All right. Good afternoon, everyone. Thank you for joining us here today. I'm here with Bob from Beyond Air. Thank you for taking the time. Why don't we just go ahead and start at a high level for investors who are newer to your story? Can you just explain what inhaled nitric oxide is, where it's used today, the problem that Beyond Air is trying to solve with LungFit?
All right, sure. Inhaled nitric oxide, it's a drug.
Okay
Within the market that it operates in our company, where we operate, it's in a hospital setting.
Okay? And the product is actually delivering inhaled nitric oxide, a drug, out of ambient air through our device. So a medical device creating a drug out of thin air, literally out of thin air. I'm sorry, what was that other question?
Where it's used today
Oh, where it's used.
Yeah.
Yeah. In the hospital system and predominantly in the neonatal ICU.
Okay.
Yeah.
Okay. If you could just pinpoint the problem that you guys are trying to solve with your product.
Yeah. Listen, the product itself, not our company, but the product itself has been out for decades.
Okay.
Inhaled nitric oxide in the setting that we're in. So we're not delivering anything that they're not used to seeing the delivery of inhaled nitric oxide. The problem we're solving is a logistical issue.
Okay
That respiratory therapists and neonatologists and nurses and value add teams, procurement, they've all complained about the logistics that are involved with the delivery of inhaled nitric oxide. And the issue, well, the additional issue to that was that they thought that they would be able to get a product that would immediately kind of turn the corner, and it was decades until we came along. And now that we're here, we're able to deliver that cleaner version for them where there's not a logistical issue.
Okay, so there was a big gap in the market.
Huge gap.
Okay. Yeah, so my understanding is that the inhaled nitric oxide market, it historically relied on these large cylinders of gas, whereas LungFit generates nitric oxide from the ambient air, which we just covered.
Yep.
Can you just walk us through why that is important and what changes operationally when a hospital moves from cylinder-based to LungFit?
Yeah, the cylinders are very bulky.
Okay.
You have to fill these cylinders
at a location offsite from the hospital.
Okay.
They need to be delivered to the hospital. There's the carbon footprint that's involved with that.
They need to be delivered through the hospital system to a storage location.
Okay.
They need to be monitored. Then they need to be taken from a storage unit to a patient care area.
Okay
That's an issue for the hospitals.
Yeah.
The hospitals don't like dealing with those logistics.
Their number one priority is patient care.
Yeah.
And not dealing with those logistics. So that's where we're solving that problem because we can take our device and put it in the room.
Yeah
You can turn it on, it turns on within a minute, and we're delivering service.
That's great.
Yeah.
Operationally putting a pinpoint on that, does it help with even headcount or freeing up provider capacity?
Oh, yeah. No, there's a lot of soft costs.
Okay.
Headcount-wise, across the continuum, there's a lot of savings there for the hospital.
Okay.
Yeah. No, there's a lot.
Okay. That's great. When you go and approach a prospect or a potential client, who are the primary customers, and then even more so importantly, who are the decision makers within a hospital?
They're all different.
Okay.
There are a lot of-
That sounds easy for you guys.
Yeah. No, it is actually reasonably easy because although they are a bit different, there is also a major similarity. The majority of the time, respiratory therapists are the ones that make the decisions for
Okay
inhaled nitric oxide. Okay? Sometimes it is the chief nursing officer
Okay
or maybe a world-renowned or a locally renowned neonatologist.
Okay.
But for all intents and purposes, it is usually the respiratory therapist. But again, in other certain hospital systems, it could be a value add person, somebody who might be from procurement, if it is a kind of a heavy
Yeah
bottom line kind of company or hospital. That is the differences that I mentioned at the beginning. But if we were to say, is there a consistency across the board with where the decision maker and main buyer is? Yeah, that would be the respiratory therapist.
Okay. How easy is it for you to identify who the decision maker is?
It is pretty easy.
Okay.
They are calling us.
Oh.
They want an option.
Smart
they want an option.
Yeah.
We are excited about that.
Optionality is a great thing to provide. Once you win an account, how sticky is that relationship?
Well, for us, it's very sticky. Our team's done a great job on the customer service end.
Yes.
We have a really good clinical team. We have a really good operations team and a supply chain team that gets everything where it needs to get at the right time to the right people.
Okay.
With all that, I could say I don't know what the metrics are for my competitors, but I do know that we are knocking incumbents out. That's a typical
way of getting business. There's very few nitric oxide naive accounts. Most of them have used nitric oxide in the past.
Yeah.
We get calls from the customers and we end up winning those accounts. Once we get in, our stickiness, we are averaging well over 90% staying in there.
Okay.
Yeah.
90% is amazing. Are your agreements typically multi-year or single year?
Both.
Okay.
There is a standard, if you will, it is either a one-year contract, usually if you are coming into an account, so you knock out an incumbent, you are providing service at hospital A. Sometimes it is a one-year contract because they kind of want to kind of
Test the waters.
to the water a little bit, and that's really what it is. Not to say that's all the time. There's a lot of contracts that we've won out of the gates 3 years.
That's great.
Because they really don't want to continue to do demos and evals.
Yeah
And every year they're just doing the revolving door of nitric oxide companies because somebody there didn't like the way the service was. So for us, it's a good situation where we know that, all right, if they can give us a year, we're fine because our renewal rate is.
Right
so high that, listen, we'd love to lock into three years automatically or out of the gates, but we know we're going to get year two and three.
Yeah.
Then we're going to renew for another three years.
Yeah, that's a great spot to be in.
Yeah. We're real strong there.
You have done that primarily through the broader LungFit system with Generation 1. I want to talk about Generation 2 for a bit because I think it is a really pivotal time for you guys and really exciting. You have been pretty clear that Generation 2 is the product that can really change the growth profile. What does Gen 2 do that Gen 1 cannot?
Well, so there are three or four differences, but the major, with a capital M, major difference is that the Gen 2 product is used to transport patients
Okay
outside of the hospital, from hospital to hospital, or from a helipad to a hospital.
Okay.
In an ambulance, in a fixed-wing aircraft, in a helicopter. These are different. It is an area that we have not been operating in.
Okay.
We've had a great run with a product that hasn't been able to deliver that, but we're operating in a much smaller market.
Okay.
Our revenues, it's low because as the company launched the first generation product, they thought there would be more dual sourcing. Essentially, that means is that our competitor would maybe be on the aircrafts, and we would get
Yeah
all the neonatal ICU.
Got it.
hospital business, and that's where all the usage is.
Okay.
But they learned a hard lesson, and that was that we should've went to market with a product that has the ability to be transported outside of the hospital.
Yeah.
What I will say about Generation 1, and I'll get back to a couple more benefits around Generation 2.
Yeah. Let's circle back.
But with Generation 1, it's a workhorse. It's a fantastic product, and I'll say definitively, it's the best in class in-hospital INO treatment, okay? Because again, it's not offering all those logistical issues or safety issues that our competitors have, and that's what the market asked for.
So that's what we've been able to deliver, so that's all Generation 1. The other part about Generation 2 is outside of the transport. Major difference is also with the maintenance intervals between when they swap out the device.
The first generation product, it's every 1,000 hours. That's about an average account is usually every 1,000 hours. That means once a year you're swapping that product. It comes back to our manufacturer. We go in there. It's like a car. You give the oil change, you take care of it, and you send back out another device to that customer, okay? Generation 2, it's every 4,000 hours.
So maybe once every four years?
Yeah, so major difference.
Huge difference.
Yeah.
Yeah. Okay. That's really exciting. You've previously said that Generation 2 expands the U.S. addressable market roughly four times to approximately $400 million, and it takes the global opportunity to $1 billion. Is that all untapping the transport market?
Yeah. The market that we're dealing with now, it's somewhere in the $50 million-$60 million range.
Okay.
Because we don't have the external transportability-
Yeah
we're not competing for those contracts. So getting from the $50 million to the $400 million and the $400 million to the billion-
Yeah
US-wise, we're able to now compete for those opportunities, those projects. We would get calls about them, big hospital systems would say, "There's another inhaled nitric oxide customer out there or provider. Why don't we talk to them?" Phone rings, and we find out they have a transport need, and we're like-
Yeah
Sorry, we're not able to offer that.
Okay.
Soon we will.
Which market is more crowded competitively? The transport market or non-transport?
It's the same. Right now, it's actually not an overly crowded market.
Okay
It's far from crowded. There's just a few companies that sell inhaled nitric oxide.
There's a 10,000-pound gorilla, and then there's another company, and it's us.
Okay.
Yeah.
Well, you guys are my favorite. Turning to the regulatory process, you submitted the Generation 2 PMA supplement in June of 2025, and then on the August call, you said that you continue to expect potential approval in the second half of this year. Can you just bring us up to date to the extent that you can on where things stand with the FDA today?
How did I know this question was going to come? Yeah. We're hitting all of our milestones.
Okay.
We're where we should be with the guidance that I've given, saying that we'll have the approval by the end of the year.
Okay.
There's certain things that are out of our hands. I don't like to say that out loud and brag about that, and I'm not saying it in a negative way, but we're dealing with the FDA. Once you bring in an external regulatory agency to evaluate your product, you're waiting for them to give the feedback that you're looking for, right?
Yeah.
The update, we've had great strides
Okay
in the last number of months, okay? First major one was that we submitted all the paperwork. When I say paperwork, I'm going to go in the over under of 10,000, it's over 10,000 pages.
Sounds awful.
All right? Of all kinds of scientific and manufacturing documentation, of every kind of verification and validation study, all the data that's needed with anything that the FDA would have a question about. We submitted all that paperwork.
Very thorough.
All that paperwork's been submitted.
Okay.
That's huge.
Yeah.
The other major milestone is with that, we then reached out to the FDA and said, "Hey, listen. We're ready to be audited in three locations.
Okay.
We're waiting for them to come audit us.
Yeah.
We're ready tomorrow or today. If they showed up today, these three locations are ready. The fourth location is probably the biggest gating factor for-
Okay
us to get our approval. Okay? When you take the product that we have, whether it's your pen or your cell phone, whatever it is, I think anybody can kind of design one of something.
Right? But in order to manufacture 10,000 pens-
A golf swing.
Yeah.
You can have one good shot.
Right. Exactly, yeah. You have to be able to reproduce and repeatability.
Okay? That whole repeatability piece is when you lean on, we do-
Okay
as a medical device company, we lean on a manufacturer that can take what we have with our brilliant, oh, by the way-
engineers, our operations team that is doing everything that they need to do in order to get this Generation 2 product approved through this supplement, the PMA supplement-
which is life-sustaining product. We are able to take all this paperwork and take everything now to the manufacturing level. With this manufacturing piece, it is a high-level assembly manufacturing.
Okay
audit. That is when you take, we are only going to do 20. That is what the FDA wants. They want to see 20 devices.
Okay.
But those 20 devices need to be manufactured through their process, not through our process. We have an R&D team that could do our own, but we just cannot do it at scale.
Yeah.
We want to be able to prove that we can do it at scale. That is what we are doing right now.
Okay.
We are right there. In fact, within our timeline, we are expecting to be able to pick up a phone and call the FDA
Okay
and say, "Come out and audit that location." Then once that happens,
Okay
the approval happens. We are talking weeks and under months, if you will, but we are not talking six months out. This is
Okay
this is very imminent, hence getting approved by the end of the year. Because then it is, I do not know, it could be five or six days after they come by and do the audit. They already gave us a clean bill of health on the first three, and then they give us a clean bill of health there. They already reviewed all the paperwork. They might call us and say, "Hey, it is Thanksgiving time.
Yeah.
There you go. Congratulations. Or it might be a Christmas present.
Yeah
Later on. But whenever we know, it's like, they-
Halloween, fingers crossed.
Yeah. But they'll, or Halloween. But they'll be pushing that end of it. They're in charge of that piece of it.
Okay.
We're hoping the earlier the better.
Okay.
We're doing everything that needs to be done.
Okay.
Yeah.
Would you consider the manufacturing a constraint, or is this trending in line with what you expected?
Oh, in line. Yeah.
Okay.
No, they're in line. They're really good.
Okay.
They're a real manufacturing company with exceptional engineers.
Okay.
They're a Six Sigma type operation. They have robots. They have all the right clean space. They have a billion engineers there.
meddling around with the devices. They know what they're doing, and they work with the top 10, not all of them, I'm sure, but I know they work with a number because I saw it up on the wall when I went to go visit them, is with many of the top 10 medical device companies.
Okay
yeah. They're a multi-billion dollar company.
Got it.
build yourself that way. Yeah, so yeah.
Yeah. Assuming approval comes in that 2H 2026 timeframe-
How quickly can you move from approval to having Generation 2 systems in the customers' hands?
I think you're going to like this answer, but immediately.
Okay.
Yeah. The good news is those 20 devices-
Yes
that I was talking about, those, they're called pilot devices as part of the Performance Qualification for the FDA, but they're also clinical grade devices. So those 20 devices could be deployed day one.
Okay.
During the period, we have a schedule of dozens of product over the next number of months, and then those dozens go into the 20s, 30s, 40s, and 50s.
Okay
of monthly production. We'll be ramped up to have, I don't want to say more than what we need, because I want to be able to use everything we have, but we're good there. Yeah.
Do you keep producing Generation 1 or manufacturing Generation 1 at that point?
Yeah.
Okay.
We'll keep Like I said, it's the, I consider, it's my opinion, but it's the best in-hospital product that's offering inhaled nitric oxide. What I will say is that it's a product that we want to continue the relationship with the other contract manufacturer that built that one.
Okay.
They're doing a great job. We're building out another few hundred devices there. We already have a number of devices to manage our pipeline that we have in front of us, because our pipeline's really growing.
Yeah.
We'll continue to build those, not for a long time. We'll be sunsetting the product.
Yeah.
It'll get us through, I think we'll be manufacturing through 2027-ish. Then we'll only be manufacturing Gen 2s.
Got it.
Yeah.
Okay. And I think just to help size the opportunity, if I am one large hospital, how many Gen 2s do I need? One?
There is no accurate answer to that.
Okay.
The average neonatal ICU
has two to four devices.
Okay.
Some, like call it a CHOP.
Okay
One of those big children's hospitals, they have probably dozens, right?
Okay.
But there's also the legacy competitors have done a really good job with a lot of these large hospital systems to just get the product in. There's also a lot more product that's being used as standard of care, but off-label. We're not out there actively promoting there.
Yeah.
We're only promoting in the neonatal ICU.
Got it.
But a lot of these hospitals still want to use it for other ways of doing vasodilation.
Got it. Okay. Kind of moving on to the financial aspect, looking at your guys' guidance, you've reiterated $8 million of calendar 2026 revenue, which does not assume any contribution from Generation 2, followed by $16 million to $18 million in 2027. Can you walk us through the major building blocks behind that doubling of revenue next year?
Yeah. The only way we double the revenue is getting Generation 2 approved. Everything's all about Generation 2, and we're that confident. That's why myself and Dan Moorhead, our CFO, we are rolling the sleeves up every night, and we're sitting across from each other, and we're mitigating risk, but we're also at the same time, we're trying to be aggressive.
Yeah
but we're also like, "What can we do differently?" My thought was like, "Let's give a forecast going out a couple of years.
Yeah.
Because we know that we're going to have this product approved.
Now, we don't know exactly when. Again, it's not a pharmaceutical, we have a PDUFA date.
Yeah.
But we know we're going to get approved, so we don't have any Generation 2 revenue into this year, to your point you just made earlier, but we also have very little at the front end because-
Yeah
It takes a little while to start getting. Not that it will take a while to win business. We will start winning business.
Right.
We have customers that are knocking at the door.
That is great.
It is a matter of taking those customers and converting them and then seeing the growth, and then it is annual occurring revenue.
Yeah.
So.
Do you feel like the incumbent seats that you would be overcoming, do a lot of those hospitals have multi-year contracts?
They do, but there's a few things. Remember, a multi-year contract could've started two and a half years ago.
Yeah.
If it's a one-year contract, it could've started 10 months ago, right?
Right.
That's something that's, is it in our calculus? Yes.
Okay.
What we do know, and this is a good part about the business, is major transparency with our customers.
Okay.
Whether they call us or we call them, we start talking about their need for inhaled nitric oxide, we are immediately asking questions like, "When is your contract expiring?
Okay.
They are very honest. It is not, "Oh, we can't share that." No, they want to share that.
They want the product.
Yeah. Because that way, it also helps us because there's a sales process, and the average time to close a deal is, whatever, four to six months.
It's only because of the timing of when that contract is.
Right.
We have to do a demo. We have to get the customer comfortable with the product.
Yeah.
They want to see the product, play around with it a little bit, then we do an evaluation. We're actually putting the product on patients.
Okay.
That's real stuff. That takes a little while to
Yeah
get the teams together and say, "Okay, we're going to put a couple of devices in here, and we're going to do that for a few weeks." It's because, again, it's a life-sustaining product.
You're dealing with babies.
Yeah.
Nobody's going willy-nilly there.
Yeah.
That's a. Yeah.
Okay, great answer. Outside the U.S., you now have commercial partnerships covering more than 40 countries. How should investors think about the international opportunity relative to the U.S.?
Slower than the U.S. as far as our ability to deliver. It'll just be a little bit slower,
Okay
but larger.
Okay.
It will eventually be foundational for us.
I would say for investors to realize that we are going to take our inventory of those Generation 1 devices, and basically, internationally, it is mostly, but not always, mostly a purchase model, so we are selling devices into that market. We will sell a bunch of our Gen 1s.
Okay.
We will sell those into it. Investors would see that we are going to. Then that is actually faster recognized revenue, which is a good thing.
Okay. Then just double-clicking on the slower aspect, just to better emphasize that for my understanding, is that because you do not have salespeople in Europe?
Yeah. We have sales support.
Okay.
We have distributors. We deal with a distributor model there.
Okay.
And we have senior sales leaders in the company who are managing. Now they're kind of really putting their hands around the business
rather than allowing the distributors to say, "Here's our pipeline, and these are the countries we're going into." That's how non-granular the distributors typically are, though. You'll have somebody that'll have Germany and Switzerland, and they'll say, "Yeah, we got 12 devices that we're going in Germany and 12 in Switzerland.
Yeah.
Our sales leadership is well trained to ask the right questions. Specifically, which hospitals?
Yeah.
Is it Zurich Children's?
Is it Zurich General?
Yeah.
How many devices in each account? To really pressure test what's going on. Europeans typically are slower to adopt to a newer product, so that's why we know.
Okay
that we want to be conscious of that in that market.
Okay.
There's also the regulatory piece.
Yeah.
We don't have regulatory clearance in all the countries yet.
Then there's one other part where there's certain countries have tenders and certain countries are national stock ordering type situations. We make sure that we're aware of that.
Okay. It sounds like you have a really great understanding of that market. Then you recently completed a financing round, providing $10 million upfront and potentially $20 million more through warrant exercises. How should the investor community think about the company's liquidity position and the capital required to execute the Generation 2 launch?
Well, that is going to get us through the Generation 2 launch-
Okay
completely.
The $10 million?
Yeah.
Okay.
Yeah, that will get us through there. Yeah.
Okay, great.
Yeah.
Then, switching to the longer term, is LungFit fundamentally a single product opportunity, or does the ability to generate nitric oxide from ambient air give you a broader platform that you can eventually address additional indications and settings, maybe kind of what you had mentioned earlier, in places where it is not standard of care today?
Yeah. I guess the only thing I would say is that we will market in the cardiac space internationally.
Okay
Okay, because it is approved internationally.
Got it.
It's not approved here in the U.S., so we'll only market where the governing agencies approve the indication, okay?
Okay.
That's the first part that we'll make sure that we're managing and sticking to.
That was an awfully long question. Anything else in there?
Eventually address additional indications and settings. I think you covered it.
Oh, yeah. All right, perfect. Okay. Additional indications. Yeah. The legacy team did a lot of great things with this product. However, from my perspective, they were a little bit too horizontal with the way they approached managing a small company.
Okay.
You have to get the product out.
Yeah.
You have to get the right product out. So that is what we are focused on, getting Generation 2 approved, okay?
Okay.
Going after our Beyond Cancer market and our
our NeuroNos business, our at home NTM business. Those are fantastic assets. They're great assets. We may revisit, maybe a corporate development play with another company to come in and partner with. We're focusing 100% right now on the core business that we've been talking about.
Okay, great.
Yeah.
I think I have time for two more questions here. You've said that the typical sales cycle can be anywhere around from four to nine months. Can it be shorter in certain circumstances, and is the biggest hurdle just the incumbents' contract cycle, or are there other pieces to that?
Yeah, the reason why it is such a long sales cycle is because we find out early
when the contract is, and usually it is not the news we want to hear. "Oh, it is January 1st, and they are not breaking that contract until October 1st," so that is a 10-month period.
Right. Yeah.
That becomes a 10-month process, right? But if they told us February
Yeah
we can put devices in their account in two months.
Okay
or in one month. I mean, that's not an issue.
Okay.
Yeah.
To close us out here, if we are sitting at Cantor's Conference a year from now, and you feel Beyond Air has had an exceptional 12 months, what would've happened between now and September 2027?
We would've gotten our FDA approval for our Generation 2 device.
A1 there. Yeah.
Yeah. That's the big one. That's really not just here for this conversation, but it's priority one through 10 for us in the company.
Okay
is getting that product approved, and then being able to deliver on it, and being able to get as many devices out the door. This is the operational piece that we're already well ahead of. We're doing a lot of long lead time parts that are part of the device. Remember, this is a pretty complicated device.
Yeah.
There's seven circuit boards in it. Because again, the competitors deliver inhaled nitric oxide out of the tank. We're creating it.
There's a lot of parts that are involved with it and to make sure that it's operating the way it needs to be operating. If all those things are going the way that we're expecting them to go, then our shareholders are going to be really happy.
Okay, great.
Yeah.
Thank you so much for joining us. Thanks everyone for listening. That will be a wrap. Thank you so much.
Awesome. Thanks, Katie.