All right. Good afternoon, everyone. Happy to be with you today. I'm Jason Bednar. I cover MedTech here at Piper. Next fireside chat, and the last one of the day for us, is with Beyond Air. Very happy to have with us today Beyond Air CEO Steve Lisi. Thanks a lot for joining us again this year, Steve. Appreciate it. Thanks for having me. So we'll get right into Q&A. You know, Steve, a lot that's unfolded with your company and your story, since we were sitting here a year ago, right? Some good, also some challenges. I'm sure we'll talk about everything here, but maybe just to start the conversation, take us through what's happened here the past several months. And, I know you've even got recent news here just within the last week. I don't want to steal your thunder, but, I'll let you fire away. Sure. So, you know, we, you know, we restructured our debt, which was very helpful, and we raised some equity, gave us a little cash on the balance sheet, so that, that's, that's the major thing that happened a couple of months ago, so in our debt restructure, we're able to push out payments, you know, for two years, so we avoided $12 million in payments over the next two years by restructuring and bringing in, new debt players, so we'll start paying that debt, in, I think the first payment's like end of October, two years from now in 2026, and it's going to be based off of, royalty on net sales, so this way we'll be able to afford to pay what we can from the royalty. Right. The royalty is more than the interest rate, then, we'll be paying off principal. So hopefully we can do that for the investors. Great. Yeah, I mean, you know, maybe prompt you. What last week here we've had some good, some good updates, some good wins. You know, again, like I said. Yeah. I don't want to steal your thunder. You want to talk about what you probably want to talk about. So, let's have at it. Yeah. I mean, CE Mark just came out the other day. That's, it's been a long haul. Yeah. I think a lot of medical device companies dealing with Europe over the last few years have had some trouble with the new MDR over there. Yeah, they have. So I think there's going to be some adjustments to that possibly, which sometimes change is good. Right. But you know, we're very happy to have CE Mark. This will trigger a $1 million milestone payment from our partner in Southeast Asia. Most of the countries there require CE Mark. Some don't, so we're moving regulatory pathway already with some of them that only require FDA approval. We anticipate having some shipments in the first half of next year to our partner there. We also have a partner that we signed up about a month ago. Perfect timing. They're an international device distributor company, so they will manage our partnerships and future partnerships around the world. As you know, having a team in-house is fine, but our team is small and it's easier to use these guys than to, you know, build our own team out. So we anticipate over the next 6 to 12 months to partner in, you know, I would say a couple of dozen countries. We have our first partner in 10 countries. So we anticipate having, you know, a good piece of Europe and some other parts of the world partnered up in 2025. Like in incrementals, you said six to 12. Is that in the next year? Yeah. 2025. Yeah. Okay. Yeah. But incremental the way the 10 or so you're. Oh, yeah, yeah, yeah. Incremental. Absolutely. Making sure. Yeah. Yeah, yeah, yeah, yeah, yeah, yeah. Yeah, yeah. Okay. All right. Incremental. No, no. I'm good. When you, when you ship out product, assuming this is going out both, like how do you recognize the revenue? Do you recognize it upon shipment or? So there's two different structures that people are talking to us about right now. One of them is a royalty structure. So that's with our current partner. So we would recognize revenues on sales of our products. It's a cost plus. Okay. Not huge, but still cost plus, and then we would end up recognizing the royalties as they record their net sales, so in that way, I think it's a more fair partnership for both sides, but we would see some of that revenue is coming, you know, more impactful to our bottom line, you know, in the later years, but certainly more profitable for us in the long run, and then the other model is probably more what you're used to and what most people are used to is just straight distribution. So, o f course, that is where you recognize right up front. So we're selling our product at a much higher price, to the distributor, and then they will turn around and sell it for whatever they'd like in their country a nd we would recognize that, upfront. Okay, but current model is the former, maybe models to come could be the latter? I believe more of the latter and partnerships to come. Okay. Got it. That's great. Maybe take us through, you know, some of the negotiations you're seeing right now with hospitals or potential customers. Your customer base is growing, which is good. Yes. There's evidence of that and the utilization's rising, you know, but it seems like the business is finally accelerating. But again, take us through some of how, you know, those negotiations have gone just maybe in the last few months where we possibly have seen this inflection. Yeah. So, you know, when we got the product approved, there were, you know, it wasn't perfect. I mean, it's our first generation. And, you know, it took time for us to get these upgrades through the FDA. It was a frustrating process. But again, I think FDA has finally, you know, recently gotten to a point where they're able to handle the volume, at least the division we deal with. But, you know, I know people don't want to hear about the pandemic anymore. No one does. But there's still things, especially in supply chain and still a little bit with the FDA. But I think they're almost done with it. I think FDA's kind of doing well now. But back then, you know, two years ago, it was difficult to get things through. They were still short-staffed. So our upgrades came through about a year ago, a little longer. But then as a Class III medical device to implement all of these things, it took some time. You know, there's no cutting corners. There's lots of paperwork and training and testing to do it before you get out. So it was really May of this year that the upgraded system was hitting hospitals and people were starting to get very comfortable with it. So we've expanded our customer base significantly since then, as you've seen the last, you know, two quarters. Yep. You know, this is giving us much, I would say, quicker negotiations. Nothing really goes quick with hospitals, but It's starting to move a little bit quicker and people are much more comfortable with the reliability of the system, and we've been out over two years now, so no one looks at us as a new company, so they're not, you know, we don't get any questions about, you know, how good is your service? Are you going to be around next year? We don't get those questions anymore, so I think that this last six months has really been because the system is now running very smoothly, very minor issues, and again, you could have a proven medical device this complex out there for 20 years. You're still going to have things break, you know. You know, bad wire, your sensor fails, you know, these things happen. We're now at a rate of those things happening more in line with a, you know, a product that's been out there for a while, so it took time. I think hospitals are much more comfortable and we're starting to move. We're getting negotiations that are going well. I think the issue with us getting these larger hospitals is that they require transportation and ambulances, helicopters, and airplanes, so our first system that's out there is not equipped. We're not approved for that, but you know, our next generation product will be. We are having some hospitals that can come up with solutions for that that don't use our system, so we have a few that are using us and have something else in place for the requirements in the ambulance. Okay. Yeah. I do want to come back to the next-gen system because that could be, you know, really help, you know, put this story on fire, you know, after that launches, right? But maybe to summarize, you know, you've seen that sales cycle shorten as you've addressed the upgrades and also maybe call it. I don't want to call them product quality issues, but that it's more or less what they were, right? Yeah. I mean, look, you know, you build something and, you know, you can test it all you want in-house, but you don't really know until you put it out there, right? Yeah. People will use it in different ways. You know, there were a few things that the respiratory departments of hospitals kind of, you know, are a little bit different now than they were pre-pandemic. Sure. So, you know, our device had a few things that we wouldn't have done if we had known what was coming, right? So we had to make certain adjustments, which they're all done now. So we're pretty happy. And, you know, to be honest, the quality of the product right now gives us a lot of confidence to go overseas. I mean, we signed our partner over a year ago and we weren't pushing because we wanted to wait for these upgrades, you know, to ship these overseas and have a problem after shipping back. I mean, that's just going to be too expensive. Yeah. Right? So now we have high confidence in the quality. So we're going to be pushing hard internationally as well. We don't see machines coming back very often, unless they're coming in for service because they've used so many hours that it just needs to tune up. Yeah. Okay. The other big change that's happened commercially is you brought in a new Chief Commercial Officer. Yep. Right. David Webster joined over the summer. You know, what's changed with the strategy and/or the commercial goals under David? I mean, the goals are the same. Okay. We need to get market share and we need to get. Sell. Yeah. We need to sell. We need to get you know we had a strategy prior and the previous team wasn't really executing you know the strategy, and David came in and one of the things we loved about him is that his vision you know I don't want to say it overlapped because he brought some things that we weren't aware of. He's got some things that you know you need to have his experience to know and I don't have it, but a lot of things he said were in line with what myself and the rest of my team believed, so we were very happy with that, and you know our goals are the same. He just has the ability to drive the team and get them to do it and understands how to deal with it. And he's brought in a couple of other things. I mean, we got this hospital in Guam that we never would have gotten without David. That's all him. And it opens up doors to the military and to VA, and he's brought that to us. I think his strategy around how to deal with GPOs is better than what we had before. He's got what we were looking for. You know, we didn't understand why we couldn't get traction there. And he comes in. He's like, "This is what you need to do." I mean, it's for him. For him, it's so easy because that's what he does. And for the rest of us, you know, we're like, "How do you do it?". So, he's brought this expertise in that, you know, we need it. And it's a little bit harder, I think, than the people that we had previously thought. And, you know, I'm not a chief commercial officer, so maybe I didn't understand it very well, but we bring this guy in and he's got it all down. And it just, unfortunately, it's the hospital business, so it doesn't happen overnight. You know, we don't just start shipping pills out to distributors, right? This is different. But he's definitely gotten, you know, we've changed some of the people on the team. He's brought in some people from his past that are very good. We have, you know, our marketing team is way better. I don't know if anybody follows us on social media, but you should. LinkedIn is probably the best place, I think. But, you know, there's a lot, a lot going on there. You know, respiratory therapists are not my age. Some of them are, but a lot of them are younger. And that's what they look at, right? They're not doing it the old traditional ways that we used to back in the day. So to meet people and to get them to understand what we're doing is important. So I think our marketing strategy that David's brought in has been very helpful as well to get more awareness. I mean, we were just at the respiratory conference in Orlando. And it's surprising. This is our third time being there with the product approved. And some people still didn't understand what our product did. And that's frustrating for me because, you know, I'm out there screaming from the rooftops what's going on, but I'm not the guy talking to respiratory therapists in hospitals. But I think we've done a much better job of getting people to truly understand what our product does. And that's what David brought. He just brought structure and he brought a consistent message and he understood how to work with some of the channels that we just weren't doing a good job with. Okay. All right. That's really helpful. Can you talk about the state of the commercial organization since you've had some leadership turnover with it, with David? Is it, I guess, how would you characterize it today, maybe relative to six months ago? 10x better. Okay. Not 100, but 10. Okay. Got it. All right. Maybe let's talk about some of the relationships you've formed here. You have the relationship with Trilomed. Maybe what's the importance here? And I don't mean to, like, I'm not trying to, you know, say it's not important, just, you know, but help me out. Like what, why should investors care? That's probably the better way to say it about Trilomed. So you're not going to do much business with the Department of Defense or the VA without a veteran-owned business representing you. Right. So that's like your gateway to your door opener. That's simple. Yeah. That's simple, and, you know, the good thing about these guys is that they don't need transportation, ground and air transport. Yeah. Fits right in for you. And that's a frustration of mine for my old team that they weren't targeting this and weren't doing the right job, right? So David comes in, I tell him this is a frustration because that's easy. Now, easy, yes, for him, but it takes time. It's, it's not that easy for the rest of us. It's, you know, it's not easy. Yeah. It does take time and it takes skill and knowledge to understand and relationships to be able to do it the right way. And he brought that. Yeah. What about Vizient? Has this been a valuable partnership? And if we're looking out two to three years from now, what does the success look like with Vizient? So we have not optimized that partnership. My previous team did not do a good job. It's one of the reasons they're not here, right? Okay. David's come in. He's, I mean, again, his strategy on how to deal with Vizient and other GPOs, you know, makes a lot more sense to myself and my other manager, the rest of my management team and board. We believe his strategy is good. I like how he's doing it. And he's brought in some outside consultants to help with this. Again, this is all, you know, relationships and understanding the intricacies of doing this type of business with GPOs. And that's not something us, you know, me and ex-Wall Street guy, you know. It's not something we fully understand, right? It's very detailed. So I'm very happy with what David's brought. And I think that, you know, we'll see some impact from Vizient next year that I would have thought we would have seen this year. Okay. I think it's just delayed because we didn't have the right people in place. Next year being fiscal 2026? Oh, 20. Or. Sorry, calendar 25. My apologies. Okay. No, I. Fiscal 2026 is almost the same thing. I know. I know. Okay. Can we talk about contract pricing a bit? You know, I know not, not something you specifically disclose. We can try to back into it based on, you know, metrics we have, right? It seems like across the industry, not with your business, but across the industry, pricing has moved lower. Not your own doing. Maybe your presence. It has. Driving competition to lower pricing. Do you maybe just give us a sense of what you, what you see going on in the market as you look out over the competitive landscape that's out there? Yeah, so we talked about this early in the launch and before launch. This was a $600 million market, when Mallinckrodt was a monopoly right before the pandemic hit. It was during the pandemic that nitric oxide volume usage went up significantly for a year or so. Yeah. Roughly, and the competition came in, you know, two players came in in 2019, right before. So that was where the market was. And we've always said we thought the pricing would come down at least 50%. So we used to talk about this being a $300 million market. I think it's kind of a little higher. I think it's probably closer to 350. And I think that's because some of the volume stayed up a little bit from the pandemic. Not much, but enough to maybe give it a little bump. I also think that, you know, nebulized Treprostinil is starting to lose its luster. Gotcha. But it's just not something that people are happy with. They were happy with it because it was much cheaper than the price of nitric oxide when Mallinckrodt was a monopoly. And now the prices have come down and the simplicity of our system. When they see our system, they're like, "Are you kidding? Why am I using this stuff?" So look, you know, we haven't made wholesale changes, but in the last six months, we've definitely seen hospitals that don't use nitric at all switch to us from Treprostinil. Small numbers, but interesting trend. We've seen some bigger hospitals where they're using it in part of the hospital. And when they see our system come in, they're like, "Oh, we need that." I'm sorry, but we're taking that machine out of your department. It's in our department and we're not using Treprostinil anymore. So I just don't know. There's no way to track how big that volume is. Treprostinil in place of nitric, where nitric would be used. We've tried to find that number. If someone's got it, good for them. I don't know that number. So it could be increasing volumes over the next few years by 5% or 20% or what? I have no idea. But I think that's offsetting a little bit of where we thought this market would be, which was around $300 million. But I think that and what I mentioned before is probably keeping up close to $350 million. Okay. At the moment. Do you think contract pricing, just staying on that topic real quick, do you think that's bottomed? And then maybe we can start looping in Next Gen System. How does the Next Gen System affect contract pricing or does it affect more so your contract win rate? Oh, it definitely affects the win rate. That's for sure. I know. That's easy. Yep. For sure. Yeah. You know, I don't know how it'll be priced. I'm not sure. Okay. I do know it's more profitable than our first machine for us. Much better gross margins. So, you know, I don't think there's a need to raise the price much. Obviously we're a for-profit business, but I don't know. It won't be cheaper. I guarantee you that. That I'm sure. Okay? Okay. So, you know, but that will open up a lot of doors, obviously, that system. All right. When we think about guidance here real quick. There is none. I know. So my question is, when's it coming back? So I'm sure that I'll be giving guidance in June on our fiscal year end. Okay. For fiscal 2026? Correct. Okay. Got it. So we'll have. If I can do it sooner, I will, but that would, I don't think I'll do it in February. Okay. Yeah. That makes sense. You know, if I have some visibility, then I'll do it. But again, I've been telling people that you can count on June. Okay. All right. So Next Gen System, I definitely want to have some time here to talk about this. So it's going to have transport capabilities. It'll address effectively the only competitive advantage that some of the other players have over Beyond Air and LungFit at the moment. Correct? Correct. Is it right to characterize, and I don't like using this word because I feel like it's overused, but is it right to characterize the next-generation system as a game changer? It's been called that. Okay. Just as recently as two weeks ago. Okay. Who's that? Who's, who's calling it game changer? So we unveiled it at this meeting. Yeah. The respiratory conference in Orlando, and we showed it to certain people, right? We have a second floor to our booth to keep some privacy. And. Yeah. There was, I don't know, it was 100, 100 different people up there, mostly from hospitals, and you know, they loved it. They stayed up there, asked questions. We had groups of people up there, two, three different hospital systems at a time up there. People heard about it. They got word and they're like, "Can we see it? Can we see it? Can we see it?" and you know, the feedback was fantastic. You know, really some of the features on it, which I'm not going to discuss here, but some of the features on it and that are different from our first one, not just the size and the fact that it has transport, but a couple of other things. These people were just like, you know, "When, when can I get it?" Like one guy who I know for a while said, "Look, we start Gen One next year. Is it going to be ready?" I'm like, "I can't guarantee anything. Call FDA and ask them." Right? But he's just, you know, like, "Yeah, I have to have it." And this is what they want. I'd like them to take my first system and wait till, not wait for the second one, but some guys can't do it, right? They need transport. So, b ut other hospitals are interested in trying our first one out, to kind of get in line to get our second one before everybody else. But if you're a current customer, you're going to get first crack at the Next Generation System. Yeah. If you're not, you know, you're going to be getting in line. That goes into my next question or a couple of questions actually. So what are the milestones we should have in mind around the Next Gen System as far as, you know, how you're at least internally planning for approval and launch? So what we're saying is, the March quarter coming up, we will submit it to FDA. So that's next quarter. It's a PMA supplement, right? It's not a new product. It's not a new PMA. This is a PMA supplement on our existing approved product. So we're hoping it won't take very long for approval, but, you know, people have said 180 days and I told them if you think it's going to get approved in 180 days, you're wrong. It's just not going to happen. You know, I don't know if maybe it's 270, maybe it's 360. I don't know. Your guess is as good as mine, right? Okay. So what we have said is that don't put any impact from this in fiscal 2026. Okay. It's reasonable. This will be April 1, 2026 starts our fiscal 27. That year will definitely have impact from this system. How much impact depends on the date of approval. If I get approved in October of next year, it's going to have a big impact. If I get approved in, you know, April of 2026, I, you know, I've missed the first quarter for sure on impact, right? So I just don't know yet, and you know, perhaps when we report in June, we'll have a better understanding of how, where FDA stands on what they think of it. I just don't know. I don't know what they'll tell us by then or if anything by then. So that's why I feel like, you know, it's tough to give guidance prior. How do you see the upgrade process working with your current fleet that's going to be in the field? You kind of touched on it. They're going to have first crack at it, but are there any other mechanics we should have in mind, you know, around the upgrade process that could be out there? Is it pretty simple and smooth or? Easy. Okay. It's just system trade-off? Our product, you know, there's no special storage requirements. There's no special handling. There's no setting up in the hospital for, you know, moving cylinders around, for example. You don't have any of that. Yeah. You just drop it in there and you're good to go. And if you want to swap the systems out, it's nothing. There's even, you know, my guys are interesting. They said to me like, "This is going to be minimal training going from the old system to the new system. The only training you're going to do is to train them on the new features of the Next Gen System that are better than the original one. That's it. It's not, you know, you have our big competitor Mallinckrodt swapping in a new cylinder-based system for the old cylinder-based system. It's a massive change. These are two completely different systems. Ours, you know, we put them side to side for people to see, and they're like, "This is so simple." Right? So this is the user interfaces are very similar, right? The ports are exactly the same. The filter is exactly the same. So it really shouldn't cause a pause in the market like. No. Customers saying, "Hey, I'm just going to wait for the new system because the swap out and the usability is so easy. It's so easy. Okay. It's so simple. All right. Last, last, you know, we're coming up on time, but one last question, maybe combo question. Just I want to squeeze a few last few in. If you can maybe offer perspective on how you see Beyond Air looking if we take a view two to three years out, is LungFit the market leader at that time? And, you know, the last one as a, you know, analyst, of course, I got to ask, you know, Street's modeling $14 million, I think $43 million in revenue or so in the next couple of fiscal years. Do those numbers feel right? So I'll let you go. All right, so 14 in fiscal 2026 and then. 42. 42 in fiscal 27. Yeah. Yeah. So I mean, look, I’m not going to say anything about those numbers. I’m not, they don’t make me uncomfortable. I mean. Okay. The 27 number would obviously depend on timing of the Gen 2 approval, right? Of course. That's fair. Yep. So we will not be the market leader in two years. That's too soon. Yep. Three years, again, just depends on when I get my Gen 2 because the only thing that would stop us from becoming the market leader with Gen 2 is manufacturing capacity in my mind, in the team's mind. And, you know, our, our manufacturer for Gen 2, again, we're not flush with cash, so I won't be building up massive inventories before we launch. But a s soon as we get approval, we'll be maxing out the manufacturing capacity there. And it will be as quick as we can make them.n So again, remember, this is a global product. So Gen 2 approval in the U.S. first. We have not submitted it, and I don't even know when we'd submit it outside the United States because the manufacturing capacity, if it was global, we'd be, it would take a lot of time. So It'll be our first generation machine ex-U.S. for a couple of years. And Gen 2 would be specifically for the U.S. for the first few years. Okay. Great. Very comprehensive. Really appreciate it. I know we are out of time. So we'll, we'll leave it there. Steve, thanks as always for joining us at our conference. Thanks for having me. Thanks to everyone in the room for joining us as well. Really appreciate it. Thanks, everybody. All right.