Q4 2024 Beyond Air Inc Earnings Call

Operator: Good afternoon, and welcome everyone to the Beyond Air financial results call for the fiscal quarter ended March 31st, 2024. At this time, participants are in a listen-only mode. A question and answer session will follow the formal presentation. Now, I would like to turn the call over to Garth Russell, Lifesci Advisors. Please go ahead.

Good afternoon, and welcome everyone to the beyond Air financial results call for the fiscal quarter ended March 31, 'twenty 'twenty four.

Operator: Air Financial Results Call for the fiscal quarter ended March 31, 2024. At this time, participants are in a listen-only mode. A question and answer session will follow the formal presentation.

Speaker Change: At this time participants are in a listen only mode.

Speaker Change: A question and answer session will follow the formal presentation.

Garth Russell: And now I would like to turn the call over to Garth Russell, Life Side Visors. Please go ahead.

Speaker Change: And now I would like to turn the call over to Garth Russell lifestyle Advisors. Please go ahead.

Garth Russell: Thank you, operator. Good afternoon, everyone, and thank you for joining us today.

Garth Russell: Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, after the market closed, we issued a press release announcing the fiscal year 2024 operational highlights and financial results. A copy of this press release can be found on our website www.beyondair.net under the News and Events section.

Garth Russell: Thank you operator, good afternoon, everyone and thank you for joining us today. After the market closed we issued a press release announcing the fiscal year 'twenty 'twenty four operational highlights and financial results.

Garth Russell: After the market closed, we issued a press release announcing the fiscal year 2024 operational highlights and financial results. A copy of this press release can be found on our website, www.beyondair.net, under the News and Events section. Before we begin, I would like to remind everyone that we will be making comments and various remarks about future expectations, plans, and prospects, which constitute forward-looking statements for purposes of the Safe Harbor Provisions under the Private Securities Allegation Form Act of 1995.

A copy of this press release can be found on our website www dot beyond their dot net under the news and events section.

Garth Russell: ERA cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. We encourage everyone to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Form 10-K and Form 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described. Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website, www.beyondair.net.

Garth Russell: 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 the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. BeyondAir, caution that these forward-looking statements are subject to risk to uncertainties that could cause adverse results differently from those indicated. We encourage everyone to review the company's filings with the Securities Exchange Commission, including, without limitation, the company's most recent Form 10-K and Form 10-Q, which identifies specific factors that may cause adverse results or events differently from those described in forward-looking statements.

Speaker Change: 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.

Speaker Change: And there are cautioned 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.

Speaker Change: That may cause actual results or events to differ materially from those described in the forward looking statements. Additionally, This conference call is being recorded and will be available for audio rebroadcast on our website www dot beyond their dot net.

Garth Russell: Additionally, this conference call is being recorded. We will be available for audio-res broadcast on our website www.beyondair.net.

Garth Russell: Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, June 24th. BeyondAir undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call.

Garth Russell: Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, June 24, 2024. Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. I would also like to mention that, considering the corporate update being provided to you today, in a relatively short period of time until the company is going to announce its Q1 fiscal year 2025 financial results, management has decided to forgo hosting a stand-alone conference call next month.

Speaker Change: Furthermore, the content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast June 'twenty four 'twenty 'twenty four beyond air undertakes no obligation to revise or update any statements to reflect events or circumstances. After the date of this call.

Garth Russell: I would also like to mention considering the corporate update being provided to today and a relatively short period of time until the company is going to announce its Q1 Fiscal Year 2025 financial results. Management has decided to pre-go hosting a standalone conference call next month. The company's results will still be thoroughly communicated via press release and 10-Q filing with the SEC.

Speaker Change: I would also like to mention considering the corporate update being provided to you today in a relatively short period of time until the company is going to announce its Q1 fiscal year 2020 five financial results management has decided to forgo hosting a standalone conference call next month.

Results will still be thoroughly communicated via press release, and 10-Q filing with the SEC.

Steve Leasey: With that, I'll now turn to call with the SEC Chairman and Chief Executive Officer Beyondair. Thanks, Garth. Good afternoon to everyone joining us today. Joining me on the call is Doug Larson, Chief Financial Officer, who are both happy to be here today. I'm excited to report that we close that our fiscal year 2024 with positive momentum. As revenues for the fiscal fourth quarter grew more than 20% sequentially, and we reported several positive metrics across our growing lineup of existing customers and sales pipeline, which I would touch on in a moment.

Garth Russell: The company's results will still be thoroughly communicated via a press release and 10-Q filing with the SEC. With that, I'll now turn the call over to Steve Lisi, Chairman and Chief Executive Officer of Beyond Air.

Speaker Change: With that I'll now turn the call over to Steve Lisi, Chairman and Chief Executive Officer of beyond there Steve.

Steve Lisi: Thanks, Garth, and good afternoon to everyone joining us today. Joining me on the call is Doug Larson, Chief Financial Officer, and we're both happy to be here today. I'm excited to report that we closed out our fiscal year 2024 with positive momentum, as revenues for the fiscal fourth quarter grew more than 20% sequentially, and we reported several positive metrics across our growing lineup of existing customers and sales pipelines, which I will touch on in a moment. But first, I would like to offer a short review of the road we've taken to get to this point.

Steve Lisi: Thanks, Scott and good afternoon to everyone joining us today joining me on the call is Doug Larson, Chief Financial Officer, and we're both happy to be here today.

I'm excited to report that we closed out our fiscal year 'twenty 'twenty four with positive momentum as revenues for the fiscal fourth quarter grew more than 20% sequentially and we reported several positive metrics across our growing lineup of existing customers and sales pipeline.

Steve Lisi: Which I would touch on in a moment.

Steve Leasey: First, I would like to offer a short review of the road we've taken to get to this point. The long-slung 58 following FDA PMA approval in the fall of calendar year 2022. Immediately after FDA approval in mid-22, our engineers worked diligently to expand the device's compatibility with additional ventilators already installed in the market and made certain other improvements that addressed the feedback received from real-world use and customer input. In spring of 2023, we had received all we needed from the FDA to make our system what we believe is the best of the market, with two notable exceptions.

First I would like to offer a short review of the road, we've taken to get to this point the.

Steve Lisi: Launched LungFitPH following FDA PMA approval in the fall of calendar year 2022. Immediately after FDA approval in mid-22, our engineers worked diligently to expand the device's compatibility with additional ventilators already installed in the market and made certain other improvements that address the feedback received from real world use and customer input. In the spring of 2023, we had received all we needed from FDA to make our system what we believe is the best on the market with two notable exceptions, compatibility with an important ventilator and improved nitric oxide sensors.

Speaker Change: The launch lung fifth th following FDA PMA approval in the fall of calendar year 2022.

Speaker Change: Immediately after FDA approval in mid 'twenty, two our engineers worked diligently to expand the device compatibility with additional ventilator is already installed in the market.

Speaker Change: To meet certain other improvements that address the feedback received from real world use and customer input.

Speaker Change: In spring of 2023, we have received all we needed.

Speaker Change: From F D a to make our system. What we believe is the best on the market with two notable exceptions comparator.

Steve Leasey: Capatability with an important ventilator and improved natural dioxide sensors, both of which were tied through pending software approval. Then, in the fall of calendar 2023, which is a third quarter of our fiscal 2024, the FDA gave approval for this update. Thus, we are now in the market with a more optimized product. As you all know, with a PMA-approved class 3 medical device, the implementation of this software change required more than simply uploading files from a thumb drag. We spent several months ensuring perfection, working with our existing customers to be certainly updated. System worked perfectly. Once we had that performance indication, we upgraded the devices at all of our existing customer locations and brought on new customers as well.

Speaker Change: Compatibility with an important events later and improved naturally oxide sensors.

Steve Lisi: Both of which were tied to pending software approval. Then, in the fall of calendar 2023, which is the third quarter of our fiscal 2024, the FDA gave approval for this update. Thus, we are now in the market with a more optimized product. As you all know, with a PMA-approved Class 3 medical device, the implementation of this software change required more than simply uploading files from a thumb drive.

Speaker Change: Both of which were tied to a pending software approval.

Speaker Change: And then in the fall of calendar 2023, which is the third quarter of our fiscal 2024. The FDA gave approval for this update.

Speaker Change: Thus, we are now in the market with a more optimized product.

Speaker Change: As you all know with a PMA approved class III medical device. The implementation of this software change requires more than simply uploading files from some drag.

Steve Lisi: We spent several months ensuring perfection, working with our existing customers to be certain that the updated system worked perfectly. Once we had that performance indication, we upgraded the devices at all of our existing customer locations and brought on new customers as well. This took a little longer than expected, but we believe that the quality of the system we now have is paramount for medium and long-term success. Overall, we believe LungFit is well positioned for rapid gains, as we expect that it meets all the existing market needs. Now, let's talk about our confidence for the next several quarters and beyond.

Speaker Change: We spent several months ensuring protection working with our existing customers to be certainly updated system worked perfectly.

Speaker Change: Once we had that performance indication.

Speaker Change: Graded the devices at all of our existing customer locations and brought on new customers as well.

Steve Leasey: This took a little longer than expected, but we believe that the quality of the system we now have is paramount for medium and long-term success. Overall, we believe Lung Fit is well positioned for rapid gains, as we expect that it meets all of the existing market needs.

Speaker Change: This took a little longer than expected, but we believe that the quality of the system. We now have is paramount for medium and long term success.

Speaker Change: Overall, we believe lung fit is well positioned for rapid gains as we expect that it meets all of the existing market needs.

Steve Leasey: Now, let's talk about our confidence for the next several quarters and beyond. Over the past few months, since the updated lung fit paid system has been available, we have seen a steady flow of high-quality engagements with potential new customers and extremely positive feedback from existing customers. The level of important as word of mouth referrals and reference checks are sometimes the most effective form of marketing to hospitals. Momentum is building, and we are ready to seize the moment.

Speaker Change: Now, let's talk about our confidence for the next several quarters and beyond over the past few months since the updated lumpy Peach system has been available.

Steve Lisi: Over the past few months, since the updated LungFit PH system has been available, we have seen a steady flow of high-quality engagements with potential new customers and extremely positive feedback from existing customers. The level of satisfaction among our existing customers is important, as word-of-mouth referrals and reference checks are sometimes the most effective form of marketing to hospitals. Momentum is building, and we are ready to seize the moment. We are confident that our newly appointed chief commercial officer, David Webster, who begins on July 8th, will build upon this newly cemented foundation and on our success to date. Now, I will fill you in on some quick statistics.

Speaker Change: We have seen a steady flow of high quality engagements with potential new customers and extremely positive feedback from existing customers.

Speaker Change: The level of satisfaction among our existing customers is important as word of mouth referrals and reference checks are sometimes the most effective form of marketing to hospitals.

Speaker Change: Momentum is building and we are ready to seize the moment.

Steve Leasey: We are confident that our newly appointed Chief Commercial Officer, David Webster, who begins on July 8, will build upon this newly cemented foundation and on our success today. Now, I will fill you in on some quick statistics. More than 50 hospitals in the United States have used Lung Fit PH to treat patients. These hospitals collectively have now treated over 1,100 patients. This translates to over 75,000 hours of therapy with Lung Fit PH. Clearly, lung fit PH works in multiple settings while being used with various ventilators, and hospital staff are pleased with lung fits benefits. Also, it's worth noting that most of these hours were done with Lung Fit PH prior to the recent updates.

Speaker Change: We are confident that our newly appointed Chief Commercial Officer, David Webster, who begins on July eight we will build upon this newly Smithy Foundation and on our success to date.

Speaker Change: Now I will fill you in on some quick statistics.

Steve Lisi: More than 50 hospitals in the United States have used LungFitPH to treat patients, and these hospitals have collectively treated over 1,100 patients. This translates to over 75,000 hours of therapy with LungFitPH. Clearly, LungFitPH works in multiple settings while being used with various ventilators, and hospital staff are pleased with its benefits. Also, it's worth noting that most of these hours were done with LungFitPH prior to the recent updates.

Speaker Change: More than 50 hospitals in United States have used lumpy peach to treat patients.

David Webster: These hospitals collectively have now treated over 1100 patients.

This translates to over 75000 hours of therapy with long Beach.

David Webster: Clearly lung for ph works in multiple settings, while being used with various ventilators and hospital staff are pleased with lung fits benefits.

Speaker Change: So it's worth noting that most of these hours were done with lumpy ph prior to the recent updates so just imagine how much more satisfying it is for hospital staff to work with the upgraded system.

Steve Lisi: So just imagine how much more satisfying it is for hospital staff to work with the upgraded system. Perhaps most telling, continuing on a discussion of engagements from our last earnings call, every hospital that uses LungFitPH that had their contract terminated has renewed with us. And the number of multi-year contracts has increased by over 100% since our last conference call, with such requests becoming more frequent. We are proud of our continuing performance and the quality of LungFitPH.

Steve Leasey: So just imagine how much more satisfied it is for hospital staff to work with the upgraded system. Perhaps most telling, continuing on a discussion of engagements from our last earnings call, every hospital that uses Lung Fit PH that had their contract conclude has renewed with us. And the number of multi-year contracts has increased by over 100% since our last conference call, but such requests are becoming more frequent. We are proud of our continuing performance and the quality of Lung Fit PH and to be crystal clear to all of our potential customers. We welcome all head-to-head comparisons with any competitors and a device under any circumstances.

Speaker Change: Perhaps most telling continuing on a discussion of engagements from our last earnings call. Every hospital that uses lumpy ph that had their contracts include has renewed with us.

Speaker Change: And the number of multiyear contracts has increased by over 100% since our last conference call with such requests are becoming more frequent.

Speaker Change: We are proud of our continuing performance and the quality of lung for ph and be crystal clear to all of our potential customers. We welcome all head to head comparisons with any competitors in one device.

Steve Lisi: And to be crystal clear to all of our potential customers, we welcome all head-to-head comparisons with any competitor's NO device under any circumstance. Now, a few things about our new chief commercial officer, David Webster, and why we believe he is absolutely the right person to lead the commercial team. We were fortunate to have had several very capable candidates participate in the extensive vetting process for the job.

Speaker Change: Any circumstance.

Steve Lisi: While all the candidates were extraordinary, David's record of success and demonstration of leadership qualities led us to believe that he would drive the success of LungFitPH. He has extensive experience bringing products to market in the hospital setting and working within small to medium-sized companies. He also has built commercial teams from the stage where we currently are with customers in 10 states. Full-Sized Well-Oiled Machines Covering the Entire United States. I look forward to having David hit the ground running in two weeks.

Steve Leasey: Now, a few things about our new Chief Commercial Officer, David Webster, and why we believe he is absolutely the right person to lead the commercial team. We were fortunate to have had several very capable candidates participate in the extensive vetting process for the job. While all the candidates were extraordinary, David's record of success and demonstration of leadership qualities led us to believe that he will drive the success of Lung Fit PH. He has extensive experience bringing products to market in the hospital setting and working within small to medium size companies. He also has built commercial teams from a stage where we currently are, with customers in ten states to full size, well-oiled machines covering the entire United States.

Speaker Change: Now a few things about our new Chief commercial officer, David Webster and why we believe he is absolutely the right person to lead the commercial team.

David Webster: We were fortunate to have had several very capable candidates participate in an extensive vetting process for the job well.

David Webster: While all the candidates were extraordinary David's record of success and demonstration of leadership qualities led us to believe that he will drive the success of bunker ph.

David Webster: He has extensive experience bringing products to market in the hospital setting and working within small to medium size companies.

David Webster: He also has built commercial teams from the stage, where we currently are with customers in 10 states.

Speaker Change: Two full sized well oiled machine is covering the entire United States.

Steve Leasey: I look forward to having David hit the ground running in two weeks.

Speaker Change: I look forward to having David hit the ground running in two weeks.

Steve Leasey: In addition to having a well-qualified chief commercial officer at the helm, we also have a couple of other upcoming events that should further drag growth. Remember that our PMA supplement for the expansion of the Lungfit PH label to include cardiac surgery was accepted and is under review by the FDA. While there is no firm date for FDA to complete its review and timelines may change, based on our interactions with the agency to date, we expect the decision in the fourth quarter of calendar 2024. Recall that there are no nitric oxide products presently approved for cardiac surgery in the United States.

Steve Lisi: In addition to having a well-qualified chief commercial officer at the helm, we also have a couple of other upcoming events that should further drive growth. Remember that our PMA supplement for the expansion of the LungFitPH label to include cardiac surgery was accepted and is under review by the FDA. While there is no firm date for FDA to complete its review, and timelines may change, based on our interactions with the agency to date, we expect a decision in the fourth quarter of calendar 2024. Recall that there are no nitric oxide products presently approved for cardiac surgery in the United States.

Speaker Change: In addition to having a well qualified chief commercial officer at the helm. We also have a couple of other upcoming events that should further drive growth remember that our PMA supplement for the expansion of the lungs with Peach label to include cardiac surgery was accepted and is under review by the FDA.

Speaker Change: Well there is no firm date for FDA to complete its review and timelines may change based on our interactions with the agency to date, we expect a decision in the fourth quarter of calendar 2024.

Speaker Change: Recall that there are no nitric oxide products presently approved for cardiac surgery in the United States.

Steve Leasey: Looking outside of the U.S., CE mark for Lungfit PH remains pending when we continue to work collaboratively with regulators. While we don't presently have clarity on updated timing, we have learned to be patient given the overhaul of the EU medical device regulations that occurred a few years ago and the learning curve of the European notified bodies as everyone navigates the new rules. As we have mentioned previously, in addition to opening up doors in Europe for our system, receiving this CE mark will trigger a milestone payment from our partner Gets Healthcare, which has signed an agreement with us to commercialize the Lungfit PH in several countries in the Asia-Pacific region, excluding Japan.

Steve Lisi: Looking outside of the US, the CE mark for lung fit pH remains pending, and we continue to work collaboratively with regulators. While we don't presently have clarity on updated timing, we have learned to be patient given the overhaul of the EU medical device regulations that occurred a few years ago and the learning curve of the European notified bodies as everyone navigates the new rules. As we have mentioned previously, in addition to opening up doors in Europe for our system, receiving this CE mark will trigger a milestone payment from our partner, Getz Healthcare, which has signed an agreement with us to commercialize the lung fit ph in several countries in the Asia-Pacific region, excluding Japan.

Speaker Change: Looking outside of the U S CE Mark for luxury Peach remains pending and we continue to work collaboratively with regulators, while we don't presently have clarity on updated timing, we have learned to be patient given the overhaul of the EU medical device regulations that occurred a few years ago and a learning curve of the European notified bodies as everyone navigates.

Speaker Change: The new rules.

Getz healthcare: As we have mentioned previously in addition to opening up doors in Europe for our system, receiving the CE Mark will trigger a milestone payment from our partner Getz healthcare.

Speaker Change: Which has signed an agreement with us to commercialize the lung perfusion and several countries in the Asia Pacific region, Excluding Japan.

Steve Leasey: As I look ahead, while we continue to make significant strides forward, delays in reaching our milestones have left us slightly behind our previous near-term targets. Due to this, we are revising our fiscal year 2025 revenue guidance to greater than $10 million, down from $12 to $16 million.

Steve Lisi: As I look ahead, while we continue to make significant strides forward, delays in reaching our milestones have left us slightly behind our previous near-term target. Due to this, we are revising our fiscal year 2025 revenue guidance to greater than $10 million, down from $12 to $16 million. I will now address our cash burn. Preserving capital is critical for us at this juncture in our evolution in this current market. We began our analysis in January of how we could most effectively preserve capital and give our new chief commercial officer a runway to succeed.

Speaker Change: As I look ahead, while we continue to make significant strides forward delays in reaching our milestones have left us slightly behind the previous near term targets.

Speaker Change: Due to this we are revising our fiscal year 2025 revenue guidance to greater than $10 million down from 12 to 16 months.

Steve Leasey: I will now address our cash burn. Preserving capital is critical for us at this juncture in our evolution in this current market. We began our analysis in January of how we could most effectively preserve capital and give our new Chief Commercial Officer a runway to succeed. Since then, we have reduced our headcount by over 20% with most of the moves occurring in the June quarter. Most of the associated costs, including severance payments, will be recognized in the June quarter. The first quarter of our fiscal year, resulting in what we expect to be the largest cash burn of fiscal year 2025.

Speaker Change: I will now address our cash burn.

Speaker Change: Preserving capital is critical for us at this juncture in our evolution in this current market.

We began our analysis in January of how we could most effectively preserve capital and give our new chief commercial officer, a runway to succeed.

Steve Lisi: Since then, we have reduced our headcount by over 20%, with most of the moves occurring in the June quarter. Additionally, most of the associated costs, including severance payments, will be recognized in the June quarter, the first quarter of our fiscal year, resulting in what we expect to be the largest cash burn of fiscal year 2025. Conceivably, the decrease in our bank balance in the June quarter may end up being more than the other three quarters combined.

Speaker Change: Since then we have reduced our head count by over 20%, but most of the moves occurring in the June quarter most.

Most of the associated costs, including severance payments will be recognized in the June quarter. The first quarter of our fiscal year, resulting in what we expect to be the largest cash burn our fiscal year 2025.

Steve Leasey: Conceivably, the decrease in our bank balance in the June quarter may end up being more than the other three quarters combined.

Speaker Change: Conceivably the decrease in our bank balance in the June quarter May end up being more than the other three quarters combined.

Steve Leasey: To reiterate what was in the press release earlier today, the impacted R&D projects include the Longfit Pro program, which is on hold, and Longfit Go, where all engineering has been brought in-house, which resulted in the delay until 2026 for the next clinical study start. The Longfit PH transport-ready system is on track for FDA submission on or about December 31, 2024.

Steve Lisi: To reiterate what was in the press release earlier today, the impacted R&D projects include the LungFit Pro program, which is on hold, and LungFitGo, where all engineering has been brought in-house, which resulted in a delay until 2026 for the next clinical study, STAR. The LungFitPH Transport Ready System is on track for FDA submission on or about December 31st, 2024. Cancer's UNO program is nearing the end of Phase 1a and is targeting initiation of a Phase 1b combination study with anti-PD-1 therapy prior to the end of calendar 2024. Neuronauts, Beyond Air's subsidiary focused on autism spectrum disorder, is still moving towards a first in human study in 2025.

To reiterate what was in the press release earlier today the impact of the R&D projects include the lung Pro program, which is on hold.

Speaker Change: And month ago. We're all engineering has been brought in house, which resulted in a delay until 2026 for the next clinical study start.

Speaker Change: Along fifth ph transport ready system is on track for FDA submission on or about December 31, 2024.

Steve Leasey: Beyond Cancer's UNO program is nearing the end of Phase 1A, and it's targeting initiation of a Phase 1B combination study with NTP-1 therapy prior to the end of calendar 2024. Neuronus, beyond their subsidiary focused on autism spectrum disorder, is still moving towards your first in human study in 2025. Beyond Cancer and Neuronauts are focused solely on their respective human studies and in alignment with Beyond Des' focus on careful, cash management.

Speaker Change: Beyond cancer program is nearing the end of phase one eight is targeting initiation of a phase <unk> combination study with anti PD one therapy prior to the end of calendar 2024.

Speaker Change: Neuron us beyond their subsidiary focused on autism spectrum disorder is still moving towards your first in human study in 2025.

Steve Lisi: Cancer, and Neuronauts are focused solely on their respective human studies and in alignment with BeyondAir's focus on careful cash management. Now, an update on Beyond Cancer. Data were recently announced from its Phase Ia study evaluating ultra-high concentrations of nitric oxide, or UNO, in subjects with advanced relapsed or refractory unresectable primary or metastatic cutaneous and subcutaneous solid tumors. These encouraging first-in-class clinical data show UNO demonstrated evidence of immune system activation by a biomarker response in a heavily pretreated population.

Speaker Change: Beyond cancer, and neuro nuts are focused solely on their respective human studies and in alignment with beyond there is focus on careful cash management.

Steve Leasey: Now an update on Beyond Cancer. Data were recently announced from its phase 1A study evaluating ultra-high concentration nitric oxide or UNO in subjects with advanced relapse or refractory, unresectable, primary or metastatic cutaneous and subcutaneous solid tumors. These encouraging first-in-class clinical data show UNO demonstrated evidence of immune system activation by a biomarker response in a heavily pre-treated population. These data were presented at the American Society of Clinical Oncology, key opinion leader event, healthy conjunction with the 2024 Annual Meeting in Chicago. In addition, Beyond Cancer presented the design of the phase 1B trial, which will enroll up to 20 subjects with prior exposure to anti-PD1 antibody that have either progressed, not achieved the response, or have prolonged stable disease on single-agent anti-PD1 without radiographic evidence of continued tumor reduction.

Beyond Cancer: Now an update on beyond cancer data were recently announced from its phase one study evaluating ultra high concentration nitric oxide or no in subjects with advanced relapsed or refractory unresectable.

Beyond Cancer: Primary or metastatic cutaneous and subcutaneous solid tumors.

Speaker Change: These encouraging first in class clinical data showed <unk> demonstrated evidence of immune system activation by a biomarker response in a heavily pretreated population.

Steve Lisi: These data were presented at the American Society of Clinical Oncology Key Opinion Leader event held in conjunction with the 2024 annual meeting in Chicago. In addition, Beyond Cancer presented the design of the Phase 1B trial, which will enroll up to 20 subjects with prior exposure to anti-PD-1 antibody that have either progressed, not achieved a response, or have prolonged stable disease on single-agent anti-PD-1 without radiographic evidence of continued tumor reduction. Subjects enrolled in the Phase 1B trial will be treated with the UNO plus anti-PD-1 combination upon completion of the Phase 1A trial and regulatory approval. I encourage all of you to visit the Beyond Cancer website to get better educated on this potential transformational therapy for those suffering from solid tumors. Now, we'll turn it over to our CFO, Douglas.

Speaker Change: These data were presented at the American Society of clinical oncology key opinion leader event held in conjunction.

Speaker Change: With the 2024 annual meeting in Chicago.

Speaker Change: In addition, beyond cancer presented the design of the phase one B trial, which will enroll up to 20 subjects with prior exposure to anti PD. One antibody that has either progressed not achieve their response will have prolonged stable disease on single agent anti PD, one without radiographic evidence of continued tumor reduction.

Steve Leasey: Subject enrolled in the phase 1B trial will be treated with the UNO Plus anti-PD1 combination upon completion of the phase 1A trial and regulatory approval.

Subject enrolled in the phase one b trial will be treated with the <unk> plus anti PD one combination upon completion of the phase one trial and regulatory approval.

Steve Leasey: I encourage all of you to visit the Beyond Cancer website to get better educated on this potential transformational therapy for those suffering from solid tumors.

Speaker Change: I encourage all of you to visit the beyond cancer website to get better educated on this potential transformational therapy for those suffering from solid tumors.

Douglas Larson: Now we'll return it over to our CFO, Doug Lawson. Thanks to you, and good afternoon everyone. Our financial results for the fiscal year ended March 31st, 2024, are as follows. Revenue for the 2024 fiscal year was $1.2 million as compared with zero revenue in our previous fiscal year.

Speaker Change: Now I will turn it over to our CFO Douglas.

Douglas Quinton Larson: Thanks, Steve, and good afternoon, everyone. Our financial results for the fiscal year ended March 31st, 2024 are as follows. Revenue for the 2024 fiscal year was $1.2 million, as compared with zero revenue in our previous fiscal year. We are showing a $1.3 million loss in gross margin, which is worth me spending a bit of time on. That figure is close to $2 million lower than our expectations from a year ago, probably your expectations, too.

Douglas: Thanks, Steve and good afternoon, everyone.

Douglas: Our financial results for the fiscal year ended March 31, 2024 are as follows.

Revenue for the 'twenty 'twenty four fiscal year was $1 $2 million as compared with zero revenue and our previous fiscal year.

Douglas Larson: We are showing a 1.3 million loss in gross margin, which is worth me spending a bit of time on. That figure is close to $2 million lower than our expectations from a year ago and probably your expectations as well. For those of you who listened in for the third quarter call, none of this will be a surprise, but it's worth repeating. There are three main drivers of this margin shortfall. First, we incurred costs related to upgrades of the lung fit devices for the last two quarters of fiscal year 2024 and will continue to incur costs for the next few quarters as we complete the upgrades of all devices.

Douglas: We are showing a $1 3 million loss in gross margin, which is worth me spending a bit of time on.

Speaker Change: That figure is close to $2 million lower than our expectations from a year ago, probably your expectations as well.

Douglas Quinton Larson: For those of you who listened in for the third quarter call, none of this will be a surprise, but it's worth repeating. There are three main drivers of this margin shortfall. First, we incurred costs related to upgrades of the lung fit devices for the last two quarters of fiscal year 2024, and we'll continue to incur costs for the next few quarters as we complete the upgrades of all devices. Second, we prebuilt several hundred devices that are currently being upgraded.

Speaker Change: For those of you who listened in for the third quarter call. None of this will be a surprise, but it's worth repeating.

There are three main drivers of this margin shortfall.

Speaker Change: First we incurred costs related to upgrades of the lung fit devices for the last two quarters of fiscal year 2024, and we will continue to incur costs for the next few quarters as we complete the upgrades of all devices.

Douglas Larson: Second, we pre-built several hundred devices that are currently being upgraded, so we have depreciation of devices that are not currently generating revenue. Depreciation explains almost half of the margin variance. This effect disappears as we place units in hospitals and is not a drag on cash. Third, we're sub-optible in our physical warehousing infrastructure, but as we expand our customer base in each region, this effect will dissipate. Research and development expenses for the fiscal year ended March 31, 2024, were $24.4 million compared with $16.8 million for the previous fiscal year. The increase of $7.6 million was attributed primarily to an increase in development costs, with just over half of that increase for external costs for trials and professional fees.

Douglas Quinton Larson: So we have depreciation of devices that are not currently generating revenue. Depreciation explains almost half of the margin variance. This effect disappears as we place units in hospitals and is not a drag-on cap.

Speaker Change: Second we prebuilt several hundred devices that are currently being upgraded so we have depreciation of devices that are not currently generating revenue.

Speaker Change: Depreciation explains almost half of the margin variance.

This effect disappears as we place units in hospitals and is not a drag on cash.

Douglas Quinton Larson: Third, we're suboptimal in our physical warehousing infrastructure, but as we expand our customer base in each region, this effect will disappear. Research and development expenses for the fiscal year ended March 31, 2024 were $24.4 million, compared with $16.8 million for the previous fiscal year. The increase of $7.6 million was attributed primarily to an increase in development costs, with just over half of that increase for external costs for trials and professional services. GNA expense for the fiscal year ended March 31st, 2024 was $37.3 million, compared with $34.7 million for the previous fiscal year.

Speaker Change: Third were suboptimal in our physical warehousing infrastructure, but as we expand our customer base in each region. This effect will dissipate.

Research and development expenses for the fiscal year ended March 31, 2024, or $24 $4 million compared with $16 $8 million for the previous fiscal year.

Speaker Change: The increase of $7 $6 million was attributed primarily to an increase in development cost with just over half of that increase for external costs for trials and professional fees.

Douglas Larson: GNA expense for the fiscal year ended March 31, 2024, was $37.3 million compared with $34.7 million for the previous fiscal year. The biggest moving parts in the net increase of $2.7 million were due to increases in headcount. Other expense for the year ended March 31, 2024, and March 31, 2023, were losses of $1.3 million and $7.3 million, respectively. The $6 million improvement was mainly due to the $7.1 million year-on-year decrease in non-product related litigation, an additional $1.1 million of interest income, and $0.7 million pick-up from the change in fair value of our warrant liability, partially offset by an increase in interest expense of $2.9 million.

Speaker Change: G&A expense for the fiscal year ended March 31, 2024 was $37 $3 million compared with $34 $7 million for the previous fiscal year.

Douglas Quinton Larson: The biggest moving parts in the net increase of $2.7 million were due to increases in headcount. Other expenses for the year ended March 31st, 2024, and March 31st, 2023, were losses of $1.3 million and $7.3 million, respectively. The $6 million improvement was mainly due to the $7.1 million year-on-year decrease in non-product-related litigation, an additional $1.1 million of interest income, and $0.7 million pickup from the change in fair value of our warrant liability, partially offset by an increase in interest expense of $2.9 million.

Speaker Change: The biggest moving parts in the net increase of $2 $7 million were due to increases in head count.

Speaker Change: Other expense for the year ended March 31, 2024, and March 31, 2023 were losses of $1 3 million and $7 $3 million respect respectively.

Speaker Change: The $6 million improvement was mainly due to the $7 1 million year on year decrease in non product related litigation on.

Speaker Change: An additional $1 $1 million of interest income and zero point $7 million pickup from the change in fair value of our warrant liability.

Speaker Change: Partially offset by an increase in interest expense of $2 $9 million.

Douglas Larson: For the year ended March 31, 2024, the company recorded a net loss of $64.3 million, of which $60.2 million, or $1.82 per share, was attributable to the shareholders of Beyond Air Inc. compared with the net loss of $59.4 million or $1.86 a share for the fiscal quarter ended March 31, 2023. Net cash burden in the quarter ended March 31, 2024, was $12.8 million. We continue to expand our pool of lung-fit devices in addition to making payments on our B-CAP study, continue to work on the development of our transport-ready device, human trials in Beyond Cancer, and advances in our autism program.

Douglas Quinton Larson: For the year ended March 31st, 2024, the company recorded a net loss of $64.3 million, of which $60.2 million, or $1.82 per share, was attributable to the shareholders of Beyond Air, Inc., compared with a net loss of $59.4 million, or $1.86 per share, for the fiscal quarter ended March 31, 2023. Net cash burn for the quarter ended March 31, 2024 was $12.8 million. We continue to expand our pool of lung fit devices, and in addition to making payments on our VCAP study, continue to work on the development of our transport ready device, Human Trials in Beyond Cancer, and Advances in our Autism Program.

For the year ended March 31, 2024 at the company recorded a net loss of $64 3 million of which $62 million or $1 82 per share was attributable to the shareholders of beyond Air Inc.

Speaker Change: Paired with a net loss of $59 4 million or $1 86, a share for the fiscal quarter ended March 31 2023.

Speaker Change: Net cash burned in the quarter ended March 31, 2024 was $12 $8 million.

Speaker Change: We continue to expand our pool of lung fit devices. In addition to making payments on our B cap study continued to work on the development of our transport ready device.

Speaker Change: Human trials and beyond cancer and advances in our autism program.

Douglas Larson: Finally, in March, we entered into a security purchase agreement with Roth Capital and Lade Law. In that offer, we sold just over 9.6 million shares of common stock with a one-for-one callable warrant at $1.66 per share. The warrant has a $2.25 exercise price and can be called upon us achieving $4.5 million of revenues in the quarter ending March 31, 2025. We received net proceeds of $14.6 million at the end of the quarter from this purchase agreement. As of March 31, 2024, the company had cash, cash equivalents, and marketable securities of $34.5 million. Steve mentioned in his earlier remarks, we are executing a plan to preserve capital and extend our cash runway.

Douglas Quinton Larson: Finally, in March, we entered into a security purchase agreement with Roth Capital and Laidlaw. In that offer, we sold just over 9.6 million shares of common stock with a one-for-one callable warrant at $1.66 per share. The warrant has a $2.25 exercise price and can be called upon as achieving $4.5 million of revenues in the quarter ending March 31st, 2025. We received net proceeds of $14.6 million at the end of the quarter from this purchase.

Finally in March we entered into a security purchase agreement with Roth capital in Laidlaw.

Speaker Change: That offer we sold just over $9 6 million shares of common stock with a one for one callable warrants at $1 66 per share.

Speaker Change: Warrants has a $2 25 exercise price can be called upon us achieving $4 $5 million of revenues in the quarter ending March 31 2025.

Speaker Change: We received net proceeds of $14 $6 million at the end of the quarter from this purchase agreement.

Douglas Quinton Larson: As of March 31st, 2024, the company had cash, cash equivalents, and marketable securities of $34.5 million. As Steve mentioned in his earlier remarks, we are executing a plan to preserve capital and expand our cash runways. We'll start seeing the impact of that plan in our second fiscal quarter, which starts a week from today. Finally, as Garth mentioned in his opening remarks, Given that the timeline between this call and the close of the next quarter is so close, we're not planning on hosting a Q1 conference call next. And with that, I'll hand the call back over to Steve.

Speaker Change: As of March 31, 2024, the company had cash cash equivalents and marketable securities of $34 $5 million.

Speaker Change: As Steve mentioned in his earlier remarks, we are executing our plan to preserve capital and extend our cash runway.

Douglas Larson: We'll start seeing the impact of that plan in our second fiscal quarter, which starts a week from today.

Steve Lisi: You'll start seeing the impact of that plan in our second fiscal quarter, which starts a week from today.

Garth Russell: Finally, as Garth mentioned in his opening remarks, given that the timeline between this call and the close of the next quarter is so close, we're not planning on hosting a Q1 conference call next month.

Steve Lisi: Finally, as Garth mentioned in his opening remarks, given that the timeline between this call and the close of the next quarter or so close we're not planning on hosting our Q1 conference call next month.

Steve Leasey: And with that, we'll hand the call back over to Steve.

Steve Lisi: And with that I'll hand, the call back over to Steve.

Steve Leasey: Thanks, Doug.

Steve Lisi: Thanks, Doug.

Steve Lisi: Before we open the call up for questions, I would like to address one more item. Two weeks ago, on June 7th, we filed suit in New York State Supreme Court against Airgas for breach of contract. There will be information in the 10k that will be available shortly after this call. As this is pending litigation, I will not be making any further comments on this matter. We will now take any questions you may have.

Steve Leasey: Before we open the call up for questions, I would like to address one more item.

Steve Lisi: Before we open the call up for questions I would like to address one more item.

Steve Leasey: Two weeks ago on June 7, we filed suit in New York State Supreme Court against Air Gas for breach of contract. There will be information in the 10-K that will be available shortly after this call. As this is a pending litigation, I will not be making any further comments on this matter.

Steve Lisi: Two weeks ago on June seven we filed suit in New York State Supreme Court against Airgas for breach of contract.

There will be information in the 10-K that will be available shortly after this call.

Speaker Change: As this is a pending litigation I will not be making any further comments on this matter.

Operator: We will now take any questions you may have. Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation, so we'll indicate that your line is in the question queue. And you may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: We will now take any questions you may have.

Operator: Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. And you may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. Our first question comes from the line of Marie Thibault with BTIG. Please proceed with your question.

Speaker Change: Thank you we will now be conducting a question and answer session.

If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Information tone will indicate that your line is in the question queue.

Speaker Change: And you May press star two if you'd like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Marie Thibault: Our first question comes into the line of Marie Thibault with BTIG. Please proceed with your question.

Speaker Change: Our first question comes from the line of Thibault with BTG. Please proceed with your question.

Marie Yoko Thibault: Good evening. I want to start off here with a question about the fiscal fourth quarter we just completed and try to understand why we didn't see more of a sequential lift in revenue between fiscal third and fiscal fourth quarter. And as part of that, I would also love to understand some of the assumptions built into the fiscal 25 outlook.

Steve Leasey: Good evening. I want to start off here with a question about the fiscal fourth quarter we just completed. And try to understand why we didn't see more of a sequential list in revenue between fiscal third and fiscal fourth quarter. And as part of that, would also love to understand some of the assumptions built into the fiscal 25 outlook.

Speaker Change: Good evening I wanted to start off here with a question about the fiscal fourth quarter, we just completed and.

Thibault: I try to understand why we didn't see more of a sequential lift in revenue between fiscal third and fourth quarter and as part of that would also love to understand some of the assumptions built into the fiscal 'twenty outlook.

Steve Lisi: Thanks, Marie. Like we said in our prepared remarks, it was a decision that we made to make sure that what we were upgrading got tested out with our current customers, and we wanted to make sure that everything was working well before we went out to the broader market and brought new customers in. It's important to upgrade our existing customers. So that process took a little longer, so we didn't really get as many new customers as we had anticipated. I think that's the main reason. I wouldn't say it's the only reason, but that would be the main one.

Steve Leasey: Sure, thanks, Marie. Like we said in prepare remarks, you know, it was a little, a decision that we made to make sure that what we were upgrading got tested out with our current customers. And we wanted to make sure that everything was working well before we went out to the broader market and brought new customers in.

Speaker Change: Sure. Thanks Marie.

Speaker Change: Like we said in prepared remarks, you know it was a little.

Speaker Change: A decision that we made to make sure that what we were upgrading got test it out with our current customers and we wanted to make sure that everything was.

Marie: Was working well before it went out to the broader market and brought new customers in and it's important to upgrade our existing customers. So that process took a little longer. So we didn't really get as many new customers as we had anticipated.

Steve Leasey: And it's important to upgrade our existing customers. So that process took a little longer. So we didn't really get as many new customers as we anticipated. I think that's the main reason. I wouldn't say it's the only reason, but that would be the main reason.

Marie: I think that that's the main reason I wouldn't say, it's the only reason, but that would be the main reason.

Steve Leasey: Okay, and some of the assumptions in the fiscal 25 outlook. Well, we're assuming that our pipeline is accurate in terms of potential hospitals over the next nine months. And that our success rate, which we can measure fairly decently given the experience we've had in the market, that we're in a normal range of that.

Steve Lisi: Okay, and some of the assumptions in the fiscal 25 outlook.

Speaker Change: Okay, and some of the assumptions in the fiscal 'twenty five outlook.

Steve Lisi: Well, we're assuming that our pipeline is accurate in terms of potential hospitals over the next nine months and that our success rate, which we can measure fairly decently given the experience we've had in the market, that we're in a normal range of that. Not to mention, we have someone new who's going to be leading this team starting in two weeks, and we have a lot of confidence in our new chief commercial officer and the strategies that he will bring us.

Speaker Change: Well were.

Speaker Change: Assuming that our pipeline is as accurate in terms of.

Potential hospitals over the next nine months.

Speaker Change: And that our success rate.

Speaker Change: Which we can measure fairly decently given the experience we've had in the market that we're in a normal range of that not to mention.

Steve Leasey: Not to mention we have someone new who's going to be leading this team starting in two weeks, and we have a lot of confidence in our new chief commercial officer and the strategies that he will bring to us. So I think those are some of the assumptions. I mean, it's important that we have a database of targets, and we have an expected win rate. And I think that with our machine and the shape that it's in, I think we're going to be just fine.

Speaker Change: We have someone new who is going to be leading this team starting in two weeks and we have a lot of confidence in our new Chief commercial officer.

And the strategies that he will bring to us so.

Steve Lisi: So I think those are some of the assumptions. I mean, it's important that we have a database of targets, and we have an expected win rate. And I think that with our machine in the shape that it's in, I think we're going to be just fine.

Speaker Change: I think those are some of the assumptions I mean, it's important that we have a database of of targets.

Speaker Change: And we have an expected win rate.

Speaker Change: And I think that our with our machine in the shape that it's in I think we're gonna be just fine.

Marie Thibault: Okay, given we're five, six days away from the end of your fiscal first quarter.

Steve Lisi: Okay, given we're five, six days away from the end of your fiscal first quarter, any chance you can give us some color around how that quarter is doing, especially since we won't get to hear from you publicly next quarter?

Speaker Change: Okay, given where five six days away from the end of your fiscal first quarter.

Steve Leasey: Any chance you can give us some color around how that quarter is doing, especially since we won't get to hear from you publicly next quarter. Yeah, I mean, it's certainly better than last quarter. Our growth in this quarter, we better than our growth from 4Q over 3Q. That's for sure.

Speaker Change: Any chance you can give us some color around how that quarter is doing especially since we won't get to hear from you publicly next quarter.

Steve Lisi: Yeah, I mean, it's certainly better than last quarter. Our growth in this quarter will be better than our growth from 4Q over 3Q, that's for sure. Not just a little bit, but the growth rate will be better.

Speaker Change: Yeah, I mean, it's certainly better than last quarter, our growth in this quarter, we better than our growth in from for Q over Q. That's for sure not just a little bit but the growth rate will be.

Steve Leasey: Not just a little bit, but the growth rate will be significantly better.

Speaker Change: Significantly better.

Steve Lisi: Okay, last question from me and then I'll let others jump in. Thanks for the update on cash burn. Can you remind us about the debt financing you did a couple quarters ago, the tranches that are remaining, do you still have access to the full amount? I know there were some milestones around that. Are those, is that funding still available to you?

Marie Thibault: Okay, last question from me, and then I'll let others jump in.

Speaker Change #100: Okay last question from me and then I'll, let others jump in thanks.

Marie Thibault: Thanks for the update on cash burn.

Speaker Change #101: For the update on cash burn can you remind us on the debt financing you did.

Steve Leasey: Can you remind us on the debt financing you did a couple of quarters ago? You know, the tranches that are remaining. Do you still have access to the full amount? I know there were some milestones around that. Are those, is that funding still available to you?

Speaker Change #102: A couple of quarters ago.

Is that a are remaining.

Speaker Change #103: You still have access to the full amount I know there were some milestones around that are those is that funding still available to you.

Steve Lisi: So the first milestone funding is not available to us? But there is another pool of money that could be available to us if we so choose to have a discussion with our lender.

Douglas Larson: So the milestone, the first milestone funding is not available to us, but there is another pool of money that could be available to us if we so choose to have a discussion with our lender.

Speaker Change #104: So the milestone.

The first milestone funding is not available to us, but there is another pool of money that that could be available to us. If we so choose to have a discussion with our lender.

Steve Lisi: Okay, and can you tell me how much that is?

Douglas Larson: Okay, and can you tell me how much that is?

Speaker Change #105: Okay and can you tell me how much of that is.

Douglas Larson: Doug, what is that number? So 10 is a second tranche; 12 and a half, the third tranche. 12 and a half. So the 10 is not available anymore. The 12 and a half is potentially- okay, that's helpful.

Douglas Quinton Larson: Doug, what was that number? So 10 was the second trunch, and 12 and a half was the third trunch.

Speaker Change #105: Doug what is it now and the second tranche 12, five to 13 12, and a half so the tenants not available anymore. The 12 and a half is essentially.

Douglas Quinton Larson: and a half. So the 10 is not available anymore. The 12 and a half is potentially available. Okay, that's helpful. Thank you.

Steve Lisi: Okay, that's helpful. Thank you.

Speaker Change #106: Okay. That's helpful. Thank you.

Marie Thibault: Thank you.

Marie Thibault: Thanks, Marie.

Mary: Thanks Mary.

Yale Jen: Our next question comes from the line of Yale Jen with Lade Long Company. Please proceed with your question. Thanks for taking the questions. My first question is that given that you guys going to be more conservative in terms of the R&D expenses, so how should we think about how to keep your perspective for fiscal 2025, so then R&D as well as in SGNA?

Operator: Our next question comes from the line of Yale Gen with Laidlaw and Company. Please proceed with your question.

Mary: Our next question comes from the line of Yale Jen with Laidlaw <unk> Company. Please proceed with your question.

Yale Gen: Thanks for taking the questions. My first question is that given that you guys are going to be more conservative in terms of R&D expenses, how should we think about, from a housekeeping perspective, the trend for fiscal 2025, both in R&D as well as in SG&A?

Speaker Change #108: Thanks for taking the questions.

First question is that given that you guys going to.

Speaker Change #109: Be more conservative in terms of the R&D expenses.

Yale Jen: So how should we think about that Paul.

Speaker Change #111: Housekeeping perspective.

Paul: For fiscal 2025, both in R&D as well.

Paul: Is it in SG&A.

Douglas Larson: Thanks, I'll take that one. So in our modeling and in the plan that Steve and I have put together, we were looking for kind of north of 15% of our operating cost reduction year-on-year, and we've got plans to attain that. There's more of that in R&D, so we're looking at north of 20% reduction in overall R&D spend year-on-year, and then in SG&A somewhere between 5 and 10.

Douglas Quinton Larson: Thanks. I'll take that one. You know, so in our modeling and in the plan that Steve and I have put together, we were looking for kind of north of 15% of our operating cost reduction year on year. And we've got a plan to attain that. There's more of that in R&D, so we're looking at north of 20% reduction in overall R&D spend year on year, and then in SG&A somewhere between five and and a little bit lower in SG&A obviously because our selling is in there and we didn't want to didn't want to touch that part and give David a chance to hit the market.

Paul: Thanks ill take that one.

Paul: No.

Paul: In our modeling.

Paul: The plan that Steve and I put together we were looking for.

Steve Lisi: North of 15% of our operating cost reduction year on year.

Steve Lisi: And we've got a plan.

Steve Lisi: To attain that.

Steve Lisi: As more of that in R&D. So we're looking at north of 20% reduction in overall R&D spend year on year.

Steve Lisi: And then in SG&A somewhere.

Steve Lisi: Somewhere between five and 10.

Douglas Larson: And a little lower in SGNA, obviously, because our selling is in there and we didn't want to, didn't want to touch that part and give David a chance to get the market running.

Steve Lisi: Okay.

Speaker Change #113: A bit lower.

David Webster: And SG&A, obviously, because our selling isn't there and we didn't want it didn't want to touch that part can give david a chance to hit the market running.

Douglas Larson: And also that in terms of the revenue for fiscal 2025, should we anticipate a greater portion of the revenue in the second half of this as well as 25 versus the first?

Douglas Quinton Larson: And also in terms of revenue for Fiscal 2025. Should we anticipate a greater portion of the revenue in the second half of the fiscal 25 versus the first?

Speaker Change #114: And also that in terms of the revenue.

Speaker Change #115: Fiscal 2025.

Speaker Change #118: Sure, we anticipate major Polish it up the revenue on the second half of this disclosed 25 or worse.

Douglas Larson: Yes, sir. Yeah, ramping up as Steve was saying, you know, higher next quarter than last quarter, and then continuing that trend through Q3 support.

Speaker Change #116: Yes, Sir.

Douglas Quinton Larson: Yeah, wrapping up. As Steve was saying, you know, higher next quarter, higher growth next quarter.

Speaker Change #117: Yes ramping up <unk>.

Speaker Change #117: He was saying.

Speaker Change #119: Higher next quarter higher growth next quarter than last quarter, and then continuing that trend through Q3 simple.

Steve Lisi: And maybe the last question here is that for the last quarter, the reported quarter that you indicated, were there any new accounts or mostly just the renewal of the existing accounts, and what do you anticipate? At least starting in fiscal 2025, do you anticipate more new accounts instead of, again, renewals, or how should I see the mix? How do we see the mix, at least from your projection?

Douglas Larson: And maybe the last question here is that for the last quarter that the report is reported quarter that you indicated that was there any new accounts, or mostly just the renewing of the existing accounts, and what do you anticipate at least starting in fiscal 2025 to anticipate more new accounts instead of the, again, renewing or how should I see the mix? How do we see the mix, at least from your project there? Yeah, it's going to be a lot of new accounts, yeah. I mean, that's the only way we're going to increase the revenues or existing customers. You know, there could be a little bit of growth there if they're going to use more than anticipated, but that's marginal. You know, you don't anticipate a hospital making an estimate and then going over by 50 or 100%. I mean, that's extremely rare.

Speaker Change #120: And maybe the last question here.

Well the last quarter that they reported this quarter.

Speaker Change #120: You indicated it.

Speaker Change #121: Was there any new accounts or mostly just the renewal.

Speaker Change #122: Existing accounts and what do you anticipate.

Speaker Change #123: Elite study.

Speaker Change #124: Just call it 2025.

Speaker Change #125: Meanwhile, you can instead of again redoing our algae.

Speaker Change #126: How should we see the mix.

Speaker Change #127: At least from your project.

Steve Lisi: It's going to be a lot of new accounts, you know. I mean, that's the only way we're going to increase revenues. Our existing customers, you know, there could be a little bit of growth there if they use more than anticipated, but that's marginal. You don't anticipate a hospital making an estimate and then going over by 50 or 100%. I mean, that's extremely rare.

Speaker Change #128: And it's going to be a lot of new accounts, yeah. I mean, that's the only way we would increase the increase the revenues of our existing customers.

Speaker Change #129: You know there could be a little bit of growth there if if theyre going to use more than anticipated, but that's marginal you know it's you don't anticipate a hospital, making an estimate and then going over by 50 or 100% I mean, that's extremely rare so.

Douglas Larson: So it's really new hospitals that are going to drive growth. So we signed new hospitals in our fiscal fourth quarter, we've signed more new hospitals in this fiscal first quarter that we're about to end, and we did in our fiscal fourth quarter, and we anticipate to continue that trend, right? The growth rates quarter of a quarter will get bigger; eventually, they'll flatten out because we'll get too big and the quarters will be tough to keep going. But the number of hospitals being signed should continue to rise over the next, you know, several quarters. If not into fiscal 26, we should see that trend continue significantly.

Speaker Change #130: It's really new hospitals that are going to drive growth. So we signed new hospitals and in our fiscal fourth quarter, we signed more new hospitals in this fiscal first quarter that were about to end that we did in our fiscal fourth quarter and we anticipate to continue that trend right the growth rates quarter over quarter will get bigger eventually they'll flatten out because we will get too big in the quarter.

Steve Lisi: So it's really new hospitals that are going to drive growth. And so we signed new hospitals in our fiscal fourth quarter. We've signed more new hospitals in this fiscal first quarter that we're about to end than we did in our fiscal fourth quarter. And we expect to continue that trend, right? The growth rates quarter over quarter will get bigger, but eventually, they'll flatten out because we'll get too big in the quarter. So it'll be tough to keep that going, but the number of hospitals being assigned should continue to rise over the next several quarters. If not into fiscal 26, we should see that trend continue significantly.

Speaker Change #131: So it will be tough to get that going but.

Speaker Change #132: Number of hospitals being signed should continue to rise over the next several quarters.

Not into fiscal 'twenty, six we should see that can that trend continue significantly.

Yale Jen: Thank you. Okay, great. Thanks a lot. Appreciate the colors on the development.

Yale Gen: Okay, great. Thanks a lot. I appreciate the colors on the development.

Speaker Change #133: Okay, great. Thanks, a lot.

Speaker Change #134: The color on the development.

Yale Jen: Great. Thanks, you.

Speaker Change #135: Great. Thanks, Yeah.

Speaker Change #135: Yeah.

Matt Kaplan: Our next question comes from the line of Matt Kaplan with Latinburg Salmon. Please proceed with your question. Hey, guys. Thanks for taking questions.

Operator: And our next question comes from the line of Matt Kaplan with Lattenberg Thalmann. Please proceed with your question.

Speaker Change #135: And our next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Matthew Lee Kaplan: Hey guys, thanks for taking questions. Steve, maybe you can help us understand in terms of where you are with respect to the software upgrades across the existing devices.

Speaker Change #136: Hey, guys. Thanks for taking questions.

Steve Leasey: Steve, maybe you can help us understand in terms of where you are with respect to the software upgrades across the existing devices. Yeah, so Matt, we have two lines that are contract manufacturers. So we are building new systems on one, and we're upgrading old systems on the other. So that process will continue for the next couple of quarters. Instead of upgrading all of them on both lines, we want to make sure that we have a line making new ones from scratch as well. So, you know, the technicians over there building it don't get rusty, right? Because it's a different process when you're upgrading versus building new ones.

Speaker Change #136: Yes.

Steve maybe you can help us understand in terms of where you are.

Steve Lisi: With respect to the software upgrades across the existing.

Steve Lisi: <unk> devices.

Steve Lisi: Yeah, Matt, we have two lines that are contract manufacturers. So we are building new systems on one, and we're upgrading old systems on the other. So That process will continue for the next couple of quarters of upgrading all of them on both lines; we want to make sure that we have a line making new ones from scratch as well, so the technicians over there building them don't get rusty, right? Because it's a different process when you're upgrading versus building new ones. So we have a line for each, and it will continue for the next couple of quarters.

Steve Lisi: Yeah. So Matt we have a we have two lines at our contract manufacturer. So we are building new systems on one and were upgrading old systems on the other so.

That process will continue.

Steve Lisi: For the next couple of quarters.

Steve Lisi: Instead of upgrading all of them on both lines, we want to make sure that.

We have a line, making new ones from scratch as well so that you know.

Steve Lisi: The technicians over their building it don't get Rusty right, because it's a different process when you're upgrading versus building new ones. So we have a line for each so it will continue for the next couple of quarters.

Steve Leasey: So we have a line for each. So it will continue for the next couple of quarters.

Steve Lisi: So, kind of by mid-fiscal year, you'll be completed with the upgrades, and then we should think about...

Steve Leasey: So kind of mid fiscal year, you'll be completed with the upgrades, and then we should think about. I would say mid fiscal year. I would say more towards the end of the fiscal year. Remember, our fiscal year will be. You know, it's nine months from the end of this fiscal year. So it's going to be at least the next two to three quarters where we're going to continue doing these upgrades. But also building new ones. So we don't anticipate any issues not being able to meet demand. If we do, that would be a high-class problem to have.

Speaker Change #137: So kind of a mid fiscal year youll be completed with the upgrades and then and then we should think about them.

Steve Lisi: I would say mid-fiscal year, but I would say more towards the end of the fiscal year. Remember, our fiscal year will be... You know, it's nine months from the end of this fiscal year, so it's going to be at least the next two to three quarters where we're going to continue doing these upgrades, but also building new ones. So we don't anticipate any issues not being able to meet demand. If we do, that would be a high class problem to have.

Wouldn't say mid fiscal year, I would say more towards the end of the fiscal year remember our fiscal year will be.

Speaker Change #137: It's nine months from the end of this fiscal year. So it's going to be at least the next to two to three quarters, where we're going to continue doing these upgrades, but also building new ones. So we don't anticipate any issue.

Issues, not being able to meet demand.

Speaker Change #137: If we do that would be a high class problem to have and we do have the ability to crank up the new machines.

Steve Leasey: And we do have the ability to crank up the new machines. Being built on our new machine line. If need be. But of course, as you know, it doesn't happen overnight. So if we do see that demand coming, we would have to make that decision, you know, three, four, five months ahead of that to ramp up. So, and you know, you'll get a pretty good idea. It's not like we get shocked that, you know, the 17 hospitals signed in two weeks that we weren't anticipating. That doesn't happen here. So we'll get some good, you know, time to make those decisions, right?

Steve Lisi: And we do have the ability to crank up the new machines being built on our new machine line if need be. But, of course, as you know, it doesn't happen overnight. So if we do see that demand coming, we would have to make that decision, you know, three, four, five months ahead of that to ramp up. So, you'll get a pretty good idea. It's not like we get shocked that, you know, 17 hospitals signed contracts in two weeks that we weren't anticipating. That doesn't happen here.

Speaker Change #137: Being built on our on our new machine line, if if need be but of course as you know it doesn't happen overnight. So if we do see that demand coming we would have to make that decision. You know 345 months ahead of.

That to ramp up so you know you'll you'll get a pretty good idea, it's not like we get shocked that are you.

Speaker Change #138: You know that the 17 hospitals signed in two weeks that we weren't anticipating that doesn't happen here. So we'll get some good.

Steve Lisi: So we'll get some good, you know, time to make those decisions, right? We can see hospitals three, six, nine months out of the pool of hospitals that we're targeting. So right now, we think what we're manufacturing and retrofitting is good. And if we can place all those systems, we'll certainly do a hell of a lot better than the 10 million for this fiscal year. We're anticipating hitting that number.

Speaker Change #138: You know time.

Speaker Change #138: To make those decisions right. We have we can see hospitals 369 months out of the pool of hospitals that we're targeting so right now we think what we're manufacturing in retrofitting is is good and if we can place all of those systems. We will certainly do a hell of a lot better than a $10 million for this fiscal year, but again where were.

Steve Leasey: We have; we can see hospitals: three, six, nine months out of the pool of hospitals that we're targeting. So right now we think what we're manufacturing and retrofitting is good. And if we can place all those systems, we'll certainly do a hell of a lot better than the 10 million for this fiscal year. But again, we're anticipating to hit that number, but we are building a little bit more than what that number would translate to. So if we were able to place all of our machines, we'd certainly be able to beat that number. So we're not in a deficit capacity in terms of supply.

Speaker Change #138: Yeah, we're anticipating to.

Speaker Change #138: To hit that number.

Steve Lisi: But we are building a little bit more than that number would translate to. So if we were able to place all of our machines, we'd certainly be able to beat that number. So we're not. Deficit Capacity in terms of supply.

Speaker Change #138: But we are building a little bit more.

Speaker Change #138: And then what that number would translate to so if we are able to place all of our machines, we'd certainly be able to beat that number so we're not at all.

Speaker Change #138: Deficit capacity in terms of supply.

Steve Leasey: Okay, and then how should we think about and where you focused on driving growth? Is it more kind of breath or depth of use at existing accounts? So breath meaning, expanding customers and breath, a death meaning, you know, use at existing customers are both. So, I think it's both, but it's a new customer who's going to be the real driver. I mean, you know, it, again, a hospital knows they're using 10,000 hours a year or 15,000 hours or 3,000 hours or 25,000 or what have you. You know, they're not going to come back to us and say, hey, you know, we're using 50% more than we thought; we love your machine.

Speaker Change #139: Okay, and then how should we think about and where are you focused on and.

Steve Lisi: And then how should we think about it, and where are you focused on driving growth? Is it more breadth or depth of use at existing accounts? So breadth means expanding customers, and breadth and depth mean, you know, use at existing customers, or both?

Speaker Change #140: Driving growth is it more kind of breadth or depth of you said out of existing accounts.

Speaker Change #141: Perhaps meeting expanding.

Speaker Change #142: Customers and breath designate them, you know use at existing customers or both.

Steve Lisi: So I think it's both, but new customers are going to be the real driver. I mean, you know, it Again, a hospital knows they're using 10,000 hours a year or 15,000 hours or 3,000 hours or 25,000 or whatever, you know, they're not going to come back to us and say, hey, you know, we're using 50% more than we thought. We love your machine.

Speaker Change #143: So I think it's both but it's new customers is going to be the real driver I mean, you know it.

Speaker Change #143: Again, our hospital knows they're using 10000 hours a year of 15000 hours of 3000 hours or 25000, and what have you.

Speaker Change #143: You know that they're not going to come back to us and say Hey, you know what we're using 50% more than we thought we'd love your machine I mean, there can be some increase there maybe they're switching over from from a you know from a flow land for example, switching over from that product to.

Steve Lisi: I mean, there can be some increase there. Maybe they're switching over from, you know, Flowland, for example, they're switching over from that product to use Nitric more. But again, it's not going to be some massive, massive move. I think that, you know, getting recommendations from existing customers from hospitals that they, they, you know, they work with in certain, certain areas is really where we're starting to build the business. So I think it's the referrals that help us the most.

Steve Leasey: I mean, there can be some increase there. Maybe they're switching over from, you know, from a flow land, for example, they're switching over from that product. To use nitric more, but again, it's not going to be some massive, massive move.

Speaker Change #144: Do you use nitric more.

Speaker Change #144: But again, it's not going to be some massive massive move I think that.

Steve Leasey: I think that, you know, getting recommendations from existing customers from hospitals that they, you know, they work with on certain, in certain areas is really where we're starting to build the business. So I think it's the referrals that helps us the most.

Speaker Change #145: Getting <unk>.

Speaker Change #146: Recommendations from existing customers from hospitals that they they.

They work with uncertain certain areas is really where we're starting to build the business. So I think it's the referrals that helps us the most.

Steve Leasey: We just also, you know, recall that we do have a partner overseas in Asia, and we expect before the end of this calendar year to hopefully get some European partners. So there will be some. Some shipments going out to at least Asia this fiscal year.

Steve Lisi: Just also, you know, recall that we do have a partner overseas in Asia, and we expect before the end of this calendar year to hopefully get some European partners. So there will be some shipments going out to at least Asia this fiscal year.

Speaker Change #147: We just also.

Speaker Change #148: Recall that we do have a partner.

Overseas.

Speaker Change #149: Asia, We expect before the end of this calendar year to hopefully get some.

Speaker Change #149: Our European partners, so there will be some.

Speaker Change #150: Some some shipments going out to at least Asia This fiscal year.

Matt Kaplan: And then last question in terms of the TMA supplement, which is under review. I guess initially we had thought about calendar's second half of this year. What's what's what's pushing it to the fourth quarter and what do you think that impact will have on your revenue wrap or upon approval for the TMA for the already vascular indication. Okay, it's still second half, Matt. I wish it was the third quarter and so the fourth quarter of the calendar year, but still in the second half. And, you know, FDA takes their time, and I don't think it's going to impact.

Steve Lisi: And then last question in terms of the TMA supplement, which is under the GAO, I guess initially we had thought about counting your second half of this year. What's what's pushing it to the fourth quarter? And what do you think that impact will have on your revenue ramp upon approval for the PMA for the RDA vest? Okay, it's still the same.

And then last question in terms of the PMA supplement a which is under yeah.

Speaker Change #150: I guess initially what we had thought about calendar years second half.

Speaker Change #150: This year.

Speaker Change #151: What's worse pushing.

Speaker Change #151: Pushing up to the fourth quarter and what do you think that impact will have.

Speaker Change #151: On on your revenue ramp well upon approval PMA Jorge how are you.

Steve Lisi: Okay. It's still the second half, Matt. I wish it was the third quarter until the fourth quarter of the calendar year, but it's still in the second half. And you know how FDA takes their time, and I don't think it's going to impact. I think that the guidance that we have given, even the prior guidance and the current guidance, doesn't include any impact from cardiac surgery on the label in fiscal 25. Certainly, for fiscal 26, it's something that we anticipate having in the bag. But again, this is the process with FDA. That's why we said second half.

Speaker Change #151: That's great. Okay, It's still second half, Matt I wish it was the third quarter to the fourth quarter of the calendar year, but it's still in the second half and you know Fda's takes their time and I don't think it's going to impact I think that the guidance that we we have given even the prior guidance and the current guidance doesn't include any impact from cardiac.

Steve Leasey: I think that the guidance that we have given, even the prior guidance and the current guidance, doesn't include any impact from cardiac, cardiac surgery on the label in fiscal 25. Certainly, for fiscal 26, it's something that we anticipate having in the back. But again, this is the process with FDA. That's why we said second half, you know, it would have been great if it was the September October, you know, September October will be great. Maybe it's going to be October, November now, kind of timeframe. We'll see. And there's no guarantees of that, Matt. As you know, I mean, this is just based on our most recent communications with FDA.

Matthew Lee Kaplan: Cardiac surgery on label in fiscal 'twenty, five certainly for fiscal 'twenty six it's something that we anticipate having in the back.

Speaker Change #153: But again this is the process with F D a.

Speaker Change #154: That's why we said second half would have been great. If it was September October.

Steve Lisi: You know, it would have been great if it was a September-October kind of timeframe, you know, or, you know, September-October would have been great. Maybe it's going to be an October-November kind of timeframe now. We'll see. And there are no guarantees of that, Matt, as you know. I mean, this is just based on our most recent communications with FDA. This seems like the right time, but you know, there can be more questions. This is not a drug review, as you know.

Speaker Change #155: September October would be great. Maybe it's gonna be October November now I'm kind of timeframe, we'll see and there is no guarantees of that Matt as you know I mean this is just based on our most recent communications with FDA. This seems like the timing, but you know there can be more questions. This is not a drug review as you know it's not a there's no paducah date right there's no.

Steve Leasey: This seems like the timing. But, you know, there can be more questions. This is not a drug review. As you know, it's not there's no pedophadate. Right. There's no exact date. This is on the medical device side. So, you know, it’s never a hard target. It's always a moving target. And again, based on what we know from the FDA, it should be the December quarter where we get a decision. But again, I'll update you if that changes. Thanks, thanks.

Steve Lisi: It's not a PDUFA date, right? There's no exact date. This is on the medical device side. So, you know, it's never a hard target. It's always a moving target. And again, based on what we know from FDA, it should be the December quarter where we get a decision. But again, I'll update you if that changes. Bye. Thanks.

Speaker Change #155: Exact date this is a medical device side, so you know it.

Speaker Change #155: It's never a hard target, it's always a moving target and again based on what we know from F. D. A it should be the December quarter, where we get a decision, but again I'll update you if that changes.

Speaker Change #155: Yeah.

Okay. Thanks, Steve.

Matt Kaplan: Thanks, Matt. Thank you.

Speaker Change #155: Thanks, Matt.

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.

Thank you.

Operator: At this time, we are showing no further questions in the queue. And this concludes your question-and-answer session.

Speaker Change #155: At this time, we're 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.

Steve Leasey: I would now like to turn the call back over to Steve Leasey for any closing remarks. I want to thank everybody for listening in. We're pretty excited about the point that we're at right now. We should happen a little sooner. But sometimes you got to wait for the good stuff. All right. Look forward to speaking to you all in the future.

Steve Lisi: I want to thank everybody for listening in. We're pretty excited about the point that we're at right now. I wish it had happened a little sooner, but sometimes you just have to wait for the good stuff. All right, I look forward to speaking to you all in the future.

Steve Lisi: I want to thank everybody for listening in.

Steve Lisi: We're we're pretty excited about the point that we're at right now I wish it happened a little sooner, but sometimes you've got to wait for the good stuff.

Steve Lisi: Alright look forward to speaking to you all in the future.

Steve Lisi: Okay.

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

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

Speaker Change #156: This concludes today's teleconference. You may disconnect your lines at this time.

Speaker Change #156: For your participation.

unknown: [inaudible]

Speaker Change #156: Uh-huh.

Speaker Change #156: Hum.

Speaker Change #156: Hum.

Speaker Change #156: Hum.

Speaker Change #156: [music].

Speaker Change #156: Hum.

Speaker Change #156: [music].

Speaker Change #156: Hum.

Hmm.

Speaker Change #156: [music].

Speaker Change #156: Yeah.

Speaker Change #156: [music].

Okay.

Speaker Change #156: [music].

Speaker Change #156: Hmm.