Beyond Air, Inc. Price & Performance (XAIR)

At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. And now, I'd like to turn the call over to Cory Davis, LifeSci Advisors. Thank you. You may begin.

Thank you, Today, after the market closed, we issued a press release announcing the operational highlights and financial results for Beyond Air's ended Dec. 31, 2024 Beyond. A copy of this press release can be found on our website beyondair.net Beyond.

Under the News and Events section. Before we begin, I would like to remind everyone that we will be making comments and various remarks about future expectations, plans and prospects which constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Beyond Air cautions that these forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. We encourage everyone to review the company's filings with the Securities and Exchange Commission. Including, without limitation, the company's most recent Form 10 ks and Form 10 Q which identify specific factors that may cause actual results or events to differ materially from those in the forward looking statements.

Additionally, this conference call is being recorded will be available for audio rebroadcast on our website www.beyondair.net. Furthermore, the content of this conference call contains time sensitive information and is accurate only as of the date of this live broadcast, Feb. 10, 2025. Yandair undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

With that, let me turn the call over to Steve Lisey, Chairman and Chief Executive Officer of Beyond Air. Go ahead, Steve. Thanks, Corey. Good afternoon to everyone joining us. With me here today is Doug Larson, our Chief Financial Officer. Let's start today's call by stating how pleased we are with the sequential quarterly revenue growth we are seeing our commercial team continues to make significant progress. This has been driven by a steady stream of new hospital signings and going through the onboarding process to begin using our LungFit pH system in their institutions. During the quarter, we saw 6 new hospital starts and 2 hospitals renew their contracts. 1 of them for three years. It's only been about nine months since our upgraded LungFit PH began shipping and seven months since our new Chief Commercial Officer joined us. Has brought new energy to the entire Beyond Air team. We expect this momentum will continue and drive sequential quarterly revenue growth [indiscernible] A key factor of our ongoing success is that the Beyond Air team has done a tremendous job of strengthening each stage of the customer engagement process. To ensure we are offering the best possible experience for hospital administrators, nurses, physicians, staff, and of course respiratory therapists.

Most importantly, our existing customers are providing overwhelmingly positive feedback on the LungFit PH device which translates to great references for potential new engagements. Building on our robust customer engagement pipeline, we now have several partnerships in place supplementing our direct sales team. Including HealthcareLinks, a renowned healthcare advisory and contracting firm that works with GPOs and IDNs, and Trilimid, to help us engage with and distribute to the Military and Veterans Administration hospitals. Additionally, our marketing efforts have been upgraded significantly which has provided a meaningful boost to our sales efforts. In addition, our presence and activities at all respiratory conferences are much improved.

Which you can see if you take a look at all of our social media postings, Turning to the PMA supplement, for the LungFit pH label expansion to include cardiac surgery, the interactive discussion FDA continues. We will continue to provide FDA with the information that they request and provide updates to investors each quarter.

As a reminder, no nitric oxide products are currently approved for cardiac surgery in The United States. 1 last point about The U. S. Market. We expect our PMA supplement for our next generation lung fit pH transport capable system to be ready shortly, submission to FDA. Recall that in Nov. 0, we demonstrated this next generation system at the AARC Annual Meeting and the feedback was quite strong the most common question being, We will provide further details on this system on next quarter's earnings call.

Outside The U. S, we announced in Dec. 0 that LongFit PH received the long awaited CE Mark approval. This approval allows us to market LungFit PH in the European Union well as other countries that recognize this certification. The indications covered under CE Mark certification are treatment of infants with greater than 34 gestation with hypoxic respiratory failure and the treatment of peri and postoperative pulmonary hypertension adults and children in conjunction with heart surgery. Receiving CE Mark triggered a $1,000,000 milestone payment from Guess Healthcare our Asia Pacific distribution partner which we will receive the March, Along with royalty payments, we will receive based on Olympic PHS. GETS is already ahead of schedule securing market authorization in Australia less than two months after receiving CE Mark. To accelerate ex U. S. Sales, we have teamed up with business Asia consultants to provide LungFit PH To Hospitals Throughout Europe, South America, the Asia Pacific region and The Middle East. We've already seen progress with extremely high And in fact, we already have 2 new contracts signed in The Middle East. As a reminder, the fact that lung thick pH generates nitric oxide from room air opens up enormous opportunity in areas around the world where hospitals are are unable to obtain nitric oxide supply [indiscernible] do not use nitric oxide due to logistical difficulties associated with cumbersome solar based [indiscernible] Overall, believe that the updated lung fit pH on The U. S. Market since the is poised to start taking significant market share in The U. S. And global.

The inflection point is happening now in The U. S. Thanks to the system performance and our new and improved commercial infrastructure. Globally, we expect to see shipments starting in the next few months which will make an impact on our revenues in the back half of and beyond. We will be providing revenue guidance for on our year end conference call, which will be held in June 0.

Turning to Beyond Cancer, as peers reported, received regulatory approval to begin a Phase 1b trial for low volume ultra high concentration nitric oxide or UNO, in combination anti PD-one therapy in late stage cancer patients, who have failed anti PD-one therapy, which remains an area of high unmet patient need. Top line data from this Phase 1b study are anticipated around the the UNO dose will be twenty five thousand parts per million We call it low volume now because our original human study utilized 1 liter of gas While this Phase Ib study will utilize less than 100 milliliters of gas, a reduction of over 90%.

As everyone knows, the global anti PD-one therapy market is in the tens of billions of dollars. Encourage all of you to visit the Beyond Cancer website for more information we believe this year should be transformational for this potentially groundbreaking therapy for those suffering from solid tumors. I am also pleased with the advances that Neurinost a subsidiary focused on therapies for autism spectrum disorders, During the December, Niranass announced the appointment of Professor Roger Kornberg to its scientific advisory board. Doctor. Kornberg is a renowned leader in the field of eukaryotic gene transcription and was awarded the Nobel Prize in Chemistry in 02/6 for his groundbreaking work in molecular biology. Neurontinos will meet with FDA later this year to get an idea of the path to human studies. Which we expect to begin in The Neurinost website offers a more complete understanding of what is to come over the next few years, including in human data anticipated later in 2026. I hope you all see the great progress made recently and how these leading indicators paint a bright future for LungFit pH and for nitric oxide as a revolutionary therapy across multiple indications. Beyond our team will continue to be diligent on this path to profitability and improving the lives of patients in the need of the benefits, of nitric oxide.

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

Thanks, Steve, and good afternoon, everyone. Our financial results for the which ended Dec. 31, 2024, are as follows: Revenue for the were $110,000,0.0 as compared with $40,000,0.0 a year ago. [indiscernible] We're showing a $20,000,0.0 loss in gross profit the compared to a $40,000,0.0 loss for the same period last year. Cost of revenue in the current fiscal year exceeded revenue primarily due to $30,000,0.0 of 1 time costs required to upgrade our existing fleet of devices was $50,000,0.0 of non cash headwinds mainly the depreciation of devices [indiscernible] Research and development expenses were $3,000,000 as compared to $680,000,0.0 for the three months ended Dec. 31, 2020 The decrease of $380,000,0.0 was primarily attributed to a decrease in salaries and stock based compensation.

SG and A expenses for the three months ended Dec. 31, 2024 and Dec. 31, 2023 were $770,000,0.0 and $980,000,0.0 respectively. The decrease of $210,000,0.0 was attributed primarily to a decrease salaries Other expense was $240,000,0.0 compared to $30,000,0.0 in the previous year. The increase of $210,000,0.0 was mostly non cash attributed primarily to the extinguishment of the Avenue loan.

Net loss attributed to common stockholders of Beyond Air Inc. Was $13,000,000 or a loss of $0,.15 per share basic and diluted.

Our net loss for the three months ended Dec. 31, 2023 was $1,620,000,0.0 or a loss of $0.5 per share basic and diluted.

Net cash burn in the quarter was $760,000,0.0 which was more than 30% lower than the prior quarter ended Sept. 30, 2024. This decrease is mostly attributable to cost reductions implemented during the which included us closing 2 offices, 30% reduction in staff, putting our VCAP study on hold and adjusting our production forecasts. We anticipate cash burn to continue the trend lower in the March 0 but not to the same magnitude as we saw in this quarter. Due to the 1 time costs required to complete the submission of our next generation lung fit PH to FDA. As of Dec. 31, 2024, company had cash, cash equivalents and marketable securities of $1,090,000,0.0 We believe that our cash, cash equivalents and marketable securities will be sufficient to allow us to support our current operating plans through the provided we continue to hit our internal revenue estimates and control costs at Beyond Air. With that, I'll hand the call back to Steve. Thanks Doug.

We will now take questions. Great. Thank you. At this time, we will be conducting a question and answer session. First question is from Jason Witts from ROTH Partners.

Hi, thanks for taking the questions.

Looks like nice progression this quarter. In terms of the CE mark, how do What should we think about in terms of timing in terms of how that might start impacting revenues going forward? Is that an initial immediate hit or is that a delay to get installation in or how do we think about that? [indiscernible] Yes. Thanks, Jason.

It takes a little bit. So I wouldn't think we'd see much in this March 0 quarter that we're in. I would look more towards a small impact in the June and then picking up significantly in Sept. 0 and Dec. 0 and much more after that. So it take a little bit to get going, but we're going to be shipping in the first half of this calendar year for sure.

Okay. That's good to know. And then in terms of expenses, from what you said, it sounds like for for op expenses, specifically I guess, everything except the R and D, that should be coming down additionally this next quarter, right, I think you said there's an incrementally come down incrementally the next quarter, although it sounds like R and D is going out specifically because the PMA. Did I understand that correctly in terms of how the looks and kind of what the trend might be in all these expenses? [indiscernible] Exactly. I mean, the June will be a much steeper drop than the March will be.

Because we're getting this second generation 1 last question, I'll jump back in queue. In terms of the PMA submission, and this may be an easy answer, but a sense of how long you expect that may take to run through the process? Is that a I understand that it's always hard to get visibility on the FDA.

Especially now. I don't know how many people are going to be quitting the FDA or taking retirement or or what. We really just don't know.

I guess we'll have a better idea once we submit and as you know, there's usually FDA acknowledges that receipt and Beyond you out some questions and some thoughts and comments on your your submission. So I think we kind of need to wait for that to get an idea of where FDA stands and what kind of resources they have to devote to this application. I don't even know if they know what their staff will look like in the next sixty days. So I really don't have an answer for you, Jason. I wish I did, but I just don't I don't know how to handicap it at this moment. I think things are still in flux over there.

Got it. That's totally fair. I will jump back in queue. Thank you very much. Next question is from Mauricio Bolton from BTIG.

Please go ahead. Hey, good afternoon. This is Sam on for Marie. Appreciate taking the questions today. Maybe I could start here on the changes to the commercial organization. It's been about seven months since David joined. You have the new LungFit system and clearly things are progressing in the right direction. So I guess I'm wondering what's working well? What are some of the changes that you've made internally that driving some of this sequential strength here?

I think it's more of a cultural shift. I think David, who's our new Chief Commercial Officer, I don't want to call him new anymore. Is no longer new. But so I think David's driven a new culture here. I think the culture was not good. When we launched the product, I think it was for various reasons. And that culture needed to be changed. And I think David came in and and created a new culture here and It's just a more positive attitude and I think our customer service was always strong. I think it's gotten better. We have even new leadership on our customer service side. Very excited about the gentleman who's running that now. And that makes a lot of difference when you're taking care of your customers. Making sure that everything is running smoothly for them. And right now, the machine is performing beautifully.

And our customer service team actually has a lot more time in their hands to work with our customers and potential new customers because they're not trying to keep up with questions and issues that we had with the original version of the system, which was expected when the original version hit. It was absolutely expected Again, what wasn't expected is how long it take us to get all those upgrades through FDA, but now that they're through, it's running as we expected. So I think the most important thing is the culture shift and our ability to have superior customer service than to what 1 might [indiscernible] It makes a lot of sense. And maybe just following up on the transport PMA submission. Maybe I guess I'm wondering, how material could that be once you do get approval? How often is that coming up in your conversations with hospitals? And is that something where maybe the pipeline is already being built now? So that once you do get the approval, you have customers basically waiting, ready to sign up.

Yes. I got to be careful. How I answer this question for you? But yes, I think it comes up quite a bit about our next generation product. We showed it back in Nov. 0. People have seen it. People are excited about it. They want it. And I do think it's going to make all the difference It's not just transport capable, but there are other upgrades that have been made and it's a lot smaller. And lighter. [indiscernible] that will help a lot as well. So people definitely want it. And they're waiting for it. But I'm not going to go so far as to say we have a waiting list. I won't say that.

Okay.

Very good. And maybe I can just squeeze in 1 final 1 terms of annualized contract revenue. I think it was about $350,000,0.0 as of Oct. 0. Any update on that metric? Or is that something you're still providing Looking at Doug right now, was it that high? We probably aren't going to comment on that. I guess the comment will be that I guess The Street's around $4,000,000 for our fiscal year of $25 and I think that's certainly a good place to be.

As for what the run rate will be, I'll leave that to you. You saw what we put up this quarter. It's going to grow next quarter. Or the March 0 quarter will be higher than the Dec. 0 quarter for short.

So You can kind of guess what that runway will be Yes, makes sense. Thanks for taking the questions. Yes, thanks.

Next question is from Jason Bednar from Piper Hey, guys. Can Steve, I'll start with 1.

I'm not sure you're going to you'll be able to answer it or not, but I'll try. You say you're going to be reintroducing guidance, which is great to hear you got the visibility to do that. When we get to that next quarter. You also sprinkled in like, hey, double digits sequential growth quarter on quarter going forward for the foreseeable future. We can all see where the street's at. I guess just as you try to maybe prep the street investors, Do you like where the Street is currently sitting for We're all kind of already modeling pretty strong double digit sequential growth quarter on quarter throughout the year. So is it would you say it's too strong? Would you like things to be more conservative set? Any kind of thoughts or early thoughts there on the setup for the year?

Well, thanks for bringing a smile to my face, Jason.

We're definitely not going to comment. We'll give guidance in June 0.

For the fiscal year, And I am not going to give you any hints on what you should do with your numbers. You'll see what we report in June 0 and I'll give you that guidance. So in general, We as a company internally, we feel really good about what we're doing right now. We feel really good about the progress we've made and the momentum we have. So I'll leave it at that.

Okay.

As we get as we kind of get closer and approach at that point, do you think you'll be in a position to talk about the contribution you expect from U. S. Versus international partnerships? Or are you just thinking about hey, here's our total worldwide revenue guidance and we'll leave it at that. I think it's going to be total because I think it's too early for us to to gauge that ratio.

International could could move faster than we think. Could take a little longer than we think. We have lots of countries to go through The regulatory process outside of the European Union As you know, inside the European Union, quicker than others in terms of getting your product to the market. So those are some of the things that are out of our control. So we just don't know how quickly it will happen. And again, even in The U. S, things can be a little chunky in terms of timing of when contracts start. So To really nail down that ratio between the 2 I think that's going to be tough when we give guidance Maybe after a year of experience under our belt, we might be able to do a little bit better. But I think that's going to be tough. [indiscernible] total number will be we'll be able to give ourselves some room on our total number with guidance, so that If there's movement between those 2 up or down in terms of expectations, we'll we'll be perfectly fine to hit our our guidance that we're going to give. Okay.

As you get maybe a bit more rhythm in the business to and Beyond more experience now that you've been at the hospital contract in for a while.

Any seasonality that you're noticing on the contracting piece? When some of these contracts are coming up for bid, when hospitals are moving forward with decision making? Or is it are you not seeing any kind of notable seasonality to the business in the process?

I don't really think there's much seasonality to it. I don't really think there is. And again, it's depends on some hospitals are larger than others So you could get 2 or 3 hospitals in 1 quarter and have 1 big 1 and get 7 the next quarter and those 7 might not equal the big 1. So it just it's pretty chunky at this point and I think what we've seen is hospitals are starting every month of the year. We haven't really seen major time point. And a lot of them, they I don't want to give too much, but they don't have they can start some of the contracts they can start when they want, right? They don't have to wait till the end of the contract. Right? There are ways to move out of certain contracts. So if they want to move they just say, hey, we want to move and they just go. So it just depends on the type of contract that they have. So I think it's very variable.

I think it's when they make up their mind they want to move, they'll move.

Okay. That's all helpful. 1 last 1 to squeeze in. And sorry if I missed it. Did you I know you were there's a prior question around the PMA submission for the next gen device. I don't think you commented on the status of the the cardiac label expansion or indication in that in response to that question. Is there anything you can update on the status with the FDA questions you're receiving? Just how that's looking as you move forward in trying to secure that label?

Yes, it's kind of the same thing I said about the the PMA for the next gen system. I mean, We're certainly in contact with them about this. It's It's a little bit in flux at the moment. We're kind of just kind of waiting for things to settle down a little bit with FDA. And we'll keep working with them. But that's all I can say right now. I won't I'm not I don't really have much detail to give on this other than we're working with them we'll continue to do so and push forward with this. I mean, this is this is an indication that obviously is approved everywhere in the world, but The United States.

So I think for patients Patient safety, this is something that should be late. Absolutely.

So we'll keep working with the FDA get them what they need.

All right. Excellent. Thanks very much guys. Next question is from Justin Walsh from Jones Trading. Please go ahead. Hi. Thanks for taking the question. I'm wondering if you can remind us how you view the longer term relative importance of U. S. Versus ex U. S. Geographies for lung fit PH and maybe the expected impact in different geographies of the next generation product as that gets out there?

Yes.

I mean, you look out five years, so I think ex U. S. Would be much bigger than The U. S. Right now, it's not.

With our product the fact that we're making it from 1 example of that is the naval base in Guam I think we're the only ones that could Support them. It's that simple. [indiscernible] that will occur in our opinion all over the world where it's difficult to get nitric oxide. So That's going to take time. It's not going to happen overnight. It's not going to happen next year. But if you're looking out five years, I think ex U. S. Is going to be a lot bigger than The United States market.

In terms of money and So we're very excited about the ex U. S. Opportunity But again, that will take some time to roll out. So I don't see it impacting massively fiscal '26 or '27 in a meaningful way where it's larger than The U. S. Market. It will impact us in a meaningful way as a company, but it won't look bigger than The U. S. Market. I think that beyond that starting in with our which should be mostly calendar 2027, you'll start to see that trend moving. I think you'll start to realize, wow, volumes picking up Globally, this is going to be a much bigger product than anyone believes.

Got it. Thanks for taking the question. Next question comes from Yale Jen from LiDAR and Company.

Please go ahead. Good afternoon, Hamed. Thanks for taking the question. And Steve, you mentioned you've got new 6 new hospitals and 2 renews in The U. S. For this quarter is that right?

That's correct.

And last time you mentioned all of that you got a previous quarter you got 60% increase in terms of hot [indiscernible] Would you be able to give any colors of that front maybe 1 more question here is that quarter's contract, any actually being becoming paying customer of this quarter?

So I don't the numbers in front of me about the percentage increase like I did last quarter. My apologies. I can get that for you and get it to offline.

But I didn't catch I didn't catch the last part of your question about paying customers. I'm sorry. Was that?

I mean, last quarter, you have a certain number of contracts assigned. Some of the contract may not be paid immediately. In other words, buy purchase immediately. I'm just curious whether anything some of those contracts of this quarter already become purchased [indiscernible] you're right. Yes. So yes, we can sign a contract The majority of contracts when you sign them, the customer is starting like within thirty to forty five days with you. Some of them within fifteen days sometimes, but usually when they sign a contract, it's a start I would say within sixty days or less usually.

But every once in a while you have a hospital that assigned something three or six months in advance and say, hey, we're signing with you, start us in five months. So that does happen. So we did have a hospital 1 or 2, Doug, 2 hospitals.

In the March no, in the [indiscernible] No, no, they didn't start in Dec. 0.

Reading this quarter? Right.

We actually had 2 hospitals that were signed in the summer that are starting in the March. But Dec. 0 was all signed and started right in Dec. 0. In the December.

There were no longer term there were nobody signed into December and didn't start in the December. But we had people over the summer who started in the September and they're starting in the March.

That is true.

So in other words, the turnaround time becomes shortened and do you anticipate this sort of trend continues or this could be lumpy varying, depends on the contract. No, look, the 2 hospitals that signed six months in advance, that's rare. I mean, that's that's not normal. At least from what we've seen. Most of the hospitals are signing and starting up within thirty days, forty five days mostly. [indiscernible] I think that was just a little out of the ordinary. I'm not saying it's never going to happen, [indiscernible] [indiscernible] It's rare, at least from what we've seen so far.

Perhaps other companies in the space see it differently, but like I said, when a hospital wants to switch, they want to move, they move. And they're done.

So I think, yes, honestly, I think sometimes hospital wants to go with us and they don't realize can't get out of their contracts, so they just sign with us and wait I think that's what happened with these 2 hospitals. So Sometimes that happens. So I think it's more Okay, great. I appreciate the colors on that. Maybe 2 quick questions. First 1, in terms of balance sheet, as you look at the you are totally out of the long term debt. Is that correct? [indiscernible] Remember last quarter, we So we have 11 point dollars but the payments on that don't begin until So it gives us time before making payments on that.

So the interest is accruing and going on top of the principal until we start making payments and that's 8% royalty on net sales that pays that. So we don't have any scheduled payments. It's just at the end of the September quarter of twenty six, [indiscernible] We will make a payment thirty days later, no, but forty five days later.

Yes, thirty days later.

We make a payment. [indiscernible] we start making those payments based on our ability to pay based on net sales.

So that's the structure. That debt structure is very company friendly, obviously.

Absolutely. And maybe the last question here is that you have this trend for new next gen device. Let's just assume for any reason that you may have your both NICU and the cardiac PMA or supplement PMA approved. Would you file for the next gen for both indications, or you still start with the NICU I mean and maybe later for the [indiscernible] surgery once you have the So from 1. I don't I think this is a PMA supplement right?

So our next generation is a PMA supplement for our currently approved Lungford Peach So I think it would kind of just be automatic I don't really know my regulatory [indiscernible] mouth shut, but I think it's since it's a PMA settlement, our second generation for our first generation, we're just going to assume whatever level is for the first generation.

Right. Right. Right. The improved version of it I understand. Well, great. Thanks a lot. I appreciate the colors and congrats on the good quarter.

Great. Thanks, This concludes the question and answer session. I'd like to turn the floor back to management for any Thanks everybody for joining us. We are definitely looking forward to speaking with you in June 0 and providing guidance for you. Thank you.

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