very helpful for being able to not only get hospitals, but maintain them. Sometimes they can contract out of their -- outside of their GPO, which is rare. But when we do, when we get on the GPO, it's obviously important. So we haven't really seen hospitals leaving us. It's a very sticky business, I think. And I think it's due to the team in the field, the machine's performance, and my -- the clinical team here at Beyond Air do an excellent job of supporting the hospitals when they need support.

At this time, we are showing no further questions 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.

Thanks, operator. Thanks, everyone, for joining. Look forward to speaking to you in the near future. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Good afternoon, and welcome, everyone, to the Beyond Air Financial Results Call for the fiscal quarter ended June 30, 2025. [Operator Instructions] And now I would 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.

Now I will turn it over to our CFO, Doug Larson.

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.

[Operator Instructions] The first question comes from the line of 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?

Thanks, Marie. Look, we certainly need a little bit more throughout the next 7 months of the fiscal year. So yes, we don't have the range set by what was in our pocket today. That's by design, obviously. I mean, we have a lot of open opportunities that are in front of us that we expect to win a certain percentage of those and hit our numbers, and we feel very confident about that. So Premier is a big piece of that. I don't think that Premier coming on in July is going to have a major impact on this fiscal year. It does take time. It takes -- we've said in the past about 4 to 12 months from the first contact with the hospital.

And now with Premier, we're able to have these conversations with their members. Prior to this, we may have had conversations, but really, they were just introductory. There really weren't much serious discussions until we got on with Premier. So those discussions are happening now. So -- we think there could be some impact in this fiscal year. But obviously, it will be a much bigger impact next fiscal year. So what we have in hand is very strong, and we're very confident that we'll hit the range. But I think it's unfair to say that Doug and I are sitting here with 12% to 16% in our pocket if nothing else happened from today. That's just not the truth. I don't think it needs to be the truth, Marie. I mean we have a lot of time before the end of the fiscal year.

Sure, sure. Makes sense. Okay. But you feel good with being on track here. Okay. And then I guess I would ask a little bit about OUS. You called out some acceleration, I think, in the press release. And I know through your partners, you have exposure to several countries. Are there certain countries we should be listing for? Are there opportunities for big tenders here over the coming quarters? Just -- I want to get a little smarter on the OUS.

Yes. I think as you mentioned, the tenders, they do take a little bit of time. So signing up a distributor -- distribution partner in a country doesn't mean sales are coming in the next day, right? It does take some time. So the initial sales to our distribution partners are through demonstration devices and training devices that they have for themselves. And then a few quarters after that, you'll start to get some victories with hospitals, tenders, however they do in each country will be different.

So I think that we would anticipate some of these wins on hospitals coming towards the end of this fiscal year, getting hospitals signed up in the June quarter or getting partners, excuse me, signed up in the June quarter would put us a couple of quarters later before we start winning hospitals. It does take time. We've got to get devices shipped. We've got to get everybody trained. We've got to get marketing materials in their hands. So it does take a couple of quarters. So I think that we'll start to see the benefits of what we've put in place as we get towards the end of this fiscal year and into next fiscal year. But the revenues you're seeing now are from us selling to our partners what they need for training and demonstration purposes in their 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.

Secondly, if you could help us out on -- you mentioned that SG&A OpEx expenses are basically going to grow with revenue. Any sense how we should model that? Does that mean -- I mean, is that from a percentage basis, a quarterly basis? Or maybe just a little more detail on how we should be thinking about the progression for the rest of the year, assuming we're all going to be modeling kind of within the guidance range you provided?

Yes. I think like Doug mentioned, you'll see September tick down from the June quarter. Right now, the December quarter, it might be roughly around the September quarter for expenses, give or take. And as we start to see the growth, there might be -- for example, as we get higher sales, there are certain people and certain things we pay commission on. So you'll see expenses tick up and I don't think any of our cost cutting will offset that as we get towards the end of this fiscal year. So you will see some movement. That's why December is kind of shaky on whether it's going to be higher or right around September. But in the March quarter or last quarter of our fiscal year, you will see expenses moving up commensurate with the increase 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. I mean, I think just being on with Premier, it removes the big initial barrier. It's gone. So now we can have free discussions with them. And one of the nice things about the GPOs is you set your pricing in the contract with them. So you have something to work off of right away. So it does save a little bit of time. So yes, I mean, this is -- it's a big barrier removed. Without being on Premier, very extremely difficult 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. So yes, last -- when we reported our fiscal year earnings, I mean, there was like 10 days, 12 days left in the quarter. So it wasn't a stretch for us to preannounce that quarter. Now we're not even halfway through the quarter. So I'm not going to be commenting on quarterly estimates unless we're again at our fiscal year, which will be next June. So we reiterated our fiscal year guidance, and that should show our confidence.

Sure. I agree, and that looks good. And do you have any -- could you give some guidance in terms of how many hospitals at this time 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?

So in the outlook, we don't count on contracts being renewed above where they were before. We don't count on renegotiated contracts. It does happen. I would say that some of our renewals, the hospitals use more than they thought in their first year, and we will re-contract with them or renew them at higher rates, higher amounts of hours, so it is more money. So we don't have that in our forecast. We don't count on that. And Doug is looking at me, we definitely have a couple of our customers that are asking us to give them longer-term contracts because they're using too much and they want to make sure that they have certainty of payments, right? So they want to pay the same price every month and they get to month 8 or 9 and they've used up all the hours that they're supposed to have.

So we will work with them and try to come up a way to make it easier on them. But again, we're not -- we don't have penalties. We don't have extra costs at the end of a contract. They just kind of keep paying at this roughly the same hourly rate that they were paying out for their year. They just have to keep paying that rate if they're using more hours. And sometimes for hospitals, it's difficult because they want to just keep the same payment every month. So we do have this happen every month or 2, there's somebody asking us this question, and we work with them and we come up with ways to make it work for them and work for us. So yes, that can help us from a fiscal year standpoint, but it's not something that Doug and I have really dialed into the model because it's unpredictable. But we certainly have some hospitals that will help us on that front.

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.

Good afternoon, and welcome, everyone, to the Beyond Air Financial Results Call for the Fiscal Quarter and Year Ended March 31, 2025. [Operator Instructions] And now I would like to turn the call over to Corey Davis with 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 fourth quarter of fiscal year 2025 ended March 31, 2025. A copy of this press release can be found on our website, beyondair.net, under the News & Events section.

Before we begin, I'd 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 SEC, 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, June 17, 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. We are quite pleased with the progress we've made over the past year. For the fiscal year ended March 31, 2025, we reported a 220% increase in revenue to $3.7 million compared with $1.2 million for the same period last year. All of this growth came from U.S. sales, the majority coming from hospitals signed during the back half of the year. As a result, we have tremendous revenue growth built in to kick off fiscal year 2026, along with several new growth drivers as I will discuss in a moment.

With this in mind, we have decided to also announce that we are on track to report revenue of at least $1.7 million for the quarter ending in just 2 weeks on June 30, 2025, which translates to greater than a 45% sequential quarterly growth and greater than 145% year-over-year growth.

In addition, we are providing revenue guidance of $12 million to $16 million for the full fiscal year ending March 31, 2026. This level of projected growth moving forward shows how we are overcoming the barriers to entry in the nitric oxide market and are well on our way to making LungFit PH the market leader. The more customers use LungFit PH, the more confidence grows in the product and our ability to provide top-tier service. This is an exciting time for our team and our shareholders.

Let me now dig a little deeper into the numbers for the fiscal fourth quarter of 2025 and growth drivers for fiscal 2026. The commercial team's efforts have led to a steady flow of new hospital contracts throughout fiscal year 2025. During the fourth quarter, we saw 3 new hospital starts and 3 hospitals renew their contracts. As I've mentioned recently, we have established a solid customer base across key target regions in the U.S. We are pleased and thankful that many of these customers have made themselves available as references for LungFit PH over recent months, which has proven to be a valuable tool when establishing new accounts.

Further to the customer reference approach, we have partnered with Vanderbilt University Medical Center, naming them as the first luminary site for LungFit PH. Through this program, we will work alongside the Vanderbilt team to further optimize LungFit products and explore new opportunities to enhance hospital-based nitric oxide therapy. In addition, Vanderbilt has made themselves available to better showcase the full utility of LungFit PH technology to respiratory therapists, anesthesiologists, nurses, and other relevant clinicians at hospitals considering adopting our cylinder-free nitric oxide delivery system. This collaboration marks a major milestone in our core mission to redefine tankless nitric oxide delivery and drive continued innovation in respiratory care.

Now I would like to update you on the status of LungFit PH II, our next-generation system. As announced yesterday, we have submitted a PMA supplement to FDA. LungFit PH II is smaller, lighter and designed for air and ground transportation while still delivering all the revolutionary features of the current FDA-approved system. Additional improvements include a more intuitive user interface, more functional backup system, adjustable alarm volume and significantly less frequent maintenance. All of these improvements were made with extensive input from our customers. We anticipate that the anticipated 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.

Looking outside the U.S. Over the course of just the past 6 months, we have quickly ramped up our commercial program across Europe, Southeast Asia and the Middle East. These activities have included securing key regulatory approvals, including CE Mark, as well as signing distribution agreements across more than 2 dozen countries covering over 2 billion lives. Today, we announced that the team has recently signed several new international distribution partnerships for the following countries: India, Italy, Latvia, Lithuania, Estonia, Ukraine, Kuwait, Kazakhstan, Israel, and Poland.

As a reminder, because the LungFit system generates NO from room air unlike other systems that require NO-filled cylinders, we are opening an enormous new opportunity in geographical areas around the world where hospitals are unable to obtain nitric oxide supply or do not use nitric oxide due to the logistical difficulties associated with cumbersome cylinder-based systems. I am pleased to report that we have already shipped more than a dozen units of LungFit PH to customers outside the U.S. over the course of just the past few weeks. As a result, we plan to see a meaningful contribution from these activities reflected in our financial results starting in the back half of fiscal 2026 and beyond.

Turning to Beyond Cancer. As previously reported, they received regulatory approval in Israel to begin a Phase Ib trial for low-volume UNO or ultra-high concentration nitric oxide in combination with anti-PD-1 therapy in late-stage cancer patients who have failed anti-PD-1 therapy. This remains an area of high unmet patient need. Timing for the initiation of this study is under review.

On to NeuroNOS, our subsidiary focused on therapies for autism special disorders. We are pleased to announce recently that the U.S. FDA granted Orphan Drug Designation to our lead investigational therapy, BA-102, which is being developed for the treatment of Phelan-McDermid syndrome, a syndrome associated with autism spectrum disorder. As many of you are aware, this designation provides key development incentives, including 7 years of market exclusivity upon approval, tax credits for qualified clinical trials, waiver of FDA application fees and access to FDA protocol assistance.

NeuroNOS will meet with FDA later this year to get an idea of the path to human studies, which we expect to begin late in calendar 2026. The excitement around our autism program goes beyond our walls. This is evident by our ability to recruit leaders in the field to our Scientific Advisory Board. Just recently, we announced the appointment of Nobel Prize laureate, Professor Dan Shechtman to the NeuroNOS SAB. We believe bringing in Professor Shechtman to join Professor Roger Kornberg from Stanford University on this Board brings unparalleled scientific expertise to the NeuroNOS team.

During the March quarter, NeuroNOS published a peer-reviewed journal article in Translational Psychiatry, which presented breakthrough research by its Chief Scientific Officer, Professor Haitham Amal, which shows compelling evidence of a novel mechanism in the early stages of Alzheimer's disease. These new preclinical data further underscore the consistency and power of NeuroNOS' platform and offers new hope for the development of effective therapies for this devastating condition.

Building on the excitement around the data and progress of its programs, NeuroNOS announced at the end of March that it completed a $2 million equity financing from private investors as part of a larger funding round. This investment will accelerate the preclinical development of NeuroNOS' small molecule drug designed as an injectable or oral treatment for children with autism.

Turning to the corporate side. We're excited to announce today the appointment of Bob Goodman to our Board of Directors effective June 13, 2025. Bob is a seasoned health care executive and Board Director, who brings decades of commercial leadership experience from across the medical technology, pharmaceutical services and medical device industries. His career has included executive roles at BioTelemetry, Philips Healthcare, Cardiocore, Thermo Fisher and Pfizer. Our Board and management team look forward to working with Bob as we continue to build positive momentum across the commercial side of our business.

Before I conclude my comments today, I want to mention that our LungFit GO program is still moving along. We are dedicated to bringing this therapy to market to improve the lives of patients suffering with lung infections. We plan to meet with FDA prior to year-end to discuss the clinical path forward.

We continue to make significant progress in executing against the strategies for each of our businesses. Past year showed just a glimpse of how LungFit PH will transform the global NO landscape for the better and gives us a solid foundation from which to continue to build. Beyond Air team will continue to be diligent on its path to profitability and improving the lives of patients in need of the benefits of nitric oxide. Now I will turn it over to our CFO, Doug Larson.

Thanks, Steve, and good afternoon, everyone. Our financial results for the fourth quarter fiscal year 2025, which ended March 31, 2025, are as follows: revenue for the fiscal year ended March 31, 2025, increased 220% to $3.7 million compared with $1.2 million for the fiscal year ended March 31, 2024. We're showing $1.7 million loss in gross profit for the fiscal year 2025 compared to $1.3 million for fiscal year 2024. Cost of revenue of $5.4 million were recognized in the fiscal year compared to $2.5 million in the fiscal year ended March 31, 2024. Cost of revenue exceeded revenue, primarily driven by the depreciation of LungFit devices and onetime upgrade costs to systems.

Research and development expenses were $16.9 million for fiscal year 2025 compared with $24.4 million for fiscal year ended March 31, 2024. The decrease of $7.5 million was primarily attributed to a decrease in salaries, stock-based compensation and, to a lesser extent, from clinical and preclinical study expenses. SG&A expenses for the year ended March 31, 2025 and March 31, 2024, were $26 million and $37.3 million, respectively. The decrease of $11.3 million was attributed primarily to a reduction in salaries and stock-based compensation costs.

Other expense was $3.9 million compared to $1.3 million a year ago. The increase in other expense of $2.6 million was mainly due to a noncash loss recorded upon the retirement of Avenue Capital debt. Net loss attributed to common stockholders of Beyond Air, Inc. was $46.6 million or a loss of $0.69 per share, basic and diluted. Our net loss for the fiscal year ended March 31, 2024, was $60.2 million or a loss of $1.82 per share, basic and diluted. Net cash burn for the year was $44.1 million, which is more than 28% lower than previous year.

We've talked in previous quarters how we've been laser focused on fixed cost reduction, in R&D and in our supply chain. Now that we're wrapping up spend on development of our next-generation LungFit device, we'll see further reduction in our cash burn in Q1 and again in Q2.

I would like to take a moment and expand a bit on our cost reduction efforts. Over the past 6 quarters, we've reduced operating expenses from north of $17 million to just above $7 million in the current quarter. This translates to a 58% reduction. We believe the trough in our operating expenses will either be in the coming June quarter or the September quarter. Please do not interpret that expenses will be moving up significantly in the December quarter. Expenses will move up in proportion to our commercial performance to maintain our excellence in service and take advantage of coming opportunities.

As of March 31, 2025, the company had cash, cash equivalents and marketable securities of $6.9 million. Please note this does not include the $1 million payment we received from Getz Healthcare nor the additional $2 million investment into our existing synthetic royalty debt structure, both of which we received after March 31, 2025. We believe our cash, cash equivalents, marketable securities and existing financing vehicles will be sufficient to allow us to support our 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. Operator?

[Operator Instructions] Our first question is from Marie Thibault with BTIG.

Congrats on the progress here. Wanted to ask my first question here about LungFit 2.0 (sic) [ LungFit PH II ] Great to see that get in. Wanted to understand if that system approval is being assumed in the fiscal year '26 guide -- guidance range that you've given us, and how we should think about the selling dynamics ahead of that potential approval. Is that something where hospitals see that coming approval and say, "Hey, I want to get exposure to LungFit before that comes out?" Is it they wait a little bit as they're waiting for that next-gen system? Help us think about some of those dynamics.

Thanks, Marie. Fiscal '26 guidance does not include the second-generation system at all. And to answer your other question, we don't promote the Gen 2, obviously, until we get approval. So people know it exists, obviously, and they do inquire. But I think it's -- the focus is on Gen 1. That's what we're promoting now and that's what we're marketing and pushing. And yes, I mean, obviously, there are some hospitals that are interested in getting exposure to Gen 1 immediately. And then there are others who will choose to wait. So we've seen both at this point.

Okay. Very encouraging. Very helpful, Steve. Wanted to ask also about OUS. You've gotten several shipments out there, it sounds like, of units. What are we understanding about what some of those contracts look like? Is there any difference in how hospitals use this versus how they use it within U.S. hospitals? Any trends or specific countries we should be looking toward or any other catalysts OUS? Just want to get a little closer to that market.

Yes. I think it's a little early for us to see any trends in actual hospitals outside the U.S. Right now, our shipments are initial shipments to distributors, and they're taking those and using them for demonstration to get interest to have hospital placements. And there's much more of a tender process outside the United States than in the U.S., so it takes a little bit longer to get into the hospitals.

So I think the back half of this fiscal year, we'll see a big upswing on the international side as we get hospital placements and we'll get some trends at that point. But our initial work in the market outside the U.S. is showing consistency in terms of how they use nitric oxide. Outside the U.S., cardiac surgery is on label so they're definitely using it in that area. But again, it's similar to how it's used in the United States.

Okay. Very helpful update.

Our next question is from Jason Wittes with ROTH Capital.

Congrats on the progress here. On the PMA submission, do you have an expected time line for when we may see an approval for that for -- for LungFit PH II?

Jason, did you ask me when FDA is going to approve it?

I just -- do you have an estimate is what I'm asking. And I guess I'd add to that, how should we think about a potential launch? I think you had indicated earlier that it's kind of a staged launch versus an immediate bolus type hit. I'm just curious about the dynamics around what we might expect when the FDA approves this device.

Okay. So yes, I'm going to stay away from the exact timing on an FDA approval. I mean, everybody kind of knows what's going on at FDA right now. There's a little bit of an upheaval. So let's just kind of let things settle in. It will take a few months for us to interact with FDA and get a better understanding of their questions on our application. And perhaps I can give some more on time lines or better guidance on timing at that moment in time.

But as for the launch for Gen 2, obviously, we're going to prep for that as we work with FDA. There's always a period where you need to build up inventory and you need to scale up your manufacturing. So it will take a couple of months and then we will try to keep up with demand. That will probably be the challenge that we have post approval.

Okay. That's a totally appropriate answer, I get it. And then appreciate the guidance, which looks quite strong. We're at the low end. There's a big range there. I mean, what has to happen to get to the higher end of that range for the $12 million to $16 million that you're kind of hinting or pointing to for 2026?

Yes. It's not really that big of a range. I mean, a $4 million range. I guess it seems that way because it's a small $12 million to $16 million, it's not 100 to 104...

Percentage-wise, certainly, but dollars, right, go ahead.

But I mean, you can get a couple of contracts that are a good size, and it can move you a few million dollars. We can get some approvals -- regulatory approvals overseas for some big countries and get some big orders in. So it's not -- to us, it's not that big of a range because things can swing dramatically with some of the things that we have going on in the pipeline. So that's kind of how we view it.

We look at it as we feel pretty comfortable getting to the low end of that. There are a couple of things in the works that could get us into the mid and upper range of that. And if anything changes, we'll update you. I mean, I know the next call we have is in early August so there might not be any kind of change at that point. But certainly, by November, we'll have a good idea of how we're looking for getting into the range or perhaps maybe we get lucky. Maybe it will be at the high end or higher. We just don't know at this point. There's too many moving parts and it's only June. So it's exciting for us.

Got it. That's helpful. And then maybe just another clarification on -- did I hear correctly so basically on the expense line, there'll be further reductions until -- expected through September and then you basically grow with revenues on the expense line? Is that the right way to think about modeling the P&L?

Yes, exactly.

Okay. Congrats on the PMA submission.

Our next question is from Justin Walsh with JonesTrading.

Now you guys are supplying globally, I was wondering, I guess, the degree to which you're seeing impacts or worried about impacts from some of the emerging geopolitical questions. I mean, we have a moving target with U.S. tariffs, and you mentioned that you're supplying to Ukraine and, of course, you have ties in Israel. So just curious how all that is impacting things or not.

I don't think it's impacting us that much. I mean, we manufacture in the United States for LungFit, so the vast majority of our costs are in the U.S. We do source some parts from outside the U.S., but it's not a major impact if those tariffs and some of the big ones are going to stay in place. It's a low single-digit percentage impact on our cost of goods. So it's not a major impact on us.

And on the reverse side, we haven't really seen anything about where we're shipping to in terms of tax on the other end at this point. And as for Israel and Ukraine, I mean honestly, it wasn't -- Israel is great to be in. It's not a large country but it will impact our ex U.S. sales. We're very happy to be there. But I don't think it's a major driver like a France or a Turkey or Australia, India. These are much bigger countries where we are.

And to be honest, we were very surprised and happy that the distributor that we're working with in Eastern Europe had Ukraine on their list. So we're very excited to be able to help the distributor there going to Ukraine, but we didn't -- that we didn't have any expectations for. So that's just upside.

Great. And maybe just a follow-up on that. I'm curious if you're seeing more uptake in some of those geographies or where you think some of the markets might be a little bigger. I mean, obviously, you just mentioned a couple of them. But I'm wondering if you're, I don't know really, I think you'll take off in India or somewhere in particular.

Yes. I mean, it depends. Like they're all different in terms of regulatory timing. So India, we have a partner but there's a regulatory process to go through. So the impact from India on this fiscal year will be minimal. And some of the other countries where like Australia, Thailand, France, Romania, Turkey, these places, the regulatory process is already done or a very short time so we'll get some more impact from them.

But it's like I said earlier on an earlier question, it's a little too early because there are tender processes in a lot of these countries so it takes time to get in to some hospitals. So we're going to wait in the next 3, 4, 5 months to see how those go and how many we get and how quickly we get in. And every country is different so this is new for us as a company and new for this product, even our international team who has experience with this.

This is a new product, right? I mean, no one's ever seen a noncylinder-based nitric oxide system outside the United States before and certainly not 1 that makes it from ambient air. So this is kind of new for everybody. And we have some distributors are extremely excited, jumped at the opportunity and it was a very quick process to sign them up. And others are a little kind of more skeptical, I think, because they can't believe what the machine does.

So I think we're just in the early stages and it's exciting and we'll -- I'll probably have a better idea maybe on the next call or the call after that of where we're going to move quickly and which country is going to move fastest. But right now, it's just kind of feeling it out, and we're excited to have this many partners in this many countries open to us at this moment in time.

Our next question is from Yale Jen with Laidlaw & Company.

Congrats on the guidance as well as the performance. We just got about 3 here. The first 1 is that you suggested you will have more than $1.7 million for the next quarter or current ongoing quarter actually and $12 million to $16 million for the fiscal '26. So what are -- so what's the confidence you can provide that behind these forecasts or projections? And I have a follow-up.

Thanks, Yale. I mean, we're pretty confident. We wouldn't have put it out if we weren't. I think the fact that the June quarter ends in 2 weeks, we're pretty confident it will be $1.7 million. There could be something that happens in the next 2 weeks to pump it up a bit. We can't really predict that but we're highly confident in that number. And as for the fiscal year, we're pretty confident. I mean, we've got a lot in the hopper here especially on the international side.

Even in the U.S., there's movement in some areas that we're excited to see and maybe happening a little bit sooner than we thought. So I'll give you an example. We have -- we're very flexible with the customers in how they want to structure their contracts. It's very easy with our system to be as flexible as they would like us to be. But one of the things we started offering earlier this year is the razor-razorblade model so the purchase of our system and then the ongoing purchase of the consumables, which is mainly the filter.

And we've gotten some good feedback over the last month or 2 on that model. So we may actually see some hospitals jumping at the opportunity for that rather than the more traditional nitric oxide model, which is how many hours do you use x amount, this is what your annual cost could be divided by 12 and you get paid that per month. That's really the main way it's done, but we're offering this other way of doing it with the purchase model. And we may see some of that in this fiscal year and that's exciting. And that gives us some confidence in our numbers because it wasn't something we were seeing 6 to 9 months ago at all.

Okay, great. That's very helpful and comforting. And also in the press release, you mentioned you have about 45 hospitals in the United States now either installed or actually as well as using the LungFit systems. So going towards, let's say, end of this year, fiscal year or maybe or calendar year of this -- end of this year, do you anticipate -- what might be the estimate or projection of the number of hospitals that you may have, as well as maybe whether you would also see the volume increase per hospital?

I definitely see the volume increasing per hospital. We've been seeing that for the past 1.5 years. A lot of our hospitals are going over what their estimate was for the year. That's a good thing. We do offer a discounted hourly rate if they go over. So certainty of price is important for the customer. So I think that may continue. Hopefully, hospitals can get -- work with us and get a better handle on what they're going to use for the year so there's certainty in what they're spending.

I don't want to speculate on the total number of hospitals we're going to have at the end of the fiscal year. While it's important, not every hospital is created equal. So some hospitals are small in terms of their volume and some are very large in terms of their volume. So we could have 1 hospital be worth 10 in some cases. So obviously, 45 is a great number. I certainly see it being significantly more than that number at the end of the fiscal year. But I'm not going to take a guess and try to triangulate that exact number right now, Yale. But thank you.

Okay, great. And maybe just squeezing 1 more question. Actually it's a follow-up to the earlier 1 that for the PMA application. I know this is difficult to predict the time in possible approval. But just let's assume or maybe if in the "normal" circumstances, would this process maybe take about 12 months to 16 months or shorter? Just curious what would be the sort of reference point we can at least think about.

Yes. So there are statistics that FDA puts out about PMAs, and this is a PMA supplement. So FDA puts statistics out about how long these things take so you can see them online. I'd just caution you to take these averages because not every PMA is created equal. We are just a supplement. We basically make nitric oxide the same way with our second-generation system as our first-generation system.

A lot of the things that we do are equivalent. It's obviously smaller. It obviously has some enhanced features, and it obviously is built to be used for transport in ambulances and helicopters and airplanes. So there are some differences, but from how it operates, it's really not that much different. So could we be quicker than the average that FDA puts out? Probably. But again, if you look at FDA's guidelines, it's 180 days for a PMA supplement and they normally do not hit that 180 days.

And it's not that they can't hit their time lines. A lot of times, they have questions and that clock will stop while you're having discussions with FDA. So that's something that companies don't control. FDA does, and we're going to work with them to get this done as quickly as possible. But I just don't know what that time line will be at this point. We'll have a better handle once we start discussions with FDA in the next couple of months.

Great. That's a lot of great colors on the story. And again, congrats.

Our next question is from Jason Bednar with Piper Sandler.

This is Joe Downing on for Jason. Congrats on the PMA submission. Just wondering if there's any difference you can call out in the sales process with the 2.0 device versus the 1.0 device. And then just off of that, can you just remind us how much this LungFit 2.0 expands the market?

So Joe, thanks for the questions. I mean, we're not trying to sell this Gen 2 or market the Gen 2 right now, so we're not going to comment on how the process is different because we don't have a process yet. We have to wait for approval on that. But as for how it opens the market, I mean, it vastly expands this market. It opens it up for us as a company to every hospital in the world that wants to use nitric oxide.

We can get it anywhere. Our Gen 1 is already in remote locations treating patients, so the Gen 2, it will be even easier to do that. So this is something that will change the way people use nitric oxide in the hospital. I think that it will increase volumes overall and again reach hospitals that don't use nitric right now. So this is, for us, I think and for the industry, it's a game changer. It really is.

Great. And then just 1 last 1 on the competitive landscape. Your largest peer put out a new offering a number of months ago. Just wondering if you're seeing anything worth calling out with contract negotiations with hospitals as a result of that launch.

Which one are you talking about?

Mallinckrodt.

The Mallinckrodt offering?

Yes.

Yes, we haven't seen a change. I mean, the contracts are usually 1, 3 and 5 years in this market. We haven't really seen any change in that. So at least my team and I haven't really seen much change. Yes, they're out there with their new offering and they're marketing it, for sure. And I think the last time they spoke, they gave an idea of how many hospitals they were in or something or that they were in hospitals. So you can take a look at what their transcript said. So yes, it's another competitor. It's another cylinder-based system out there. That's the fourth cylinder-based system in the United States.

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

Just like to thank everybody for joining us today, and we'll talk to you in August. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.