Q3 2026 Beyond Air Inc Earnings Call

February 13, 2026

Operator 1: Good morning, and welcome everyone to Beyond Air Financial Results Call for the fiscal quarter ended 31 December 2025. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. And now I'd like to turn the call over to Corey Davis of LifeSci Advisors. Please go ahead.

Operator: Good morning, and welcome everyone to Beyond Air Financial Results Call for the Fiscal Quarter Ended 31 December 2025. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. And now I'd like to turn the call over to Corey Davis of LifeSci Advisors. Please go ahead.

Speaker #6: A question-and-answer session will follow the formal presentation. And now, I'd like to turn the call over to Corey Davis, Lifestyle Advisors. Please go ahead.

Speaker #2: 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.

Corey Davis: 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 Q3 of fiscal 2026, ended 31 December 2025. A copy of this press release can be found on our website, 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.

Speaker #2: A copy of this press release can be found on our website, 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.

Corey Davis: 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.

Speaker #2: 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

Corey Davis: 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, 13 February 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 turn the call over to Steve Lisi, Chief Executive Officer of Beyond Air. Steve, go ahead.

Speaker #1: Or events may 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.

Corey Davis: 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, 13 February 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 turn the call over to Steve Lisi, Chief Executive Officer of Beyond Air. Steve, go ahead.

Speaker #1: Beyond Air, Inc. net. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast.

Speaker #1: February 13th, 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 turn the call over to Steve Lisi.

Speaker #1: Chief Executive Officer of Beyond Air, Inc. Steven, go ahead.

Speaker #2: Thanks , Cory . Good morning to everyone With me here today is Dan Morehead , our new chief financial officer . It has been a pleasure working with Dan over the past several months .

Steve Lisi: Thanks, Corey, 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 he becomes fully integrated into the role. Also joining us today is Bob Goodman, 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.

Speaker #2: 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 he becomes fully integrated into the role. Also joining us today is Bob Goodman, our Chief Commercial Officer.

Steve Lisi: I also look forward to his active engagement with the investment community as he becomes fully integrated into the role. Also joining us today is Bob Goodman, 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.

Speaker #2: 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.

Speaker #2: We have achieved several significant milestones , strengthened our balance sheet to support continued commercial execution , and made the strategic decision to sell our subsidiary in exchange for equity in the acquiring company and up to $32.5 million in upfront development and commercial milestone payments .

Steve Lisi: We have achieved several significant milestones, strengthened our balance sheet to support continued commercial execution, and made a strategic decision to sell our Neurona subsidiary in exchange for equity in the acquiring company and up to $32.5 million in 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.

Speaker #2: 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, which increased 105% year over year to $2.2 million.

Speaker #2: This represents continued progress as we scale adoption and expand awareness of lung fit , in clinical settings . We now support more than 45 hospitals across the United States and internationally that have adopted our first generation lung fit system Customer feedback has been encouraging , with retention exceeding 90% and more than half of customers under multi-year agreements .

Steve Lisi: Customer feedback has been encouraging, with retention exceeding 90% and more than half of customers under multi-year 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 our LungFit 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 healthcare systems. Our current objective is to continue expanding Gen 1 system utilization through calendar 2026 in the US and internationally, while preparing for the potential launch of our second-generation system once approved.

Speaker #2: 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.

Speaker #2: Our commercial team continues to refine its targeting strategy , prioritizing hospitals most likely to adopt a lung fit 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 healthcare systems .

Speaker #2: Our current objective is to continue expanding Gen One system utilization through calendar 2026, in the US and internationally, while preparing for the potential launch of our second-generation system.

Speaker #2: Once approved . As previously discussed , Gen two system is designed to offer reduced size and weight , simplified operation , extended service intervals , improved backup system functionality , and very importantly , compatibility with both air and ground transport .

Steve Lisi: As previously discussed, Gen 2 system is designed to offer reduced size and weight, simplified operation, extended service intervals, improved backup system functionality, and very importantly, compatibility with both air and ground transport. 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 four months ago. Bob?

Speaker #2: We believe these enhancements will expand the addressable market relative to Gen One 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 four months ago.

Speaker #2: Bob

Speaker #3: Thanks , Steve . And let me begin by saying I share Steve's enthusiasm about the opportunities ahead for Beyond Air, Inc. . I as well believe that lung fit is the best in class .

Bob Goodman: Thanks, Steve, and let me begin by saying, I share Steve's enthusiasm about the opportunities ahead for Beyond Air. I as well believe that LungFit PH is the best-in-class nitric oxide solution globally. Feedback from US 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 TriLumed to support our engagements with the federal healthcare systems. I'm pleased to announce that together with this valued partner, we completed the first sale of LungFit PH to a VA medical center.

Speaker #3: Nitric oxide solution globally. Feedback from US 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.

Speaker #3: As awareness of lung fit , pH increases , we expect additional opportunities at the GPO and integrated Delivery network level in 2026 . As previously announced , we have been working with Trilaminar to support our engagements with the federal healthcare systems .

Speaker #3: I'm pleased to announce that, together with this valued partner, we completed the first sale of LungFit pH to a VA medical center.

Speaker #3: This initial commercial sale , the VA hospital system , establishes an important foothold opening potential pathways for future orders and broader adoption across the system , and provides access to the largest health network in the United States Internationally , we continue to see strong engagement from our distribution partners .

Bob Goodman: This initial commercial sale to the VA hospital system establishes an important foothold, opening potential pathways for future orders and broader adoption across the system, and provides access to the largest healthcare 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 LungFit PH and have already begun to see repeat orders for accessories from several countries.

Speaker #3: Over the past several months , we've expanded our global lung fit pH distribution network with new agreements in Canada , Germany , Brazil , Austria , the Netherlands , and Sri Lanka , bringing total international coverage to 40 countries .

Speaker #3: As we broaden our global footprint, we are laying the groundwork for long-term growth and positioning Beyond to serve a significantly larger addressable market.

Speaker #3: It is important to note that we are live in a few hospitals with Lung pH, and have already begun to see repeat orders for accessories from several countries.

Speaker #3: Taken together, these commercial, operational, and strategic developments give me confidence in the trajectory of the business. What also gives me confidence are the people at Beyond Air, Inc.?

Bob Goodman: Taken together, these commercial, operational, and strategic developments give me confidence in the trajectory of the business. What also gives me confidence are the people at Beyond Air. The dedication of this team is second to none, and I've been in this business for decades. This includes all the aspects of the team, from clinical support to 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 LungFit PH. I also want to emphasize the advantages, as Steve mentioned earlier, on our second-generation system. From my time spent with customers and potential customers in the United States, I believe that the Gen Two system addresses everything on the wish list from clinicians in hospitals.

Speaker #3: The dedication of this team is second to none , and I've been in this business for decades . This includes all the aspects of the team , from clinical support to marketing to customer service , to engineering , to finance , to regulatory , to quality , etc.

Speaker #3: Our people are fully engaged and dedicated to the vision of improving the lives of patients and medical staff with LungFit, pH.

Speaker #3: 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,

Speaker #3: I believe the Gen Two system addresses everything on the wish list from clinicians and hospitals. I'm extremely confident I, along with the team here, will execute on our vision of becoming the global nitric oxide leader.

Bob Goodman: 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.

Speaker #3: Now, I'll turn things back over to Steve.

Speaker #2: 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 17th to 22nd in San Diego , California .

Steve Lisi: 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 1 October 2025. We remain dedicated to pursuing the Phase 1B combination study with anti-PD-1 therapy, and we will communicate more details as we progress.

Speaker #2: As previously announced, the study enrolled ten subjects at doses of 25,050 parts per million of nitric oxide gas delivered over five minutes.

Speaker #2: 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 data is acceptable.

Speaker #2: The data presented at ASCO will include updated overall survival data, for which median survival has not yet been reached, as of October 1, 2025.

Speaker #2: We remain dedicated to pursuing the Phase 1b combination study with anti-PD-1 therapy, and we will communicate more details as we progress with respect to Neuronas.

Steve Lisi: With respect to NeuroNOS, our neurology-focused subsidiary, on 13 January 2026, XTL Biopharmaceuticals announced a binding letter of intent to acquire NeuroNOS 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, NeuroNOS is expected to serve as XTL's flagship platform for autism and neuro-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.

Speaker #2: Our neurology-focused subsidiary, on January 13, 2026, XTL Biopharmaceuticals, announced a binding letter of intent to acquire Neuronas in exchange for approximately 85% ownership interest. Consideration includes a 19.9% stake in XTL.

Speaker #2: $1 million in cash and milestone-based contingent payments totaling up to $31.5 million. Following closing, Neuronas is expected to serve as ZTE's flagship platform for autism and neuro-oncology development.

Speaker #2: We believe this agreement provides the potential to create meaningful value for our shareholders by enabling Neurona's pipeline to advance with dedicated focus and funding through XTL Bio.

Speaker #2: 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 .

Steve Lisi: 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 LungFit PH system. We remain focused on disciplined execution and delivering advanced nitric oxide solutions to clinicians and patients around the world. Now I will turn it over to our CFO, Dan Moorhead.

Speaker #2: Provide resources to support commercial execution and readiness for the second-generation Lung Fluid pH System. We remain focused on disciplined execution and delivering advanced nitric oxide solutions to clinicians and patients around the world. Now, I will turn it over to our CFO, Dan Morehead.

Speaker #4: Thanks , Steve , and good morning , everyone I'm excited to join my first call since being appointed CFO . About seven 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 .

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 Q3 of fiscal year 2026, which ended 31 December 2025, are as follows: Revenue for the fiscal quarter ended 31 December 2025 increased 105% to $2.2 million, compared with $1.1 million for the fiscal quarter ended 31 December 2024. On a sequential basis, this represents a 21% increase compared with last quarter.

Speaker #4: 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 31st , 2025 , are as follows .

Speaker #4: 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.

Speaker #4: 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 .

Dan Moorhead: Gross profit increased to $300,000 for fiscal Q3 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 two device, which are mostly behind us since the PMA was filed with the FDA. Total operating expenses for the fiscal Q3 of 2026 were reduced to approximately $6.9 million, which is down from $10.7 million for the same period last year.

Speaker #4: As well as the decrease in R&D costs related to our Gen2 device , which are mostly behind us . Since the PMA was filed with the FDA Total operating expenses for the fiscal third quarter of 2026 were reduced 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 two device .

Dan Moorhead: 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 Q3 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 headcount and related costs. SG&A expenses for the quarters 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.

Speaker #4: With the remaining reduction attributable to a decrease in headcount and related costs . SG&A expenses for the quarters ended December 31st , 2025 , and December 31st , 2024 were 4.5 million and $7.7 million , respectively .

Speaker #4: 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.

Dan Moorhead: 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 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 14 July 2025. Net cash burn for the quarter was $4.3 million, which is a reduction of over 40% versus a year ago.

Speaker #4: 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.

Speaker #4: Net loss attributed to common stockholders of Beyond Air, Inc. was $7.3 million, or a loss of $0.85 per share, basic and diluted, compared with $13 million, or a loss of $2.96 per share.

Speaker #4: Basic and diluted . Please note that the per share results for both periods were calculated to reflect the company's one for 20 reverse stock split , which became effective on July 14th , 2025 .

Speaker #4: 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 Two.

Dan Moorhead: 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 into calendar year 2027 and potentially 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 Steve.

Speaker #4: As of December 31st , 2025 , we reported cash , cash equivalents and 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 into calendar year 2027 and potentially 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 Steve

Speaker #2: Thanks, Dan. Operator, we'll take questions now.

Steve Lisi: Thanks, Dan. Operator, we'll take questions now.

Speaker #5: Thank you. At this time, if you would like to ask a question, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue.

Operator 1: Thank you. At this time, if you'd like to ask a question, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for our first question. Thank you. The first question comes from the line of Mike King with Rodman & Renshaw. Please proceed with your questions.

Operator: Thank you. At this time, if you'd like to ask a question, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for our first question. Thank you. The first question comes from the line of Mike King with Rodman & Renshaw. Please proceed with your questions.

Speaker #5: You may press star two . If you'd like to withdraw your question from the queue . For participants using speaker equipment , it may be necessary to pick up your handset before pressing the star key's one moment , please .

Speaker #5: Will we poll for our first question? Thank you. And the first question comes from the line of Mike King with Rodman & Renshaw.

Speaker #5: Please proceed with your questions

Mike King: Thanks for taking the question. Good morning, guys. 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 a great breakthrough that you, you know, you've got sales into the VA system, or VA 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, you know, see us knocking off, you know, more than one healthcare facility at a time?

Speaker #6: Thanks for taking the question. Good morning, guys. 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.

Speaker #6: I think it's a great breakthrough that you've got sales into the VA system—or VA Hospital, I should say. But it brings up the topic of the VA system.

Speaker #6: As you mentioned , how do you penetrate systems rather than single hospital at a time ? What needs to happen in terms of the sales process or the Or things like that , that can , you know , see us knocking off more than one healthcare facility at a time

Steve Lisi: Yeah, thanks for the question. Yeah, go ahead, Bob. You take this one.

Speaker #2: And I question . Yeah . Go ahead . Bob . You take this one . Oh , yeah .

Bob Goodman: Oh, yeah, sure. And then you can definitely provide any color you like, Steve. Thank you. Yeah. So, Mike, yeah, 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-

Speaker #3: Sure . And then then you can definitely provide any color you like . Steve . Thank you . Yeah . So , Mike .

Speaker #3: Yeah , the VA system , where we're on , as you know , and our product is being offered through the Icad system so that catalog actually makes it an easier approach for our customers to get to us directly .

Speaker #3: It's outside of an RFP process, but we're still able to—yeah, we're still able to actually compete with other RFPs that come out through.

Mike King: Oh, it is.

Bob Goodman: able to... Yeah, we're still able to actually compete with other RFPs that come up through. You know, there's a couple of different ways the VAs, you know, contract with vendors. But so, yeah, so we have access that way, so it's great.

Speaker #3: There's a couple of different ways that the VA's contract with with vendors . But so , so , yeah , so we yeah , so we have access that way .

Speaker #3: So it's great

Speaker #6: Okay . And in your formal comments , you mentioned words to the effect that you're identifying facilities . Most likely to acquire , the system .

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

Speaker #6: 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.

Speaker #3: Yeah . So so we've done a really good job standing up our commercial organization , both in the US and internationally . And right now , what we're doing is we're we're focusing and not to say an overhaul , but more of an exactness with our people and our process and our technology .

Bob Goodman: ... Yeah, so, so we, we've done a really good job standing up our commercial organization, both, in the US 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, our process, and our technology. So, you know, different prospecting tools with good intelligence and good CRM rigor to follow up with the customers and, taking the process of, you know, real good demand generation, where we're getting top of the funnel looks at our customers and on having really good pipeline discipline so we could get in front of the right customers and then have our people, the people part of it, you know, in the right places at the right time with the right coverage.

Speaker #3: So , you know , different prospecting tools with good intelligence and good CRM , rigor to follow up with the customers and taking the process of real good demand generation where we're getting top of the funnel funnel looks at our customers and having really good pipeline discipline so we could get in front of the right customers and then have our people , the people part of it , you know , in the right places at the right time , with the right coverage .

Speaker #3: So, we have that right. You know, reach and frequency—getting in front of these customers and just getting in front of more and more.

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

Speaker #3: So we have that that touch . So , so yeah , we've been we've been really refining that . And and the customers are really responding well for our ability to get in front of them .

Mike King: Well, that's great. Has there been any appreciable change in length of the sales cycle?

Speaker #6: And that's great. Has there been any appreciable change in the length of the sales cycle?

Speaker #3: Yeah , I mean , pretty much Mike still remains the same at the real front end . You know , if you get kind of real lucky based off of , you know , the timing of a contract , it might be expiring and , and that customer is really , really organized .

Bob Goodman: Yeah, I mean, that, that pretty much, Mike, still remains the same. At, at the real front end, you know, if you get kind of real lucky based off of, you know, the timing of a contract that might be expiring and, and that customer is really, really organized, and you can knock out a real quick demo and evaluation, you could do that in that 4- or 5-month timeframe. But it's really in that right around 6 to 9 months, and it could be longer. But, but what we're doing is a good job, you know, identifying, the customers and, and again, you know, 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.

Speaker #3: And you can knock out a real quick demo and evaluation. You can do that in that four- or five-month time frame.

Speaker #3: 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.

Speaker #3: You know , identifying the customers . And and again , you know , 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 .

Speaker #3: And with that , you know , we're hoping that that might , you know , restrict things just just a bit . But we're really organized in our in 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

Bob Goodman: With that, you know, we're hoping that might, you know, restrict things 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.

Speaker #6: Okay . And I apologize one more quick , one . How do you segment or can you segment the next gen system so that you know , if this is typical of a lot of businesses where a next generation chip , let's say , is coming out or , or something , and you know that the sales cycle kind of , you know , concertina effect where , you know , the purchaser may hold off until the the next gen system is , is available .

Mike King: Okay. And I apologize, one more quick one. How do you segment or can you segment the next-gen system so that, you know, it- this is typical of a lot of businesses where, you know, a next generation chip, let's say, is coming out or something and, you know, the sales cycle kind of accord- you know, concertina effect, where, you know, the purchaser may hold off until the next-gen system is available. Is that a concern, or are you, you know, segmenting a different market with the new system? Thank you.

Speaker #6: Is that a concern or are you segmenting a different market with the new system ? Thank you .

Speaker #3: Yeah . So we're we're focusing right now as you'd expect on our on our first generation product . And it's been really , really well received .

Bob Goodman: Yeah. So we're focusing right now, as you'd expect, on our first generation product, and it's been really, really well received, the version 24 of the gen one. So, and we're focusing on the non-transport systems, okay? And we're being really well received there as there's natural conversations within the market for the transportation systems. That's a later on gen two conversation, and we're really kind of breaking away from those conversations, but being aware that these are, you know, systems that are gonna, you know, wanna be working with us in the future.

Speaker #3: The version 24 of the of Gen one . So and we're focusing on the Non-transport systems okay . And the and we're and we're being really well received there as there's natural conversations within the market for the transportation systems .

Speaker #3: That's a later on Gen two conversation where really kind of breaking away from those conversations . But being aware that these are , you systems that are going to want to be working with us in the future

Speaker #6: Okay. All right. Thanks for indulging me, guys.

Mike King: Okay. All right. Thanks for indulging me, guys.

Bob Goodman: You got it.

Speaker #2: You got it. Thanks, Mike.

Steve Lisi: Thanks, Mike.

Speaker #5: The next question is from the line of Marie Thibault with BTIG. Please proceed with your question.

Operator 2: The next question is in the line of Marie Thibault with BTIG. Please just proceed with your question.

Operator: The next question is in the line of Marie Thibault with BTIG. Please just proceed with your question.

Speaker #7: Good morning . Thanks for taking the questions . And 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 two process ?

Marie Thibault: Good morning. Thanks for taking the questions, and welcome, Bob and Dan. Wanted to quickly just check in on anything, any communications you've been having with the FDA on the gen two process, to speak to your confidence in the timeline, 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 timeline we might think about before you can go into a formal launch and ramp?

Speaker #7: Can you speak to your confidence in the timeline? 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 timeline we might think about before you can go into a formal launch and ramp.

Speaker #2: Okay . Thanks , Marie . Well , I'll comment on the FDA side . So we've been having fairly constant communication with FDA , and we're very happy with the with the interaction .

Steve Lisi: Okay, thanks, Marie. Well, I'll comment on the FDA side. So we've been having fairly constant communication with FDA, and, you know, we're very happy with the interaction. You know, we don't really see any major hurdles. Everything the FDA has asked for we'll provide them. 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. You know, we still are waiting on the work to be completed with our contract manufacturer 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 timelines that we provided, given the state of affairs today.

Speaker #2: You know, we don't really see any major hurdles. Everything that FDA has asked for, we'll provide them—shouldn't be a problem.

Speaker #2: And I'm sure there'll be — the process will continue with FDA, and we will continue to answer the questions as we go forward. You know, we still are waiting on the work to be completed with our contract manufacturers so we can be inspected.

Speaker #2: And that's essentially in our minds , what the gating factor will be for a timing perspective . So we feel highly confident in the timelines we provided , given given the state of affairs today , I don't know if that gave you the answer you needed .

Steve Lisi: I don't know if I-

Marie Thibault: All right.

Steve Lisi: gave you the answer you needed.

Marie Thibault: No, that-

Speaker #2: If there are other things you want to ask, please feel free.

Steve Lisi: If there's other things you want to ask.

Speaker #7: Yeah , yeah , that's great to hear . Thank you for that , Steve . And then I guess I'll ask a quick follow up here on the international side .

Marie Thibault: Yeah, yeah. That's great to hear. Thank you for that, Steve. 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 catalysts to think about on the international side? And thanks for taking the questions.

Speaker #7: I know you've got some great partnerships and some efforts going on there. So, any wins or any catalysts to think about on the international side?

Speaker #7: And thanks for taking the questions.

Speaker #2: Sure, Bob, you want to take the international question.

Steve Lisi: Sure. Bob, you want to take the international question?

Speaker #3: Yeah , sure . So we have had some recent wins , which is great . And 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 can get in front of the systems .

Bob Goodman: Yeah, sure. So we have had some recent wins, which is great. I think as you know from 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 UK or Portugal, where there's, you know, a natural- you know, a national frame or, you know, you get that hunting license like Germany and APAC, where you can go direct. So with all those different regions, yeah, no, we've had wins. And on top of having wins, we're now actually seeing customers reorder filters.

Speaker #3: 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 UK or Portugal , where there's , you know , a natural , you know , a national frame or , you know , you get that hunting license like Germany and APAC , where you , you can go direct .

Speaker #3: So with all those different regions . Yeah . No , we've had , we've had wins . And on top of having wins , we're now actually seeing customers reorder filters .

Speaker #3: So , you know , the product is being deployed into hospitals now which is great . And and we're starting to again get that stickiness .

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

Speaker #3: So it's fantastic .

Speaker #7: All right. Thank you so much.

Marie Thibault: All right. Thank you so much.

Bob Goodman: Yeah.

Speaker #2: Thanks Marie .

Steve Lisi: Thanks, Marie.

Speaker #5: Our next question is from the line of Justin Walsh with Jones Trading. Pleased to see you with your questions.

Operator 2: Our next question is from the line of Justin Walsh with Jones Trading. Please proceed with your question.

Operator: Our next question is from the line of Justin Walsh with Jones Trading. Please proceed with your question.

Speaker #8: Hi . Thanks for taking the question . I'm wondering if you can provide any color on what attracted Xtl Biopharmaceuticals to be interested in the the nose opportunity and then how I guess collaboration or or working with them will look going forward .

Justin Walsh, PhD: Hi, thanks for taking the question. Wondering if you can provide any color on what attracted XTL Biopharmaceuticals to be interested in the NeuroNOS 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?

Justin Walsh: Hi, thanks for taking the question. Wondering if you can provide any color on what attracted XTL Biopharmaceuticals to be interested in the NeuroNOS 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?

Speaker #8: Given that you still have a stake in that company?

Steve Lisi: ... Oh, thanks for the question. So, yeah, Justin, look, you know, XTL was, you know, was, you know, a company looking for an asset, and there were multiple, choices for them. And I think what excited them about this opportunity is the science. I mean, there's been two, two papers, landmark papers, published about the work done by, Dr. Amal, who's the scientist, you know, and the innovator behind this, this approach to treating autism as, as well as, glioblastoma. Just want people to recognize that the, the functions of nitric oxide in the brain are, are numerous. So, I think that's what, what attracted them to this. There's a clear path to human studies.

Speaker #2: Well , thanks for the question . So yeah , Justin , look , you know , Xtl was , you know , it was , you know , a company looking for an asset .

Speaker #2: And there were multiple choices for them . And I think what excited them about this is the science . I mean , there's been two two papers , landmark papers published about the work done by Doctor Amal , who's a scientist .

Speaker #2: You know, and the innovator behind this, this approach to treating autism as well as glioblastoma. It's—we want people to recognize that the functions of nitric oxide in the brain are...

Speaker #2: Numerous . So I think that's what 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 neuroscience team has given that clarity to anybody who's taking a look under the hood .

Steve Lisi: I think a lot of the work that's been done by the NeuroNOS team has given that clarity to anybody who's taken a look under the hood. So I think it's just a matter of, you know, providing the FDA what they require, which is pretty straightforward. It's just a matter of getting that work done. So with XTL coming up with funding, they'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, you know, 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 them. We're going to get there and do that study and figure out if the efficacy translates.

Speaker #2: So I think it's just a matter of of , you know , providing the FDA what they require , which is pretty straightforward .

Speaker #2: It's just a matter of getting that work done. So with XTL coming up with funding, they'll be able to bring this into humans.

Speaker #2: So I think the attractiveness was great science , clear path to human trials . And as everyone on this call probably knows , you know , translating efficacy from from rodents to humans is something that's difficult to predict .

Speaker #2: But we'll find out . And I think that's what attracted them . We're going to get there and and do that study and figure out if the efficacy translates and if it does , you know , we're looking at a potential treatment for for autism and glioblastoma at this point .

Steve Lisi: And if it does, you know, we're looking at a potential treatment for autism and glioblastoma at this point. So it's very exciting. Just a little bit early for Beyond Air to, you know, to maintain and fund. So this is why the 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.

Speaker #2: So it's very exciting . Just a little bit early for Beyond Air, Inc. to , you know , to maintain and and and fund .

Speaker #2: So this is why the 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.

Speaker #2: 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.

Speaker #2: And on the efficacy side, we'll see what happens.

Speaker #8: Got it . Thanks .

Dan Moorhead: Got it. Thanks.

Speaker #9: Okay

Speaker #5: Next question is from the line of Jason Colbert with David Borrow Capital. Please proceed with your questions.

Operator 2: The next question is from the line of Jason Kolbert with Dawson James Capital. Please proceed with your questions.

Operator: The next question is from the line of Jason Kolbert with Dawson James Capital. Please proceed with your questions.

Jason Kolbert: Good morning, guys. Can we talk a little bit about COGS and how COGS performs in the quarter? Over the next couple of years, what do you think a sustainable COGS is?

Speaker #6: Good morning, guys. 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 a sustainable COGS is?

Jason Kolbert: Good morning, guys. Can we talk a little bit about COGS and how COGS performs in the quarter? Over the next couple of years, what do you think a sustainable COGS is?

Speaker #2: Dan , you want to take that one ?

Steve Lisi: Dan, you want to take that one?

Speaker #4: Sure .

Dan Moorhead: Sure. You know, we tend to see Gen 1, you know, again, we think we're in the... and Steve can help me on this. I'm still pretty new on it, but, you know, we expect COGS long term as we get to scale, you know, in the 60% range and, and moving up towards 70% with the Gen 2 product. But in the near term, again, with, with revenue levels growing, but growing at a more moderate pace until we hit the Gen 2 launch, again, I think you're gonna 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.

Speaker #10: You know, we tend to see Gen One, you know, again, we think we're in the— and Steve can help me on this.

Speaker #10: I'm still pretty new on it, but you know, we expect COGS long term as we get to scale, you know, in the 60% range and moving up towards 70% with the Gen Two product.

Speaker #10: But in the near term , again , with with revenue levels growing but growing at a more moderate pace until we hit the Gen two launch again , I think you're going to see it pretty close to that .

Speaker #10: 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.

Speaker #2: And just to follow .

Jason Kolbert: And-

Steve Lisi: Just to follow up on what Dan said, if you don't mind. You know, so yeah, I think Dan's right in what he says, but I would... You know, there are a couple of factors, and like Dan said, he's barely two months in. There are a couple of factors that we're still trying to figure out with respect to the margin on, and that would be from a pricing side of the market. So I think, you know, that goal of 70% with the Gen 2 is a great goal. That's the target. You know, if it's 65, it's 65, you know, 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.

Speaker #9: Up .

Speaker #2: Just follow up on that . If you don't mind . You know , I think I think Dan's right in what he says .

Speaker #2: But I would , you know , there are a couple of factors . Like Dan said , he's barely two months in . There are a couple of factors that we're still trying to figure out with respect to the to the margin .

Speaker #2: And that would be from a pricing side of the market. So, I think, you know, that goal of 70% with the Gen Two is a great goal.

Speaker #2: That's the target. You know, if it's 65 or 66, you know, that's not the end of the world for us.

Speaker #2: But I think that's our target, and I think we'd like to hit it. And, you know, the target with Gen One would be to get close to 60.

Steve Lisi: You know, target with Gen 1 would be to get close to 60, but again, I think a Gen 1 is more of a 50s type thing. But again, it's gonna depend on how the price shakes out in the market at the end of the day. You know, that remains to be seen.

Speaker #2: But again , I think Gen one is more of a 50s type thing . But again , it's going to depend on on how the price shakes out in the market .

Speaker #2: At the end of the day . And , you know , that remains to be seen . You have to you had a follow up , Jason .

Jason Kolbert: Okay.

Steve Lisi: You had a follow-up, Jason, go ahead.

Speaker #2: Go ahead .

Speaker #9: Yeah .

Speaker #6: Very helpful . Can you talk also about and how sensitive the sales cycle would be to increasing CA hiring additional sales people . You know , how does that impact kind of revenues ?

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

Speaker #6: What I'm trying to do is get a handle on, you know, more capital deployed in SGA. Does that translate into more revenues?

Speaker #2: Well , Jason , I mean , you know , you got

Steve Lisi: Well, Jason, I mean, you know, you guys-

Speaker #5: Thank you. The next question is from the line of Jason with Liddell. Please proceed with your question.

Operator 2: Thank you. The next question is from the line of Yao Chen with Leerink. Please proceed with your question.

Operator: Thank you. The next question is from the line of Yao Chen with Leerink. Please proceed with your question.

Speaker #8: Good morning .

Yao Chen: Good morning, and thanks for taking the questions. Just in the press release, you mentioned, you mentioned that for the Gen 2, they had the potential of extending the service intervals. Could you elaborate a little bit more on that specific aspect? Hello, can you hear me? Hello?

Yale Jen: Good morning, and thanks for taking the questions. Just in the press release, you mentioned, you mentioned that for the Gen 2, they had the potential of extending the service intervals. Could you elaborate a little bit more on that specific aspect? Hello, can you hear me? Hello?

Speaker #11: And thanks for taking the questions . Just in the press release , you mentioned , it mentioned that for the Gen two that has potential of extending the service intervals .

Speaker #11: Could you elaborate a little bit more on that specific aspect? Hello? Can you hear me?

Speaker #10: Hello

Speaker #5: Are you... Your line is live. If you have a question, please go ahead.

Operator 2: Hi, your line is live for a question. Please go ahead.

Operator: Hi, your line is live for a question. Please go ahead.

Steve Lisi: ... yes, I am.

Speaker #11: Yes, I am, thank you. Hello? Can you hear me?

Operator 1: Thank you.

Operator: Thank you.

Steve Lisi: Hello, can you hear me?

Speaker #5: Please stand by. Ladies and gentlemen, we are experiencing technical difficulties. Our call will resume momentarily. Thank you. Please remain on the line.

Operator 1: Please stand by, ladies and gentlemen. We're experiencing technical difficulties. Our conference will resume momentarily. Thank you. Please remain on the line. Our conference will resume momentarily. Please remain on line, ladies and gentlemen. Our call will resume momentarily. Thank you. Steve, you're now reconnected. Please continue. Caller, please go ahead with your question.

Operator: Please stand by, ladies and gentlemen. We're experiencing technical difficulties. Our conference will resume momentarily. Thank you. Please remain on the line. Our conference will resume momentarily. Please remain on line, ladies and gentlemen. Our call will resume momentarily. Thank you. Steve, you're now reconnected. Please continue. Caller, please go ahead with your question.

Speaker #5: Our conference will resume momentarily Please remain on line , ladies and gentlemen , our call will resume momentarily Thank you . Steve , you are now reconnected .

Speaker #5: Please continue . Caller , please go ahead with your question .

Speaker #11: Sure . Thanks Hey , Steve . Thanks for taking the questions . I believe in the press release . You mentioned that the second gen will have the potential of extending the make a longer service intervals .

Yao Chen: Sure. Thanks. Hey, hey, Steve, thanks for taking the questions. I believe in the press release you mentioned that the second gen will have the potential of extending the, make a longer service intervals. Could you elaborate a little bit more specifically on this particular aspect? And then I have a follow-up.

Yale Jen: Sure. Thanks. Hey, hey, Steve, thanks for taking the questions. I believe in the press release you mentioned that the second gen will have the potential of extending the, make a longer service intervals. Could you elaborate a little bit more specifically on this particular aspect? And then I have a follow-up.

Speaker #11: Could you elaborate a little bit more specifically on this particular aspect? And then I have a follow-up. Yes.

Steve Lisi: Yeah, thanks. Yeah, thanks, Yao. 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, you know, that can-- it could be a slight disruption for the hospital if they're using, you know, a couple thousand hours a year per machine. So we might be in there every six 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 one up and bring it in for service. So it's not very frequent, but, you know, it's something we'd like to improve upon.

Speaker #2: Yeah . Thanks , Yale . Appreciate that question . So the current the current system , the first generation system , every 1000 hours we need to bring it in for service so that that can be , you know , that can it could be a slight disruption for the hospital if they're using , you know , a couple thousand hours a year per machine .

Speaker #2: So we might be in there every six months rotating machines . So it's a smooth process , but it's an expensive process for us .

Speaker #2: Right. So we just come in, drop them a new machine, and pick that one up and bring it in for service.

Speaker #2: So it's not very frequent . But you know , it's it's something we'd like to improve upon . So with the second generation machine , you know , we think that service interval will be pushed out to at least 3000 hours before we need and potentially longer .

Steve Lisi: So with the second generation machine, you know, 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, you know, it's at least 3 times 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 swap out the machine.

Speaker #2: So testing is still going on. We haven't reached that, that juncture yet where the reliability testing that we're doing has stopped.

Speaker #2: So it's still ongoing . So we're past the 3000 hour mark at this point , which means , you know , it's at least three times longer before we have to go in .

Speaker #2: So if we were going in every out-of-hospital, let's say we're going in every 10 months now, we were going in every 30 months on average before we have to swap out the machines.

Speaker #2: So that'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.

Steve Lisi: 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.

Speaker #2: But from a gross margin perspective , I think that's the impact that you you , you heard about earlier on a question when Dan and I were responding to the gross margins between Gen one and Gen two .

Speaker #11: Okay , great . And maybe just a touch on that to this one a little bit , which is that would this be needed ?

Yao Chen: Okay, great. And maybe just attach on that to this one a little bit, which is that would this be needed? You mentioned you're still testing for maybe even longer, so, you know, interval for the service needed. Would that be required before you com, you know, submit or comp for the gen two review? Or that's something that could be w- the gen two review without the without having this particular aspect?

Yale Jen: Okay, great. And maybe just attach on that to this one a little bit, which is that would this be needed? You mentioned you're still testing for maybe even longer, so, you know, interval for the service needed. Would that be required before you com, you know, submit or comp for the gen two review? Or that's something that could be w- the gen two review without the without having this particular aspect?

Speaker #11: And you mentioned you're still testing for maybe even longer . You know , interval for the service needed . Would that be required before you , you know , submit or for the Gen two review or that's something that could be what the general review without without having this particular ?

Speaker #2: No , this is so so there is a reliability hurdle with with FDA . We've already passed that hurdle . So anything that we get is just more of you know , a guide for us for service with our customers .

Steve Lisi: 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, you know, 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.

Speaker #2: That's really what it is . So it's not a gating factor for FDA approval .

Speaker #11: Okay , great . Maybe just one 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 two , phase one B study potentially to start the later this calendar year ?

Yao Chen: Okay, great. Maybe it's one more question. So on the oncology side, since you guys already have a little bit more cash in hand, should we think about the phase 2, phase 1b study potentially to start later this calendar year? And thanks.

Yale Jen: Okay, great. Maybe it's one more question. So on the oncology side, since you guys already have a little bit more cash in hand, should we think about the phase 2, phase 1b study potentially to start later this calendar year? And thanks.

Speaker #11: And thanks

Speaker #2: Well , I , I don't know when it will start . Well we're certainly speaking with people and looking at that . So I don't want to commit to a timeline at this point .

Steve Lisi: Well, I don't know when it will start, Yao. We're certainly speaking with people and looking at that, so I don't want to commit to a timeline at this point. You know, 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 a study like that. Maybe once we are more comfortable with our path to profitability, that could be a different conversation that we have internally.

Speaker #2: You know while 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 .

Speaker #2: So it would probably not be something beyond air would , would commit to fully fund the study like that . Maybe , maybe once we are more comfortable with our path to profitability , that could be a different conversation that we have internally .

Speaker #11: Okay , great . That's very helpful . And congrats on the good quarter . In terms of the top line .

Yao Chen: Okay, great. That's very helpful. And then congrats on the good quarter in terms of the top line.

Yale Jen: Okay, great. That's very helpful. And then congrats on the good quarter in terms of the top line.

Speaker #2: Great . Thanks , Gail

Steve Lisi: Great. Thanks, Yao.

Speaker #5: Thank you . At this time we are showing no further questions in the queue . And this concludes our question and answer session .

Operator 1: 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.

Operator: 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.

Speaker #5: I would now like to turn the call back over to Steve Lacy for any closing remarks.

Speaker #2: Now, I would like to thank everybody for dialing in today. Bye-bye.

Steve Lisi: I'd like to thank everybody for dialing in today. Bye-bye.

Operator 1: Thanks, everyone, for their time today. You may now disconnect your lines at this time and have a wonderful day.

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

Q3 2026 Beyond Air Inc Earnings Call

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