Good morning, and welcome, everyone, to Beyond Air Financial Results Call for the Fiscal Quarter Ended December 31, 2025. [Operator Instructions] And now I'd like to turn the call over to Corey Davis of LifeSci Advisors. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us. Earlier today, we issued a press release announcing the operational highlights and financial results for Beyond Air's third quarter of fiscal 2026 ended December 31, 2025. A copy of this press release can be found on our website, beyondair.net, under the News & Events section. Before we begin, I would like to remind everyone that we will be making comments and various remarks about future expectations, plans and prospects, which constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Beyond Air cautions that these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated. We encourage everyone to review the company's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Form 10-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 the live broadcast, February 13, 2026. 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, Chief Executive Officer of Beyond Air. Steve, go ahead.

Thanks, Corey, and good morning to everyone. With me here today is Dan Moorhead, our new Chief Financial Officer. It has been a pleasure working with Dan over the past several months. He brings a proven track record as a proactive CFO with demonstrated success supporting commercial organizations through periods of rapid growth. I also look forward to his active engagement with the investment community as he becomes fully integrated into the role. Also joining us today is Bob Goodman, our Chief Commercial Officer. Bob assumed the role in October after previously joining Beyond Air as a Board member back in June. Let me start my prepared remarks by saying just how pleased I am to speak with you today and provide an update on what has been a productive and meaningful period for our company. We have achieved several significant milestones, strengthened our balance sheet to support continued commercial execution and made the strategic decision to sell our NeuroNOS subsidiary in exchange for equity in the acquiring company and up to $32.5 million in upfront development and commercial milestone payments. We believe these recent events have strengthened our ability to execute our commercial strategy and create long-term value for our shareholders. Let me walk you through these updates in greater detail. Starting with our core business. Revenue in the fiscal quarter increased 105% year-over-year to $2.2 million. This represents continued progress as we scale adoption and expand awareness of LungFit PH in clinical settings. We now support more than 45 hospitals across the United States and internationally that have adopted our first-generation LungFit PH system. Customer feedback has been encouraging with retention exceeding 90% and more than half of customers under multiyear agreements. We believe this installed base positions us well to support continued revenue growth from our first-generation system while preparing for the anticipated FDA decision for our second-generation system. Our commercial team continues to refine its targeting strategy, prioritizing hospitals most likely to adopt a LungFit PH today and expand usage following approval of the second-generation system, which we expect to receive before the end of calendar 2026, subject to regulatory review and clearance. We are making steady progress building relationships with clinicians, administrators and health care systems. Our current objective is to continue expanding Gen 1 system utilization through calendar 2026 in the U.S. and internationally, while preparing for the potential launch of our second-generation system once approved. As previously discussed, Gen II system is designed to offer reduced size and weight, simplified operation, extended service intervals, improved backup system functionality and very importantly, compatibility with both air and ground transport. We believe these enhancements will expand the addressable market relative to Gen I and support broader adoption over time. At this point, I'm going to pass the call over to Bob Goodman, who has made excellent progress since taking the reins as Chief Commercial Officer about 4 months ago. Bob?

Thanks, Steve. And let me begin by saying I share Steve's enthusiasm about the opportunities ahead for Beyond Air. I as well believe that LungFit PH is the best-in-class nitric oxide solution globally. Feedback from U.S. customers and international partners on system performance and customer support have been extremely positive, providing a solid foundation for continuous growth. We have national group purchasing organization agreements with Premier and Vizient, which together provide access to nearly 3,000 hospitals across the United States. As awareness of LungFit PH increases, we expect additional opportunities at the GPO and integrated delivery network level in 2026. As previously announced, we have been working with TrillaMed to support our engagements with the federal health care systems. I'm pleased to announce that together with this valued partner, we completed the first sale of LungFit PH to a VA Medical Center. This initial commercial sale to the VA hospital system establishes an important foothold, opening potential pathways for future orders and broader adoption across the system and provides access to the largest health care network in the United States. Internationally, we continue to see strong engagement from our distribution partners. Over the past several months, we've expanded our global LungFit PH distribution network with new agreements in Canada, Germany, Brazil, Austria, the Netherlands and Sri Lanka, bringing total international coverage to 40 countries. As we broaden our global footprint, we are laying the groundwork for long-term growth and positioning Beyond Air to serve a significantly larger addressable market. It is important to note that we are live in a few hospitals with LungFit PH and have already begun to see repeat orders for accessories from several countries. Taken together, these commercial, operational and strategic developments give me confidence in the trajectory of the business. What also gives me confidence are the people at Beyond Air. The dedication of this team is second to none, and I've been in this business for decades. This includes all the aspects of the team from clinical support from marketing to customer service to engineering, to finance, to regulatory to quality, et cetera. Our people are fully engaged and dedicated to the vision of improving the lives of patients and medical staff with LungFit PH. I also want to emphasize the advantages that Steve mentioned earlier on our second-generation system. From my time spent with customers and potential customers in the United States, I believe that the Gen 2 system addresses everything on the wish list from clinicians and hospitals. I'm extremely confident that I, along with the team here, will execute on our vision of becoming the global nitric oxide leader. Now I'll turn things back over to Steve.

Thanks, Bob. Turning to Beyond Cancer. We recently announced that our abstract was selected for the 2026 AACR Annual Meeting, which is taking place from April 17 to 22 in San Diego, California. As previously announced, the study enrolled 10 subjects at doses of 25,000 and 50,000 parts per million of nitric oxide gas delivered over 5 minutes intratumorally. These patients all had metastatic disease and were heavily pretreated. All subjects had a life expectancy of less than 12 months. We have already reported that the safety profile observed to date is acceptable. The data presented at AACR will include updated overall survival data for which median survival has not yet been reached as of October 1, 2025. We remain dedicated to pursuing the Phase Ib combination study with anti-PD-1 therapy, and we will communicate more details as we progress. With respect to NeuroNOS, our neurology-focused subsidiary, on January 13, 2026, XTL Biopharmaceuticals announced a binding letter of intent to acquire NeuroNOS in exchange for Beyond Air's approximately 85% ownership interest. Consideration includes a 19.9% stake in XTL, $1 million in cash and milestone-based contingent payments totaling up to $31.5 million. Following closing, NeuroNOS is expected to serve as XTL's flagship platform for autism and neuro-oncology development. We believe this agreement provides the potential to create meaningful value for our shareholders by enabling NeuroNOS' pipeline to advance with dedicated focus and funding through XTL Bio. We will not provide additional commentary beyond public disclosures while the transaction remains pending. To conclude, the $5 million financing completed in January 2026, together with the previously announced promissory note and equity line of credit for up to $32 million with Streeterville Capital that we announced in November 2025, provide resources to support commercial execution and readiness for the second-generation LungFit PH system. We remain focused on disciplined execution and delivering advanced nitric oxide solutions to clinicians and patients around the world. Now I will turn it over to our CFO, Dan Moorhead.

Thanks, Steve, and good morning, everyone. I'm excited to join my first call since being appointed CFO about 7 weeks ago. I still have a lot to learn but I'm incredibly impressed by what the team has achieved, not just over the past year but even within the past few months. The progress has been extraordinary, and I see a bright future ahead as the team continues to execute on our growth strategy. Our financial results for the third quarter of fiscal year 2026, which ended December 31, 2025, are as follows: Revenue for the fiscal quarter ended December 31, 2025, increased 105% to $2.2 million compared with $1.1 million for the fiscal quarter ended December 31, 2024. On a sequential basis, this represents a 21% increase compared with last quarter. Gross profit increased to $300,000 for fiscal third quarter 2026 compared to a gross loss of $200,000 for the same period last year and a gross loss of $300,000 in the prior quarter. Turning to operating expenses. We continue to see reductions across SG&A, R&D and in our supply chain as a result of cost reduction initiatives taken in the past 12 months as well as the decrease in R&D costs related to our Gen II device, which are mostly behind us since the PMA was filed with the FDA. Total operating expenses for the fiscal third quarter of 2026 were reduced to approximately $6.9 million, which is down from $10.7 million for the same period last year. This translates to a 36% reduction year-over-year and a greater than 60% reduction from the high of $17 million at its peak. Research and development expenses were $2.4 million for fiscal third quarter of 2026 as compared to $3 million for the same period last year. As I mentioned earlier, the…

Thanks, Dan. Operator, we'll take questions now.

[Operator Instructions] Our first question comes from the line of Mike King with Rodman & Renshaw.

I have a couple of questions, if you don't mind. I just wonder if you could talk a little bit more about the sales process. I mean I think it's a great breakthrough that you've got sales into the VA system or VA hospital, I should say but it brings up the topic of the VA system, as you mentioned. How do you penetrate systems rather than a single hospital at a time? What needs to happen in terms of the sales process or the RFPs or things like that, that can see us knocking off more than one health care facility at a time?

Yes, go ahead, Bob. You take this one.

Yes, sure. And then you can definitely provide any color if you like, Steve. Thank you. Yes. So Mike, yes, with the VA system, we're on, as you know, and our product is being offered through the ECAD system. So that catalog actually makes it an easier approach for our customers to get to us directly. It's outside of an RFP process but we're -- yes, we're still able to actually compete with other RFPs that come up through -- there's a couple of different ways of the VAs contract with vendors. But -- so yes, so we have access that way. So it's great.

Okay. And in your formal comments, you mentioned words to the effect that you're identifying facilities most likely to acquire the system. How do you -- how do you -- or can you say how you identify them? And maybe help us understand how you're targeting those facilities?

Yes. So we've done a really good job standing up our commercial organization, both in the U.S. and internationally. And right now, what we're doing is we're focusing and not to say an overhaul but more of an exactness with our people and our process and our technology. So different prospecting tools with good intelligence and good CRM rigor to follow up with the customers and taking the process of real good demand generation where we're getting top of the funnel looks at our customers and having really good pipeline discipline so we could get in front of the right customers and then have our people, the people part of it in the right places at the right time with the right coverage. So we have that right reach and frequency getting in front of these customers and just getting in front of more and more. So we have that touch. So yes, we've been really refining that and the customers are really responding well for our ability to get in front of them.

That's great. Has there been any appreciable change in the length of the sales cycle?

Yes. I mean that pretty much Mike still remains the same. At the real front end, if you get kind of real lucky based off of the timing of a contract that might be expiring and that customer is really, really organized and you can knock out a real quick demo and evaluation, you could do that in that 4- or 5-month time frame. But it's really in that right around 6 to 9 months, and it could be longer. But what we're doing is a good job identifying the customers and again, reaching out to them and finding out where they're at with their contract and making sure that they see the value of our product. And with that, we're hoping that, that might restrict things just a bit. But we're really organized and our clinical teams are out there in the field with our sales teams to make sure that we're in front of them as early as possible.

Okay. And I apologize, one more quick one. How do you segment or can you segment the next-gen system so that this is typical of a lot of businesses where a next-generation chip, let's say, is coming out or something and the sales cycle kind of concertina effect where the purchaser may hold off until the next-gen system is available. Is that a concern? Or are you segmenting a different market with the new system?

Yes. So we're focusing right now, as you'd expect, on our first-generation product, and it's been really, really well received, the version 24 of Gen I. So -- and we're focusing on the non-transport systems, okay? And we're being really well received there. As there's natural conversations within the market for the transportation systems, that's a later on Gen II conversation, and we're really kind of breaking away from those conversations but being aware that these are systems that are going to want to be working with us in the future.

The next question is from the line of Marie Thibault with BTIG.

Welcome, Bob and Dan. I wanted to quickly just check in on anything -- any communications you've been having with the FDA on the Gen II process. Just speak to your confidence in the timeline, I think you said by end of calendar year. And then what will be needed to do post clearance in terms of building inventory, kind of a time line we might think about before you can go into a formal launch and ramp.

Okay. Thanks, Marie. Well, I'll comment on the FDA side. So we've been having fairly constant communication with FDA, and we're very happy with the interaction. we don't really see any major hurdles. Everything that FDA has asked for, we'll provide them. It shouldn't be a problem. And I'm sure there'll be -- the process will continue with the FDA, and we'll continue to answer the questions as we go forward. We still are waiting on the work to be completed with our contract manufacturer, so we can be inspected. And that's essentially in our minds, what the gating factor will be from a timing perspective. So we feel highly confident in the timelines that we provided given the state of affairs today. I don't know if I gave you the answer you need or if there's other things you want to ask.

Yes. Yes, that's great to hear. And then I guess I'll ask a quick follow-up here on the international side. I know you've got some great partnerships and some efforts going on there. So any wins or any catalysts to think about on the international side?

Sure, Bob, do you want to take the international question?

Yes, sure. So we have had some recent wins, which is great. And I think as you know from the past calls, it was all about setting up and getting our distributors armed with our demo devices so they can get in front of the systems. But then there's the whole part of the process with whether it's Europe or Middle East or Australia, where it's mostly tenders compared to the U.K. or Portugal where there's a national frame or you get that hunting license like Germany and APAC where you can go direct. So with all those different regions, yes, no, we've had wins. And on top of having wins, we're now actually seeing customers reorder filters. So the product is being deployed into hospitals now, which is great, and we're starting to, again, get that stickiness. So it's fantastic.

Our next question is from the line of Justin Walsh with Jones Trading.

Wondering if you can provide any color on what attracted XTL Biopharmaceuticals to be interested in the NeuroNOS opportunity? And then how, I guess, collaboration or working with them will look going forward, given that you still have a stake in that company?

Thanks for the question. So yes, Justin, look, XTL was a company looking for an asset, and there were multiple choices for them. I think what excited them about this opportunity is the science. I mean there's been 2 papers, landmark papers published about the work done by Dr. Amal, who's a scientist and the innovator behind this approach to treating autism as well as glioblastoma. I just want people to recognize that the functions of nitric oxide in the brain are numerous. So I think that's what attracted them to this. There's a clear path to human studies. I think a lot of the work that's been done by the NeuroNOS team has given that clarity to anybody who's taken a look under the hood. So I think it's just a matter of providing the FDA what they require, which is pretty straightforward. It's just a matter of getting that work done. So with XTL coming up with funding, they'll be able to bring this into humans. So I think the attractiveness was great science, clear path to human trials. And as everyone on this call probably knows, translating efficacy from rodents to humans is something that's difficult to predict but we'll find out. And I think that's what attracted and we're going to get there and do that study and figure out if the efficacy translates. And if it does, we're looking at a potential treatment for autism and glioblastoma at this point. So it's very exciting, just a little bit early for Beyond Air to maintain and fund. So this is why the transaction was done, and we're very happy that a lot of this transaction for Beyond Air is us getting a 20% stake in the new entity. That's the confidence we have that this is going to be in human trials. And we have confidence on the safety side for sure. The efficacy side, we'll see what happens.

The next question is from the line of Jason Kolbert with David Boral Capital.

Can we talk a little bit about COGS and how COGS performed in the quarter? And over the next couple of years, what do you think a sustainable COGS is?

Dan, do you want to take that one?

Sure. We tend to see Gen I, again, we think we're in the -- and Steve can help me on this. I'm still pretty new on it. But we expect COGS long term as we get to scale in the 60% range and moving up towards 70% with the Gen II product. But in the near term, again, with revenue levels growing but growing at a more moderate pace until we hit the Gen II launch, again, I think you're going to see it pretty close to that what you saw in Q3 and continue to grow from there. But long term, I think that gives you a little profile, and I'm guessing you guys have possibly talked about that in the past as well.

And just follow up on what Dan said, if you don't mind. Yes, I think Dan is right in what he says but I would -- there are a couple of factors. And like Dan said, he's barely 2 months in. There are a couple of factors that we're still trying to figure out with respect to the margin on, and that will be from a pricing side of the market. So I think that goal of 70% with the Gen II is a great goal. That's target. If it's 65%, 65%, that's not the end of the world for us. But I think that's our target, and I think we'd like to hit it. And target with Gen I would be to get close to 60%. But again, I think a Gen I is more of a 50s type thing. But again, it's going to depend on how the price shakes out in the market at the end of the day. And that remains to be seen. You had a follow-up, Jason?

Very helpful. Can you talk also about SG&A and how sensitive the sales cycle would be to increasing SG&A, hiring additional salespeople? How does that impact kind of revenues? What I'm trying to do is get a handle on more capital deployed in SG&A, does that translate into more revenues?

Well, Jason, I mean, you had [Audio Gap]

The next question is from the line of Yale Jen with Laidlaw.

Just in the press release, you mentioned that for the Gen II, there has a potential of extending the service intervals. Could you elaborate a little bit more on that specific aspect? Hello, can you hear me?

Yes. Please standby ladies and gentleman, we are experiencing technical difficulties. Our conference will resume momentarily. Please remain on line, our conference will resume momentarily. Please remain on line, your call will resume momentarily. [Technical Difficulty] Steve, you're now reconnected, please continue.

I believe in the press release, you mentioned that the second gen will have the potential of extending the -- make a longer service intervals. Could you elaborate a little bit more specifically on this particular aspect? And then I have a follow-up.

Thanks, Yan. Appreciate that question. So the current system, the first-generation system, every 1,000 hours, we need to bring it in for service. So that can be that can -- it could be a slight disruption for the hospital if they're using a couple of thousand hours a year per machine. So we might be in there every 6 months rotating machines. So it's a smooth process but it's an expensive process for us, right? So we just come in, drop them a new machine and pick that one up and bring it in for service. So it's not very frequent but it's something we'd like to improve upon. So with the second-generation machine, we think that service interval will be pushed out to at least 3,000 hours before we need and potentially longer. So testing is still going on. We haven't reached that juncture yet where the reliability testing that we're doing has stopped. So it's still ongoing. So we're past the 3,000-hour mark at this point, which means it's at least 3x longer before we have to go in. So if we were going in every -- at a hospital, let's say, we're going in every 10 months, now we're going in every 30 months on average before we have to swap out the machine. So that's -- it's certainly better for the hospital from that standpoint, although I don't think the swap outs are really a problem for them because our team does a great job and it runs so smooth. But from a gross margin perspective, I think that's the impact that you heard about earlier on a question when Dan and I were responding to the gross margins between Gen I and Gen II.

Okay. Great. And maybe just touch on that to this one a little bit, which is that would this be needed -- you mentioned you're still testing for maybe even longer interval for the service needed. Would that be required before you submit for the Gen II review? Or that's something that could be -- the Gen II review without having this particular aspect?

No, this is -- so there is a reliability hurdle with FDA. We've already passed that hurdle. So anything that we get is just more of a guide for us for service with our customers. That's really what it is. So it's not a gating factor for FDA approval.

Okay. Great. Maybe one more question. So on the oncology side that since you guys already have a little bit more cash in hand, should we think about the Phase II -- Phase Ib study potentially to start later this calendar year?

Well, I don't know when it will start, Yale. We're certainly speaking with people and looking at that. So I don't want to commit to a time line at this point. While we do have a nice balance sheet at this moment in time, I think we need to focus the balance sheet on the commercial operations at this point. So it would probably not be something that Beyond Air would commit to fully fund a study like that. Maybe once we are more comfortable with our path to profitability, that could be a different conversation that we have internally.

Okay. And congrats on the good quarter in terms of the top line.

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.

No, I'd just like to thank everybody for dialing in today. Bye-bye.

Thanks, everyone, for their time today. You may now disconnect your lines at this time, and have a wonderful day.