Beyond Air, Inc.

Good afternoon and welcome everyone to the Beyond Air financial results call for the fiscal quarter ended September 30, 2024. At this time, participants are in a listen-only mode. A question and answer session will follow the formal presentation. And now, I would like to turn the call over to Corey Davis, LifeSci Advisors. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us. Today, we issued a press release announcing the operational highlights and financial results for Beyond Air's second quarter of fiscal year 2025. A copy of this press release can be found on our website, www.beyondair.net, under the News and Events section. Before we begin, I'd like to remind everyone that we will be making comments and various remarks about future expectations, plans, and prospects, which constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Beyond Air cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. We encourage everyone to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Form 10-K and Form 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Additionally, this conference call is being recorded and will be available for audio rebroadcast on our website, beyondair.net. Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, November 11, 2024. Beyond Air undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this call. With that, I'll turn the call over to Steve Lisi, Chairman and Executive Officer of Beyond Air.

Go ahead, Steve. Thanks, Corey, and good afternoon to everyone joining us. With me here today is Doug Larson, our Chief Financial Officer. I'm excited to report that the Beyond Air team is successfully executing our commercial strategy and building positive momentum. As a result, during the quarter ended September 30th, 2024, we increased our total number of hospital clients by over 60%. This is a tremendous signal to our team that the recent improvements we implemented in our marketing and customer education programs are striking the right tone with our customer base. Also, we are pleased with how our LungFit PH device is operating following the upgrades we made about six months ago. As all of you may recall, our new chief commercial officer joined us in July, and we are very pleased that the strategic initiatives put in place are having an immediate impact on customer receptivity, which is starting to flow through the channel in the form of contract negotiations. We expect this success will continue to drive accelerated top line revenue growth over the following quarters as our recent sales and marketing initiatives mature. In addition, we announced several partnerships, including with healthcare links a renowned healthcare advisory and contracting firm that works with GPOs and IDNs, and Trillimate to help us engage with and distribute to the military and veterans administration hospitals. And we're teaming up with business Asia consultants to provide lung food pH to hospitals in Europe, South America, the Asia Pacific region, and the Gulf Coast region, where many hospitals are unable to obtain nitric oxide supply or use NO due to the difficulties associated with legacy cylinder systems that can't generate NO from ambient air like LungFit PH. We are also implementing additional strategic initiatives over the next few months that are expected to build on our momentum that will further separate us from the competition, so stay tuned. To best position ourselves for success, we recently announced three separate financial agreements that are expected to extend our cash runway. First, we completed a private placement equity offering for $20.6 million with a select group of healthcare-focused investment funds and company insiders. Second, we reached an agreement with Avenue Capital to extinguish their senior secured term loan for a one-time payment of $17.85 million. This agreement eliminates payments that would have been made from October 1st, 2024 through June 30th, 2026 of approximately $12 million. Avenue Capital also participated in the private placement equity transaction I just mentioned. Third, we entered into an $11.5 million royalty funding agreement led by certain Beyond Air board members. This debt will carry a 15% interest rate, with 12% being payment in kind until the September 2026 quarter. Actual cash payments for all interest and principal will commence after the September 2026 quarter and will be determined based on an 8% royalty rate on sales of LungFit PH. These royalty payments will continue only until principal and interest are paid off. The outcome of these financial agreements, combined with the cost reduction measures taken earlier this year and anticipated revenues, is that we expect to have sufficient cash for about 18 months as we ramp up our global commercial execution plan. Before turning it over to Doug, I want to touch on some growth drivers we are expecting in the relative near term. Our PMA supplement for the expansion of the LungFit pH label to include cardiac surgery was accepted and is under review by the FDA. As a reminder, a PMA supplement is a submission for when there is a change to an already PMA-approved medical device. While there is no firm date for FDA to complete its review, we can say that as of today, we have answered all questions posed by FDA and we await their feedback. We will work with FDA to provide the quickest timeline possible but cannot give a specific date for an FDA decision. As you may recall, there are no nitric oxide products currently approved for cardiac surgery in the United States. So, if granted, this would represent the first formal FDA approval among any of the current players in the market. B.E. Mark, the regulatory changes in the EU for medical devices have been difficult for everyone. However, we believe that we will receive a final answer before the end of this calendar year. I know the frustration from investors on this topic, but from my view, the Beyond Air team's performance was a lesson in patience, perseverance, and being an expert at your craft. Before the end of the March 2025 quarter, we will file a PMA supplement to the FDA for our next generation lung fit pH system. We look forward to demonstrating this system next week at the AARC annual meeting in Orlando for those attending our private meetings. We believe and we expect those of you who attend AARC and see for yourselves will agree that this superior system will be rapidly adopted in the global nitric oxide market. Moreover, It can provide NO to areas of the world where cylinders just can't be used, and this will result in lives saved. Turning to Beyond Cancer, they are awaiting regulatory approval in Israel for their UNO program in combination with anti-PD-1 therapy in late-stage cancer patients, which remains an area of high unmet patient need. Just the other day at the Society for Immunotherapy of Cancer meeting, compelling survival data in both rats and mice were presented. We're encouraged to see that the amount of gas used was less than 10% of the amount of gas used in the phase 1A UNO monotherapy human study where an acceptable safety profile was demonstrated. This lower volume administration may be even safer and allow for tumors to be treated in more areas of the body than just cutaneous and near cutaneous. I encourage all of you to visit the Beyond Cancer website and get better educated as 2025 should be transformational for this potentially groundbreaking therapy for those suffering from solid tumors. I am also pleased with the advances that Neuronos, our subsidiary focused on therapies for autism spectrum disorders, is making. Great early stage work continues at Neuronos, and I encourage you all to visit their website to get a better understanding of what is to come over the next 12 to 24 months. In closing, let me summarize my comments on LungFit pH sales by saying, Our commercial operations in the U.S. turned a page about six months ago, and we are energized by the steady flow of high-quality engagements with potential new customers and by the extremely positive feedback from existing U.S. customers. In addition, the interest we are seeing outside the U.S. is quickly gaining traction since our system upgrade, and we anticipate signing new ex-U.S. agreements over the next six to 12 months and to begin shipping systems overseas in the first half of calendar 2025. In addition, we have several upcoming regulatory and product development milestones that are expected to drive increased growth. When we take all of these factors together, I hope you see why we are so excited about what we are planning over the next year. Now, I will turn it over to our CFO, Doug Larson.