Beyond Air (XAIR) Q4 2025 Earnings Call Transcript

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DATE

• Tuesday, June 17, 2025, at 4:30 p.m. EDT

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Steven Adam Lisi
• Chief Financial Officer — Douglas Quinton Larson

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RISKS

• Gross Profit Loss: Chief Financial Officer Larson reported, We reported a $1.7 million gross profit loss for FY2025, compared to $1.3 million in FY2024, primarily due to device depreciation and upgrade costs.
• Operating Cash Position: Larson stated that as of March 31, 2025, The company held $6.9 million in cash, cash equivalents, and marketable securities, with additional payments received subsequently, but added, "We believe our cash, cash equivalents, marketable securities, and existing financing vehicles will be sufficient ... provided we continue to hit our internal revenue estimates and control costs at Beyond Air."
• International Expansion Timing: CEO Lisi cautioned, "it's a little early for us to see any trends in actual hospitals outside the U.S." and noted geographic tender processes and regulatory timelines could impact the speed of international revenue contributions.

TAKEAWAYS

• Annual Revenue: GAAP revenue reached $3.7 million for FY2025, up 220% from $1.2 million in FY2024, with all growth coming from U.S. hospital customers.
• Quarterly Revenue Guidance: Projected revenue for Q1 FY2026 is at least $1.7 million, representing over 45% sequential growth and more than 145% year-over-year growth.
• Full-Year Revenue Guidance: Full-year revenue for FY2026 is projected to range from $12 million to $16 million, excluding any impact from LungFit PH2.
• Hospital Contracts: Three new hospital starts and three contract renewals secured during the fourth quarter, with the U.S. installed and active customer base now approximately 45 hospitals, according to the most recent company update.
• Operating Expense Reduction: Over the past six quarters, GAAP operating expenses have been reduced by 58%, from over $17 million to just above $7 million in Q4 FY2025.
• Net Loss: GAAP net loss attributable to common stock was $46.6 million for FY2025, resulting in a basic and diluted loss of 69¢ per share for FY2025; Net cash burn was $44.1 million, more than 28% lower than the prior year.
• LungFit PH2 Pipeline: A PMA supplement was submitted to the FDA for the second-generation LungFit PH system (as announced on the Q4 FY2025 earnings call), which is designed for enhanced portability and easier transport, and includes customer-driven feature upgrades.
• International Expansion: New distribution partnerships signed in more than ten countries, with over a dozen LungFit PH units already shipped abroad; regulatory approvals, including CE Mark, secured in Europe, Southeast Asia, and the Middle East.
• Beyond Cancer Program: Regulatory approval received in Israel for a phase 1b clinical trial of ultra-high concentration nitric oxide in combination with anti-PD-1 therapy for late-stage cancer patients.
• Neuronass Program: U.S. FDA granted orphan drug designation for BA-102 in Phelan-McDermid syndrome; $2 million in new private equity financing was closed in March to support preclinical development in autism.

SUMMARY

Beyond Air (XAIR 11.07%) reported substantial GAAP revenue growth for FY2025, driven primarily by new and renewed U.S. hospital contracts for its LungFit platform, and signaled increased commercial activity through aggressive operating expense reductions. Management introduced significant revenue guidance for the upcoming fiscal year and outlined U.S. and international market expansion strategies, supplemented by progress toward FDA approval for the LungFit PH2 device and strategic partnerships in more than ten new global markets. Research and development expenses decreased from $24.4 million in FY2024 to $16.9 million in FY2025, while the organization's pipeline divisions -- Beyond Cancer and Neuronass -- advanced with clinical milestones and external funding, highlighting portfolio diversification across rare disease and oncology therapeutics.

• CEO Lisi said, "Fiscal '26 guidance does not include the second-generation system at all."
• Chief Financial Officer Larson described cost-control progress: "Over the past six quarters, we've reduced operating expenses from north of $17 million to just above $7 million in the current quarter. This translates to a 58% reduction."
• Lisi commented on global distribution, noting that initial international shipments are primarily to distributors for demonstration and that "the back half of this fiscal year, we'll see a big upswing on the international side as we get hospital placements."
• Lisi detailed customer adoption models: "One of the things we started offering earlier this year is the Razer Blade model. So the purchase of our system and then the ongoing purchase of the consumables, which is mainly the filter," contributing to flexible revenue structures.
• Lisi confirmed there has been no observed change in contract dynamics following a competitor's recent launch, stating, "So, yeah, it's another competitor. It's another cylinder-based system out there. That's the fourth cylinder-based system in the United States."

INDUSTRY GLOSSARY

• LungFit PH: Beyond Air's FDA-approved nitric oxide generator and delivery system, primarily used for persistent pulmonary hypertension of the newborn.
• PMA Supplement: Application submitted to the FDA for a significant modification or update to an already approved Premarket Approval medical device product.
• CE Mark: European regulatory certification indicating that a product conforms with health, safety, and environmental protection standards for products sold within the European Economic Area.
• Razer Blade Model: Sales strategy combining a primary device sale (the “razor”) with ongoing, recurring consumable sales (the “blades”), in this case, filters for the LungFit system.
• UNO (Ultra-high concentration Nitric Oxide): Investigational therapeutic platform by Beyond Cancer for oncology indications, delivering nitric oxide at substantially higher concentrations than conventional medical applications.

Full Conference Call Transcript

Steve Lisi, Chairman and Chief Executive Officer of Beyond Air. Go ahead, Steve.

Steven Adam Lisi: Thanks, Corey. And good afternoon to everyone. With me here today is Doug Larson, our Chief Financial Officer. We are quite pleased with the progress we've made over the past year. For the fiscal year ended 03/31/2025, we reported a 220% increase in revenue to $3.7 million compared with $1.2 million for the same period last year. All of this growth came from U.S. sales, with the majority coming from hospitals signed during the back half of the year. As a result, we have tremendous revenue growth built into kick off fiscal year 2026, along with several new growth drivers I will discuss in a moment.

With this in mind, we have decided to also announce that we are on track to report revenue of at least $1.7 million for the quarter ending in just two weeks on 06/30/2025, which translates to greater than a 45% sequential quarterly growth and greater than 145% year-over-year growth. In addition, we are providing revenue guidance of $12 million to $16 million for the full fiscal year ending 03/31/2026. This level of projected growth moving forward shows how we are overcoming the barriers to entry in the nitric oxide market and are well on our way to making LungFit PH the market leader.

The more customers use LungFit PH, the more confidence grows in the product and our ability to provide top-tier service. This is an exciting time for our team and our shareholders. Let me now dig a little deeper into the numbers for the fiscal fourth quarter of 2025 and growth drivers for fiscal 2026. The commercial team's efforts have led to a steady flow of new hospital contracts throughout fiscal year 2025. During the fourth quarter, we saw three new hospital starts and three hospitals renew their contracts. As I've mentioned recently, we have established a solid customer base across key target regions in the U.S.

We are pleased and thankful that many of these customers have made themselves available as references for LungFit PH over recent months, which has proven to be a valuable tool when establishing new accounts. Further to the customer reference approach, we have partnered with Vanderbilt University Medical Center, naming them as the first luminary site for LungFit PH. Through this program, we will work alongside the Vanderbilt team to further optimize LungFit products and explore new opportunities to enhance hospital-based nitric oxide therapy. In addition, Vanderbilt has made themselves available to better showcase the full utility of LungFit PH technology to respiratory therapists, anesthesiologists, nurses, and other relevant clinicians at hospitals considering adopting our cylinder-free nitric oxide delivery system.

This collaboration marks a major milestone in our core mission to redefine tankless nitric oxide delivery and drive continued innovation in respiratory care. Now I would like to update you on the status of LungFit PH2, our next-generation system. As announced yesterday, we have submitted a PMA supplement to the FDA. LungFit PH2 is smaller, lighter, and designed for air and ground transportation while still delivering all the revolutionary features of the current FDA-approved system. Additional improvements include a more intuitive user interface, a more functional backup system, adjustable alarm volume, and significantly less frequent maintenance. All of these improvements were made with extensive input from our customers.

We anticipate that the anticipated FDA approval of the second-generation system and subsequent introduction to the U.S. market will have a major impact on our market share, total annual volume, and logistics within the hospital. Looking outside the U.S., over the course of just the past six months, we have quickly ramped up our commercial program across Europe, Southeast Asia, and the Middle East. These activities have included securing key regulatory approvals, including CE Mark, as well as signing distribution agreements across more than two dozen countries covering over 2 billion lives.

Today, we announced that the team has recently signed several new international distribution partnerships in the following countries: India, Italy, Latvia, Lithuania, Estonia, Ukraine, Kuwait, Kazakhstan, Israel, and Poland. As a reminder, because the LungFit system generates NO from ambient air, unlike other systems that require NO-filled cylinders, we are opening an enormous new opportunity in geographical areas around the world where hospitals are unable to obtain nitric oxide supply or do not use nitric oxide due to the logistical difficulties associated with cumbersome cylinder-based systems. I am pleased to report that we have already shipped more than a dozen units of LungFit PH to customers outside the U.S. over the course of just the past few weeks.

As a result, we plan to see a meaningful contribution from these activities reflected in our financial results starting in the back half of fiscal 2026 and beyond. Turning to Beyond Cancer, as previously reported, they received regulatory approval in Israel to begin a phase 1b trial for low-volume UNO or ultra-high concentration nitric oxide in combination with anti-PD-1 therapy in late-stage cancer patients who have failed anti-PD-1 therapy. This remains an area of high unmet patient need. Timing for the initiation of this study is under review. Onto Neuronass, our subsidiary focused on therapies for autism spectrum disorders. We are pleased to announce recently that the U.S.

FDA granted orphan drug designation to our lead investigational therapy BA-102, which is being developed for the treatment of Phelan-McDermid syndrome, a syndrome associated with autism spectrum disorder. As many of you are aware, this designation provides key development incentives, including years of market exclusivity upon approval, tax credits for qualified clinical trials, waiver of FDA application fees, and access to FDA protocol assistance. Neuronass will meet with the FDA later this year to get an idea of the path to human studies we expect to begin late in calendar 2026. The excitement around our autism program goes beyond our walls. This is evident by our ability to recruit leaders in the field to our scientific advisory board.

Just recently, we announced the appointment of Nobel Prize laureate Professor Dan Shechtman to the NeuroNOS SAB. We believe bringing in Professor Shechtman to join Professor Roger Kornberg from Stanford University on this board brings unparalleled scientific expertise to the Neuronass team. During March, NeuroNOS published a peer-reviewed journal article in Translational Psychiatry, which presented breakthrough research by its chief scientific officer, Professor Haitha Mamal, which shows compelling evidence of a novel mechanism in the early stages of Alzheimer's disease. These new preclinical data further underscore the consistency and power of Neuronass' platform and offer new hope for the development of effective therapies for this devastating condition.

Building on the excitement around the data and progress of its programs, announced in March that it completed a $2 million equity financing from private investors as part of a larger funding round. This investment will accelerate the preclinical development of Neuronass' small-molecule drug, designed as an injectable or oral treatment for children with autism. Turning to the corporate side, we're excited to announce today the appointment of Bob Goodman to our board of directors effective June 13, 2025. Bob is a seasoned healthcare executive and board director who brings decades of commercial leadership experience from across the medical technology, pharmaceutical services, and medical device industries.

His career has included executive roles at BioTelemetry, Philips Healthcare, CardioCore, Thermo Fisher, and Pfizer. Our board and management team look forward to working with Bob as we continue to build positive momentum across the commercial side of our business. Before I conclude my comments today, I want to mention that our LungFitGo program is still moving along. We are dedicated to bringing this therapy to market to improve the lives of patients suffering from lung infections. We plan to meet with the FDA prior to year-end to discuss the clinical path forward. We continue to make significant progress in executing against the strategies for each of our businesses.

The past year showed just a glimpse of how LungFit PH transformed the global NO landscape for the better and gives us a solid foundation from which to continue to build. The Beyond Air team will continue to be diligent on its path to profitability and improving the lives of patients in need of the benefits of nitric oxide. Now I will turn it over to our CFO, Doug Larson.

Douglas Quinton Larson: Thanks, Steve, and good afternoon, everyone. Our financial results for the fourth quarter of fiscal year 2025, which ended 03/31/2025, are as follows. Revenue for the fiscal year ended 03/31/2025 increased 20% to $3.7 million compared with $1.2 million for the fiscal year ended 03/31/2024. We're showing a $1.7 million loss in gross profit for the fiscal year 2025 compared to $1.3 million for fiscal year 2024. Cost of revenue of $5.4 million were recognized in the fiscal year compared with $2.5 million in the fiscal year ended 03/31/2024. Cost of revenue exceeded revenue primarily driven by the depreciation of LungFit devices and one-time upgrade costs to systems.

Research and development expenses were $16.9 million for fiscal year 2025 compared with $24.4 million for the fiscal year ended 03/31/2024. The decrease of $7.5 million was primarily attributed to a decrease in salaries, stock-based compensation, and to a lesser extent, from clinical and preclinical study SG&A expenses for the year ended 03/31/2025 and 03/31/2024 were $26 million and $37.3 million, respectively. A decrease of $11.3 million was attributed primarily to a reduction in salaries and stock-based compensation costs. Other expense was $3.9 million compared to $1.3 million a year ago. The increase in other expense of $2.6 million was mainly due to a non-cash loss recorded upon the retirement of Avenue Capital debt.

Net loss attributed to common stock of Beyond Air was $46.6 million or a loss of 69¢ per share basic and diluted. Our net loss for the fiscal year ended 03/31/2024 was $60.2 million or a loss of $1.82 per share basic and diluted. Net cash burn for the year was $44.1 million, which is more than 28% lower than the previous year. We've talked in previous quarters about how we've been laser-focused on fixed cost reduction in R&D and in our supply chain. Now that we're wrapping up spending on the development of our next-generation LungFit device, we'll see further reduction in our cash burn in Q1 and again in Q2.

I would like to take a moment and expand a bit on our cost reduction efforts. Over the past six quarters, we've reduced operating expenses from north of $17 million to just above $7 million in the current quarter. This translates to a 58% reduction. We believe the trough in our operating expenses will either be in the coming June or September. Please do not interpret that expenses will be moving up significantly in December. Expenses will move up in proportion to our commercial performance to maintain our excellence in service and take advantage of coming opportunities. As of 03/31/2025, the company had cash, cash equivalents, and marketable securities of $6.9 million.

Please note this does not include the $1 million payment we received from Getz Healthcare nor the additional $2 million investment into our existing synthetic royalty debt structure, both of which we received after 03/31/2025. We believe our cash, cash equivalents, marketable securities, and existing financing vehicles will be sufficient to allow us to support our current operating plans well into calendar 2026 and potentially to profitability, provided we continue to hit our internal revenue estimates and control costs at Beyond Air. And with that, I'll hand the call back to Steve.

Steven Adam Lisi: Thanks, Doug. We'll now take some questions. Operator?

Operator: Thank you. We'll now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. Participants using speaker equipment may be necessary to pick up your handset before pressing the star key. One moment, while we poll for questions. Our first question is from Marie Thibault with BTIG.

Marie Yoko Thibault: Hi, good afternoon, and congrats on the progress here. Wanted to ask my first question here about LungFit 2.0. Great to see that get in. Wanted to understand if that system approval is being assumed in the fiscal year 26 guidance range that you've given us and how we should think about the selling dynamics ahead of that potential approval. Is that something where hospitals see that coming approval and say, hey, I want to get exposure to LungFit before that comes out? Is it, you know, they wait a little bit as they're waiting for that gen system? Help us think about some of those dynamics.

Steven Adam Lisi: Thanks, Marie. Fiscal '26 guidance does not include the second-generation system at all. And to answer your other question, you know, we don't promote the gen two, obviously, until we get approval. So people know it exists, obviously, and they do inquire. But I think it's, you know, the focus is on gen one. That's what we're promoting now, and that's what we're marketing and pushing. And yeah, I mean, obviously, there are some hospitals that are getting exposure to gen one immediately, and then there are others who will choose to wait. So we've seen both at this point.

Marie Yoko Thibault: Okay. Very encouraging. Very helpful, Steve. I want to ask also about OUS. You've, you know, gotten several shipments out there. It sounds like, of units. What are we understanding about what some of those contracts look like? Is there any difference in how hospitals use this versus how they use it within U.S. hospitals? Any trends or specific countries we should be looking toward or any other catalyst OUS? Just want to get a little closer to that market.

Steven Adam Lisi: Yeah, I think it's a little early for us to see any trends in actual hospitals outside the U.S. Right now, our shipments are initial shipments to distributors. And they're taking those and using them for demonstration to get interest to have hospital placements. And there's a much more tender process outside the United States than in the U.S., so it takes a little bit longer to get into the hospitals. So I think the back half of this fiscal year, we'll see a big upswing on the international side as we get hospital placements, and we'll get some trends at that point.

But our initial work in the market outside the U.S. is showing, you know, consistency in terms of how they use nitric oxide. You know, outside the U.S., cardiac surgery is on label. So they're definitely using it in that area. But again, it's similar to how it's used in the United States.

Marie Yoko Thibault: Okay. Very helpful updates. Thanks a lot, Steve.

Steven Adam Lisi: Thanks, Marie.

Operator: Thank you. Our next question is from Jason Wittes with ROTH Capital.

Jason Hart Wittes: Hi. Thanks for taking the questions, and congrats on the progress here. On the PMA submission, do you have an expected timeline for when we may see an approval for that for that for LungFit PH2?

Steven Adam Lisi: Jason, did you ask me when FDA is gonna approve?

Jason Hart Wittes: I just do you have an estimate is what I'm asking? And I guess I was I'd add to that, how should we think about a potential launch? It's think you had indicated earlier that it's kind of stage launch versus an immediate bolus type. Just curious about the dynamics around what we might expect when the FDA approves this device.

Steven Adam Lisi: Okay. So, yeah, I'm gonna stay away from the exact timing on an FDA approval. I mean, you know, everybody kinda knows what's going on at FDA right now. There's a little bit of an upheaval. Let's just kinda let things settle in. It'll take a few months for us to interact with FDA and get a better understanding of their questions on our application. And, you know, perhaps, you know, I can give some more timelines or better guidance on timing at that moment in time. But as for the launch for Gen two, you know, obviously, we're gonna prep for that as we work with FDA.

There's always a period where you need to build up inventory and you need to scale up your manufacturing. So it will take a couple of months and then we will try to keep up with demand. That'll probably be the challenge that we have post-approval.

Jason Hart Wittes: Okay. That's fair. That's a totally appropriate answer. I get it. And then, you know, appreciate the guidance, which looks quite strong. We're at the low end. There's a big range there. I mean, what has to happen to get towards the higher end of that range for the $12 to $16 million that you're kind of hinting or pointing to for 2026?

Steven Adam Lisi: Yeah. It's not really that big of a range. I mean, $4 million range. I guess it seems that way because it's a small, you know, $12 to $16. It's not a 100 to a 104. Percentage-wise, certainly, but dollar-wise, you know, go ahead. You know, I mean, you know, you can get a couple of contracts that are a good size, and it can move you a few million dollars. You know, we can get some approvals, regulatory approvals overseas for some big countries and get some big orders in.

So, you know, it's not to us, it's not that big of a range because things can swing dramatically with some of the things that we have going on in the pipeline. So, you know, that's kinda how we view it. We feel pretty comfortable getting to There's too many moving parts and it's only June. So it's exciting for us.

Jason Hart Wittes: Got it. That's helpful. And then, maybe just another clarification. On did I hear correctly? So, basically, on the expense line, there'll be further reductions until expected through September, and then you basically grow with revenues. And on the expense line, is that the right way to think about modeling the P&L?

Steven Adam Lisi: Yes, exactly.

Jason Hart Wittes: Okay. That's all I got. Thanks, and congrats on the PMA submission.

Steven Adam Lisi: Thanks, Jason.

Operator: Our next question is from Justin Walsh with Jones Trading.

Justin Howard Walsh: Hi. Thanks for taking the question. And now you guys are supplying globally, I was wondering, I guess, the degree to which you're seeing impacts or worried about impacts from some of the emerging geopolitical questions. I mean, we have a moving target with U.S. tariffs. And you mentioned that you're supplying to Ukraine and, of course, you have ties in Israel. So just curious how all of that is impacting things or not.

Steven Adam Lisi: You know, I don't think it's impacting us that much. I mean, we manufacture in the United States for LungFit. So the vast majority of our costs are in the U.S. We do source some parts from outside the U.S. But it's not a major impact if those tariffs and some of the big ones are going to stay in place. It's a low single-digit percentage impact on our cost of goods. So it's not a major impact on us. And on the reverse side, we haven't really seen anything about where we're shipping to in terms of tariffs on the other end at this point.

And as for Israel and Ukraine, I mean, honestly, it wasn't, you know, Israel's great to be in. It's not a large country. But it will impact our ex-U.S. sales. We're very happy to be there. But I don't think it's a major driver like a France or a Turkey. Or an Australia, India, you know, these are much bigger countries where we are. And to be honest, we were very surprised and happy that the distributor that we're working with in Eastern Europe had Ukraine on their list. So we're very excited to be able to help the distributor there going to Ukraine, but we didn't have any expectations for that. So that's just upside.

Justin Howard Walsh: Great. And maybe just a follow-up on that. I'm curious if you're seeing more uptake in some of those or where you think some of the markets might be a little bigger? I mean, obviously, you just mentioned a couple of them, but I'm wondering if you really think you'll take off in India or somewhere in particular.

Steven Adam Lisi: Yeah. I mean, it depends. Like, they're all different in terms of timing. So India, we have a partner, but there's a regulatory process to go through. So the impact from India on this fiscal year will be minimal. And, you know, some of the other countries where, like Australia, Thailand, France, Romania, Turkey. These places, the regulatory process is already done or a very short time. So we'll get some more impact from them. But it's like I said earlier, an early question, it's a little too early. Because there are tender processes in a lot of these countries, so it takes time to get in. To some hospitals.

So we're gonna wait the next, you know, three, four, five months to see how those go and how many we get and how quickly we get in. And every country is different, so this is new for us. As a company and new for this product. Even our international team who has experience with this, this is a new product. I mean, no one's ever seen a non-cylinder-based nitric oxide system outside the United States before. And, certainly not one that makes it from ambient air. So this is kind of new for everybody, and we have some distributors who are extremely excited, jumped at the opportunity, and it was a very quick process to sign them up.

And others are a little more skeptical. I think because

Operator: Our next question is from Yale Jen with Laidlaw and Company.

Yale Jen: Good afternoon, and thanks for taking the questions. And congrats on the guidance as well as the performance. We just got about three here. The first one is that you suggest that you will have more than $1.7 million for the next quarter or current ongoing quarters, actually. And $12 to $16 million for the fiscal '26. So what's the confidence you can provide behind these forecasts or projections? And I have a follow-up.

Steven Adam Lisi: Thanks, Yale. I mean, we're pretty confident. We wouldn't have put it out if we weren't. I think the fact that June ends in two weeks, we're pretty confident it'll be $1.7 million. You know, it could be something that happens in the next two weeks to bump it up a bit. We can't really predict that. But we're highly confident in that number. And, as for the fiscal year, we're pretty confident. I mean, we've got a lot in the hopper here. Especially on the international side. Even in the U.S., there's movement in some areas that, you know, we're excited to see and maybe happening a little bit sooner than we thought. So I'll give you an example.

You know, we're very flexible with the customers and how they want to structure their contracts. It's very easy with our system to be as flexible as they would like us to be. But one of the things we started offering earlier this year is the Razer Blade model. So the purchase of our system and then the ongoing purchase of the consumables, which is mainly the filter. And we've gotten some good feedback over the last month or two on that model.

So we may actually see some hospitals jumping at the opportunity for that rather than the more traditional nitric oxide model, which is how many hours do you use, x amount, this is what your annual cost could be divided by 12, and you get paid that per month. That's really the main way it's done, but we're offering this other way of doing it with the purchase model. And, you know, we may see some of that in this fiscal year, and that's exciting. And that gives us some confidence in our numbers because it wasn't something we were seeing six to nine months ago at all.

Yale Jen: Okay. Great. That's very helpful and confident. And also, in the press release, you mentioned you have about 45 in the United States now either installed or actually as well as using the LungFit systems. And so going toward, let's say, the end of this year, fiscal maybe or if the calendar year is of this end of this year. Do you anticipate what might be the estimate or projection of the number of hospitals that you may have as well as maybe whether you would also see the volume increase per hospital?

Steven Adam Lisi: You know, I definitely see the volume increasing per hospital. We've been seeing that for the past year and a half. A lot of our hospitals are going over what their estimate was for the year. That's a good thing. You know, we do offer a discounted hourly rate if they go over. So certainty of price is important for the customer. So I think that may continue. Hopefully, hospitals can get a bit, you know, with us and get a better handle on what they're gonna use for the year. So there's certainty in what they're spending. I don't want to speculate on the total number of hospitals we're going to have at the end of the fiscal year.

While it's important, while it's important, you know, not every hospital is created equal. So some hospitals are small in terms of their volume, and some are very large in terms of their volume. So we could have one hospital be worth 10 in some cases. So obviously, 45 is a great number. I certainly see it being significantly more than that number at the end of the fiscal year. But, I'm not gonna take a guess and try to triangulate that exact number right now, Yale. But thank you.

Yale Jen: Okay. Great. And maybe just squeeze in one more question. So, follow-up the earlier one. That for the PMA applications, I know this is difficult to predict the timing to possible approval. For a possible approval. But just let's assume or maybe if in the normal quote-unquote, normal circumstances, would this process maybe take about twelve months to sixteen months or shorter? Just curious. What will be the reference point we can at least think about? And thanks.

Steven Adam Lisi: Yeah. So there are statistics that FDA puts out about PMAs and PM this is a PMA supplement. So FDA puts statistics out about how long these things take so you can see them online. I just caution you to take these averages because not every PMA is created equal. You know, we are just a supplement. You know, we've generation system. Basically, make nitric oxide the same way as our with our second-generation system as our first generation. A lot of the things that we do are equivalent. It's obviously smaller. It obviously has some enhanced features. And it obviously is built to be used for ambulances and helicopters and airplanes.

So there are some differences, but from how it operates, it's really not that much different. So could we be quicker than the average that FDA puts out? Probably. But, again, if you look at FDA's guidelines, it's a hundred and eighty days. For a PMA supplement. And they normally do not hit that hundred and eighty days. And it's not that they can't hit their timelines. A lot of times, they have questions. And that clock will stop. While you're having discussions with FDA. So that's something that companies don't control, FDA does, and we're gonna work with them. Get this done as quickly as possible. But I just don't know what that timeline will be.

At this point, we'll have a better handle once we start discussions with FDA in the next couple of months.

Yale Jen: Great. That's a lot of great colors on the story. And, again, congrats and thanks for taking the question.

Steven Adam Lisi: Thanks, Yale.

Operator: Our next question is from Jason Bednar with Piper Sandler.

Joseph Daniel Downing: Hey, guys. Thanks for taking the questions. Is Joe Downing on for Jason. Congrats on the PMA submission. Just wondering if there's any difference you can call out in the sales process with the 2.0 device versus the 1.0 device. And then just off of that, can you just remind us how much this LungFit 2.0 expands the market?

Steven Adam Lisi: So, Joe, thanks for the questions. I mean, we're not trying to sell this gen two or market the gen two right now, so we're not gonna comment on how the process is different because we don't have a process yet. We have to wait for approval on that. But as for how it opens the market, I mean, it vastly expands this market. It opens it up for us as a company to every hospital in the world that wants to use nitric oxide. Can get it anywhere. Our gen one is already in remote locations treating patients. So the gen two, it'll be even easier. To do that.

So this is something that will change the way people use nitric oxide in the hospital. I think that it will increase volumes overall and, again, reach hospitals that don't use nitric right now. So this is a for us, I think, and for the industry, it's a game changer. It really is.

Joseph Daniel Downing: Great. Thanks, Steve. Appreciate that. And then just one last one on the competitive landscape. Your largest peer put out a new offering a number of months ago. Just wondering if you're seeing anything worth calling out with contract negotiations with hospitals as a result of that launch?

Steven Adam Lisi: Which one are you talking about?

Joseph Daniel Downing: Mallinckrodt.

Steven Adam Lisi: Oh, the Mallinckrodt offering? You know, we haven't seen a change. I mean, the contracts are usually one, three, and five years. This market. We haven't really seen any change in that. So at least my team and I haven't really seen much change. Yes. They're out there with their new offering and, you know, they're marketing it for sure. And I see I think they, last time they spoke, they gave an idea of how many hospitals they were in or something or that they were in hospitals. So you can take a look at what their transcript said. So, yeah, it's another competitor. It's another cylinder-based system. Out there. That's the fourth cylinder-based system in the United States.

Joseph Daniel Downing: Great. Thanks, Steve. Appreciate it.

Steven Adam Lisi: Yep. Thanks, Joe.

Operator: At this time, we're showing no further questions in queue. This does conclude our question and answer session. I would now like to turn the call back over to Steve Lisi for any closing remarks.

Steven Adam Lisi: Just like to thank everybody for joining us today. And, we'll talk to you in August. Thank you.

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