Good day everyone. Welcome to the PhenomeX first quarter 2023 earnings call. Today's call is being recorded. I would now like to turn the conference over to Suzanne Hatcher, Senior Vice President, Investor Relations and Communications. Please go ahead. Thank you, operator. Good afternoon, everyone, welcome to the PhenomeX first quarter 2023 earnings call, reporting financial results for the quarter ended March 31, 2023. My name is Suzanne Hatcher, Senior Vice President of Communications and Investor Relations at PhenomeX. I'm joined today by Dr. Siddhartha Kadia, Chief Executive Officer, Mehul Joshi, Chief Financial Officer, and Dr. Rolando Brouwer, Chief Business Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal security laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. For more information, please refer to the risks, uncertainties and other factors discussed in our SEC filings. Except as required by law, PhenomeX disclaims any intention or obligation to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast May 11, 2023. As a reminder, you can find today's press release and an investor presentation on the PhenomeX website under the Investor Relations section. With that, I would like to turn the call over to Siddhartha. Thanks, Suzanne, and thank you everyone for joining us for our first earning call as PhenomeX. At the end of first quarter, we completed the acquisition of IsoPlexis, forming the combined company called PhenomeX. As PhenomeX, we are positioned to be the leading provider of life sciences solutions that will have the greatest impact advancing the era of the phenome as the next revolution in biology and medicine unfolds. Our unique suite of products and services offer unprecedented resolution and speed. In fact, PhenomeX sells the only single-cell platform able to isolate, manipulate, and characterize live cells while enabling large scale and multiplexed functional multi-omics. Our mission is to empower scientists to leverage the full potential of each cell and drive the next era of functional cell biology that will advance human health. We now have an installed base of 430 platforms with placements in all top 15 pharma companies by revenue and approximately 85% of U.S. comprehensive cancer centers. Our products have been cited in over 225 publications and are supported by a robust intellectual property portfolio of more than 600 patents. I will begin the call today by providing updates on the tremendous integration progress we have made in just seven weeks since the closing of the IsoPlexis acquisition and the tangible actions we are taking as we continue to execute on the five pillars of our strategic operating plan. I will turn the call over to Mehul, who will discuss our first quarter results and full year 2023 financial guidance. Starting with our first strategic pillar of building a world-class life sciences leadership team, we are continuing to bring on industry leaders with a proven track record in scaling life sciences tools companies. At the end of March, Dr. Yan Zhang joined PhenomeX as Chief Commercial Officer. In this newly created position, Yan oversees our global commercial organization and helps drive strategic growth across our platform and services business. Yan brings over 25 years of operating and management experience in the life sciences tools industry. Most recently, she served as CEO at Mission Bio, a life sciences company focused on high-throughput, single cell DNA and multi-omics analysis. Before Mission Bio, Yan served in various commercial and business executive leadership roles at Thermo Fisher Scientific, Life Technologies, EpiMetrics, NuGEN Technologies, and Molecular Devices. With the addition of Yan, we have a strong operational team in place with Sean Mackay, Chief Product Officer and former CEO of IsoPlexis, Eric Hobbs, Head of Global Operations and Business Integration and former Chief Executive Officer of Berkeley Lights, and Rolando Brouwer, who in his role as Chief Business Officer, leads the research and development and business development teams and is a former executive from Thermo Fisher Scientific, Exact Sciences, and Danaher. Our goal of building out the leadership team with deep experience in life sciences tools space is now complete. I believe PhenomeX collectively has the bench strength in life sciences tools as well as corporate function expertise in finance, human resources, legal, and communications that is needed to become the platform for growth in the life sciences tool space. We look forward to building momentum in critical global markets with our technology and unlocking the new company's tremendous potential. Moving on to our second strategic pillar of prioritizing R&D return on investment through increased focus and rigor on development initiatives. When forming PhenomeX, one of our main objectives was to create a balanced product portfolio with a range of price points to provide broader customer access across a larger portion of the cell biology market. To achieve this, we are focused on three key near-term development objectives. Number 1, growing the core business in antibody discovery, cell line development, and single-cell and bulk proteomics within three market segments: discovery, bioprocessing, and translational and clinical research. Number 2, completing the inducible producer cell line, IPCL, selector application for our latest system in development. This Beacon gene therapy system, which will be branded Beacon X, is expected to deliver unparalleled speed in cell line development within the AAV gene therapy space. Three, unlocking a new market in single-cell functional multi-omics for T cells with the recent launch of the T cell profiling workflow on Beacon and Beacon Quest for immuno-oncology and cell therapy, serving both academic and industrial market segments. We are well-positioned to accomplish these objectives with our newly combined product portfolio. Our optofluidics product portfolio includes Beacon system for antibody discovery, cell line development, single-cell functional multi-omics for T cell profiling, and AAV cell line development workflows. If you recall, we provided details of our AAV and multi-omics T cell profiling workflow in our November Investor Day. In April, PhenomeX launched the single-cell functional multi-omics T cell profiling workflow we believe will revolutionize immunotherapy research and development by comprehensively profiling single T cells to correlate polyfunctionality with cytotoxicity and recover selected cells for downstream analysis, including transcriptomic and genomic analysis of the same cells. The application is a great example of how customers can use our optofluidics and proteomics products together for optimal workflow by using the IsoSpot to profile up to 30 cytokines per cell, then using the Beacon to do more in-depth analysis on the cells producing similar cytokines, including multi-omics and cell interaction and killing. We believe this produces the most complete solution for this type of research on the market today, which can help researchers and drug developers in areas such as characterization of cell therapy donor materials, CAR T selection, identifying best killers, culture condition optimization, and primary cell safety assay, as well as potency assay, all of which is based on functional multi-omic analysis of the same cells. In addition to Beacon system, Beacon Select, a lower throughput Beacon system with a price of less than $1 million, supports our objective of lowering the barrier of entry for customers to gain access to our technology. In February 2023, the Beacon Select for enabling cell line development application was launched, and the Beacon Select for enabling the antibody discovery application is set to launch next week on May 15th at PEGS conference in Boston. This system is an ideal option for mid-sized biopharmas, CROs, and CDMOs, or those who already have a Beacon system but need additional capacity. Next, Beacon Quest, a lower cost platform only available for academic researchers, is set to launch on May 15th. Beacon Quest enables the main applications of Beacon system, including antibody discovery, cell line development, and single-cell functional multi-omic T-cell profiling. We believe this new product can provide significant value in high-growth academic research segments, particularly in immuno-oncology, translational cancer centers, and innovative cell and gene therapy development centers. With legacy IsoPlexis technologies already placed in approximately 85% of U.S. translational cancer centers, we intend to leverage these existing relationships and power synergies to grow a foothold in this very important market segment. Then finally, Beacon X, a new Beacon system specifically for gene therapy manufacturing, will only be available with a licensing service agreement and is currently in customer beta testing. We are further developing IPCL application that includes a unique hydrogel feature that helps differentially protect NanoPen to run destructive assays, and in turn, quickly identify high-producing AAV cell lines amongst a pool of thousands of cells containing the capsids and genes of interest. This system is anticipated to significantly expand the number of diseases that can be treated using gene therapies. We continue to dedicate ample resources to this workflow's development throughout 2023. We expect AAV manufacturing to drive 2024 growth in subscription service with increasing contribution in 2025. Under our proteomics portfolio, we offer the IsoSpark and IsoLight instrument platforms with applications to analyze single-cell immune secretome and bulk proteomics with the IsoCode Reagents chip. As part of our near-term pro-proteomics product roadmap, we plan to launch Meteor in June, a next-generation chip available on the IsoSpark system that automates multiplex bulk proteomics in high sample throughput. With Meteor and IsoCode single-cell analysis on the IsoSpark system, PhenomeX would enable a lab's entire portfolio in proteomics in one system. In the first half of 2024, we plan to launch IsoCode Nova, a next-generation high-throughput chip available on the IsoSpark system. This new chip is expected to significantly increase the number of cells that can be analyzed from less than 1,000 to up to 10,000. In addition to the three key near-term objectives previously described, substantial resources are committed to our next-generation platform. In early 2025, we plan to launch Phoenix, a new benchtop optofluidic system that combines the footprint and low cost of the IsoSpark and IsoLight instruments with the functionality of the Beacon optofluidics and supporting a wide suite of applications. With this system, the applications of our cell biology tools could be greatly expanded. One of the largest areas of focus is lowering the COGS of our optofluidic technology to significantly expand our serviceable addressable market. In the first four months of 2023, we have tested various components of this new benchtop design in an effort to de-risk our technical path towards COGS below $100,000, enabling a much more accessible price point for both academic and biopharma customer segments. Moving on to our third pillar, delivering consistent commercial execution. As a combined company, we now have a global commercial organization of approximately 130 customer-facing employees, including our sales teams, field application specialists, field service engineers, and technical customer support roles. This vastly strengthens our ability to reach academic, biopharma, and CRO companies across all geographics. T he commercial and technical teams are starting to cross train on the combined optofluidic and proteomics product portfolio with an eye towards revenue recognition in the second half of 2023. As I mentioned earlier, Dr. Yan Zhang joined PhenomeX as Chief Commercial Officer in March. We also welcomed Peter Silvester as a new member of the board last month. Peter brings more than 25 years of experience in the life sciences tools industry, most recently serving as Senior Vice President and President of Life Sciences Solutions at Thermo Fisher Scientific. Peter's wealth of knowledge, especially his experience in global markets and commercial operations, will be invaluable to our efforts to strengthen our commercial strategy under Yan's leadership. Yan has hit the ground running, and she is quickly instilling rigor and discipline in our commercial execution by focusing on market segmentation, accelerating regional expansion, driving market education through KOL engagement and publications. Working with Rolando Brouwer, our commercial team is already leveraging our expansive intellectual property portfolio of more than 600 patents for out-licensing and partnerships opportunities. We continue to focus our commercial efforts towards specific target customer segments within the industrial and academic markets. We expect to continue to penetrate the industrial biotech and pharmaceutical cell CRO segment. We will do this through broadening our Beacon Power portfolio with Beacon Select in antibody discovery and cell line development business, as I just described, and driving adoption and standard setting for the potency assay in the cell therapy market using the IsoSpark instrument. With the Beacon Quest and single-cell functional multi-omic T-cell profiling workflow, we will focus on expanding our reach into immuno-oncology, as well as the innovative cell and gene therapy development segments of the academic market, leveraging the current relationships from the IsoPlexis team, as well as the product install base of proteomics portfolio, where customers have expressed a strong unmet need in comprehensively characterizing patient samples and cell-based products, integrating functional analysis and transcripting, as well as genomic analysis of the same cells, and then finally exporting these cells of interest. For our regional expansion strategy, we will initially focus on Asia Pacific, including Japan, Taiwan, Singapore, and Korea. We have already begun this work by strengthening our leadership in the APAC region with the addition of Tomoya Aoyama as regional leader. Aoyama-san brings seasoned leadership with more than 25 years of experience in Asia in management roles at multinational public life sciences companies. In late April 2023, we established our legal entity in Japan and developed a go-to-market strategy and hired a strong team with robust tenure in life sciences industry. By Q3 2023, we expect to have a demonstration lab at Kyoto University. Turning to KOLs and publications at the recent AACR conference, PhenomeX technologies were highlighted in 14 abstracts and nine papers. Notably, one abstract featured combined data from our new multi-omic T-cell profiling workflow and IsoLite instrument by Dr. Anthony Zamora of The Medical College of Wisconsin. In short, using both our optofluidic and proteomic product lines, Dr. Zamora explored the underlying biological properties of CAR T-cells and discussed how combining single-cell polyfunctionality and their functional killing properties can potentially lead to the creation of more effective therapeutics. Several new studies using PhenomeX technologies have been published in key journals over the past month, including Nature Communications, Journal for ImmunoTherapy of Cancer, and Science Translational Medicine. This new customer data, in addition to the other publications using PhenomeX technologies, can be found on our website. We believe one of the largest commercial opportunities is the service agreements for AAV cell line development for gene therapy. We are actively building a robust funnel and engaging with various types of customers. While the progress in this area is dependent on our clients' timeline, we have made significant progress subsequent to our initial work with Thermo Fisher Scientific. Right now, workflow testing is currently underway with other commercial clients in addition to seeking out academic collaborations. As part of our strategy, we will leverage our portfolio of more than 600 patents to develop a strong out-licensing program. In Q1, we licensed a portion of our non-core IP to a company outside of cell biology field. To our fourth strategic pillar of generating positive operating cash flow in the fourth quarter of 2024. At PhenomeX, we are focused on building a profitable and sustainable business rather than pursuing growth at any cost. We continue to make progress against this goal with our updated market-driven product portfolio and pricing strategy as well as disciplined expense and cash management. When we announced our intent to acquire IsoPlexis in Q4 2022, we committed to delivering approximately $70 million in cost saving synergies. Our accelerated actions to reduced operating expenses are expected to yield cost synergies of approximately $72 million on a run rate basis by the end of Q2 2023. Our integration teams have worked diligently by reducing general and administrative costs from eliminating duplicative expenses associated with maintaining the infrastructure needed by public companies, prioritizing high-value R&D initiatives, streamlining marketing resources and sales operations, and ensuring manufacturing, supply chain, logistics, and operations synergies. Exiting in Q4 2023, our realized cost synergy on a run rate basis are expected to be between $80 million to $90 million ahead of our initially stated goals. I would like to give an update on our fifth strategic pillar of accelerating our path to profitable growth through mergers and acquisitions. As I discussed at the beginning of our call, we announced the closing of combination of Berkeley Lights and IsoPlexis to create PhenomeX. Seven weeks post-close, we have largely completed our integration and executed our cost synergy initiatives. In the intermediate term, we are laser-focused on commercial and product roadmap execution of the combined entity. In the long run, we remain committed to our objective of pursuing synergistic merger and acquisition options that either expand our total addressable market or provide leverage for our SG&A and research and development expense structure. When we think of synergistic mergers and acquisitions options that expand our total addressable market, these may include complementary technology techies that expand PhenomeX offerings, expansion of service offerings to existing and new customers, technology licensing opportunities, and opportunistic mergers and acquisitions with market dislocations. Overall, I am pleased by our progress during my four quarters of a tenure as the CEO and as we work to transform PhenomeX. With our attractive platform, we believe there are opportunities for consolidating other single-cell technologies into our portfolio with the vision of becoming a broad cell biology company. The next wave of biology and medicine is the era of phenome, and PhenomeX will power labs across that frontier. We have great opportunities ahead of us and a rigorous plan in place to create value for our customers and our shareholders. Now, I'd like to turn the call over to Mehul. Thank you, Siddhartha. Revenue in the first quarter was $18.5 million, which included $10.3 million of revenue from our optofluidics business from Berkeley Lights and $1 million of revenue contribution from our proteomics business from IsoPlexis in the eight business days following the close of the acquisition on March 21, 2023. Partnership, license, and other revenue was $7.2 million. Pro forma revenue in Q1 2023 for the combined companies was $20.2 million. By geography, North America accounted for 76% of total revenue in the first quarter 2023, followed by APAC at 17% and EMEA at 7%. Platform revenue was $6.1 million in the first quarter 2023. This consisted of $5.6 million of revenue from our optofluidics business and $500,000 from our proteomics business. Our installed base grew by eight platforms during the first quarter of 2023, consisting of four optofluidic platforms from Berkeley Lights and four proteomic platforms from IsoPlexis. This brings the total installed base of PhenomeX to 430 platforms. We continue to see demand for our products. However, macroeconomic factors are impacting the timing of instrument placements and further elongating sales cycles. Recurring revenue was $5.2 million in the first quarter of 2023. This includes $4.7 million of contribution from our optofluidics business and $500,000 of contribution from our proteomics business in Q1 2023. These results were driven by a few large customers working through their bulk purchases from second half of 2022 before our price increases. We remain focused on expanding the install base to drive predictable recurring revenue. Partnership, license, and other revenue was $7.2 million in the first quarter, driven by out-licensing a portion of our non-core IP to a company outside of the cell biology field. With our large IP portfolio, we plan to be opportunistic to license our technology in non-core applications within the life sciences market. Gross profit for the first quarter of 2023 was $13.4 million compared to $13.8 million in the prior year. Gross margin for the first quarter of 2023 was 73%. Operating expenses in the first quarter of 2023 were $36.3 million, inclusive of $4.4 million of stock-based compensation. This includes expenses related to the acquisition of IsoPlexis of $3.5 million and restructuring costs of $1.3 million. As disclosed in our 8-K on May 5th, 2023, we further reduced the headcount of PhenomeX and have taken significant action to achieve our cost synergy targets. Net loss for the first quarter, 2023 was $23.4 million compared to a loss of $21.4 million for the prior year period. All net loss numbers are inclusive of stock-based compensation and restructuring expenses. We are fully committed to rigorously manage our operating expenses and cash flow to achieve optimal cost efficiency. We ended the quarter with total cash of $121.7 million, which includes cash and cash equivalents of $51.6 million and restricted cash of $70.1 million. I'd like to discuss our full year 2023 revenue and OpEx guidance. Considering macroeconomic headwinds, significant slowdown in decision-making cycles for large capital purchases, and our ongoing commercial integration efforts, we expect full year 2023 revenue to be in the range of $75 million-$85 million. We expect our gross margin to be approximately 65%. We plan to reduce our OpEx from approximately $235 million in 2022 on a pro forma basis, excluding transaction and restructuring expenses, to approximately $120 million in 2024. This will re-represent a reduction of almost 50% over two years. A substantial amount of synergy realization is already in place as of Q2 2023. We expect our operating expenses to trend lower through this year. Our current forecasts indicate we would turn cash flow positive in Q4 2024. Please refer to the GAAP to non-GAAP reconciliation in the investor presentation found on our website under the Investor Relations section. As I reflect on my nine months at PhenomeX, we have taken significant action to improve operating cash flow by increasing revenue and lowering operational costs. Our new commercial leadership, geographic expansion, and product roadmap are expected to drive revenue growth alongside the significant cost synergies that are lowering operating expenses as a result of the recent merger. We are also evaluating financing options to strengthen our balance sheet. As we execute against these initiatives over the next several quarters, our 10-Q as of March 31, 2023 outlines factors that raise substantial doubt about the company's ability to continue as a going concern within one year after the issuance of these financial statements. With that, we will now open it up to questions. Operator? Thank you. If you would like to ask a question on the phone lines today, you may press star one on your telephone keypad. To remove yourself from the queue, it is star one again. We'll take our first question from Tejas Savant with Morgan Stanley. Hey, good afternoon, guys. This is Edmund on for Tejas Savant. Thanks for providing the update here today. I appreciate the color on your APAC ex-expansion efforts and initiatives. Specifically looking at China, I guess during the quarter, we've heard a bit from both ends of the operating conditions in China with some companies reporting strong results and seeing benefits from government stimuluses, while others have noted inventory destocking at distributors, along with biopharma funding concerns. I was wondering if you could provide some more color on the operating conditions that you're seeing in China and what the expectations are for the rest of the year. Yeah. Thank you, Tejas, and a really great question. We, in China, as you recall, the traditional optofluidic platforms wh ich was a very successful business in China, is mostly oriented towards biopharma segment. As you recall, until end of Q1, largely, China was under lockdown, and a lot of the activities in biopharma segment have been suppressed. In addition to that, biopharma segment in China is under a significant dislocation in geopolitical sense, from people trying to de-risk the dependence on China as it comes to larger pharma companies and people who are outsourcing to China in general. All of that has resulted into a particular challenge for our business because it does have a significant constraint. It's a $2 million device. Biopharma is under stress. Everybody's conserving capital. As a result, our business has been specifically constrained. The second part of our business, which is the proteomics platform, had similar challenges. It's of course a significantly lower cost point, and we believe that, you know, the business is gonna recover as the year goes on. Just wanted to provide you with the full context of our overall mix and balance from our point of view. I think, you know, we have seen the commentary from many of the life sciences tools companies having sort of a mixed bag of results. You know, we are selling something to an outsourcing client base there which does create a specific constraint for us. Got it. Thank you for that color. I guess looking at your upcoming Quest launch, you guys will start focusing more on the academic end market. Can you highlight some of the strategies that you guys have in place, and particularly how you plan on leveraging Iso's current academic footprint? With all the platform updates provided today, do you have any updated views on the future of the Lightning platform? Great, yeah. Let me start with the first question, and then I'll get to the Lightning question, okay? The first question is how are we gonna use the Beacon Quest and the IsoPlexis original footprint? I think it's a great question. Look, there are many, many reasons why we did this combination. One of them was that both companies had a microfluidic platform, and IsoPlexis's success was larger in academic market segment, especially in the immuno-oncology, you know, academic centers and cell and gene therapy academic centers. Berkeley Lights traditionally was stronger in biopharma because of the two applications that we were most successful with were in the antibody discovery and cell line development, which are bioprocessing related activities. Given that the footprint is already there in a much larger install base with existing relationship with academia, in fact, what we heard over and over again as we did our diligence and as IsoPlexis was conducting their business, we heard from the clients of theirs that it would be nice to have an ability to do what IsoPlexis tool does, which is to able to do the characterization of multiple analyte in the same sample. It will also be great to see if we can actually preserve those cells of interest, i.e., there are many clients who wanna do both types of experiments and that allows us to go to a ready customer base to address that with the needs. We have decided to lower the barrier of cost and launch Beacon Quest to be able to do that. While we are also preparing the company, as you saw in the comments we made, for the next generation platform, which allows us to use the lower cost footprint of the IsoPlexis platform and put all of our optofluidic strength into that platform and allowing us to actually capture that marker more robustly going forward. Hopefully that answers your first question. Given that most of our efforts are focused on making that next generation platform, technically, we are not de-launching Lightning, but it is not something we are focusing on because we believe that our introducing Beacon Quest will solve the barrier or cost problem for customers vis-a-vis Lightning for sure and a lot more functionality. We will be opening Beacon Quest up with all applications possible, including our most recently launched T-cell workflow. There wouldn't be any need for Lightning per se, but if there are customers who prefer that platform for whatever reason, we'll continue to provide that. Albeit, we will not be investing further resources in developing that platform. We are putting all our, you know, commercial and literally most of the technical resources on developing Phoenix, which is our next generation platform. Got it. Thank you for that color. One final one for me, maybe for Mehul. I'm not sure if I missed this, if you talked about 2024 revenue on the call today, but I think at the time of the deal, you guys pointed to a 2024 combined revenue of $100 million. At the midpoint of your guide, that implies about an 88% year-over-year growth for 2024. Is that still the right way to think about it? Well, I think, we guided that we would be at $150 million in revenue on a run rate basis exiting Q4 of 2024 as we break even from a cash flow point of view. That was kind of the guidance we provided, you know, or around 2024. Got it. Thank Thank you for the time today. Thank you. As a reminder, everyone, please limit yourself to one question. If you have additional questions, please reenter the queue. We'll take our next question from Julia Chen with JPMorgan Chase. Hello. Thank you for taking the question. This is Marta Zotova on for Julia. I was just curious i n terms of customer feedback for Beacon Select, is there anything you can share with us? In terms of margins, what does the margin profile look like, and do you have a target margin profile for Beacon Select? I know it's still early, but maybe you could provide some color on the pull-through expectations. Thank you. Yeah, it's a great question. Beacon Select, as you know, we just launched it not that long ago in Q1. Beacon Select cell line development is in the hands of our commercial teams, and they are making a lot of engagement specifically for cell line development application. That is a industrial application, as you know. The question the customers are asking is really the total trade-off they have to do on total cost of ownership, and we are evaluating and further refining our price point. What I could tell you is that the price point for the box itself is going to be lower, as we've communicated already. That will result into a, an erosion of the margin. I think that's what's reflected in our 2020 fully forecast. Even though our Q1 margins were substantially higher than that, we are accounting for that erosion in the market margin going forward. Got it. Thank you. Now that you completed the merger, are there any changes to your capital? Julia, you might have cut off for a second. If you wanna repeat your question? Sorry. Sure. I said now that you completed the merger, have there been any changes to your capital allocation framework post-merger, and what are the main priorities going forward? Absolutely. Look, I think as you know, we have for the size of our company, we have a very large transaction we completed. As you see from this discussion from today, we have made absolutely a very strong progress on bringing the two companies together in all aspects of the integration. Most importantly, the team has had made significantly large and quick decisions on cost synergy targets, which we had said 2023 of $35 million and 2024 of $70 million. In fact, we've completed all the work to reflect the 2023 Q2 numbers to reflect the $70+ million of synergies. We are done with that part of the heavy lift, if you will. Our immediate focus is on now the combined product roadmap, which there's a lot of exciting things we are working on, and commercial activity. As you can, you know, tell, these two companies coming together brings a larger commercial footprint together. Each of the companies was focused on selling a very different segments. This excites our salespeople because we have more things to sell as a combined team, but we still have work to do to train those salespeople into each other's portfolio. A lot of work is going on in that area, but it is not all complete. Our immediate near-term, you know, capital allocation strategy will be to, you know, keep our head down and focus and execute on this transaction while, you know, making sure that we are being opportunistic as the market evolves over the next few quarters. Thank you. As a reminder, everyone, that is, please limit yourself to one question. If you have additional questions, you may reenter the queue. We'll take our next question from Dan Arias with Stifel. Hey, guys. This is actually Evan on for Dan. Actually, I wanted to follow up first on, I mean, really just the last part of your prepared remarks, talking about the substantial doubt about your ability to be a going concern. Just, I mean, based on what you guys have been saying, you know, you know, becoming profitable by the end of next year. I mean, I'm looking at your balance sheet. I mean, it looks like you took on a pretty decent amount of, I guess, the debt was probably from IsoPlexis. You have about $70 million of restricted cash. Leaving, like, $50 million of cash and cash equivalents. Like, so what's driving the, Like, what's the reason behind you having to put that statement in your 10-Q? You know, is that something that is just kind of driven by the SEC, or is that something that we should be thinking about? 'Cause just the idea that you guys will be profitable by the end of the year, by the end of next year, it's just surprising to hear you guys say that. Yeah. Hey, this is Mehul here. I would say the going concern disclosure, and there's the restricted cash classification that you mentioned, are explained very comprehensively in our 10-Q. We've laid out what management's plan is to enable the company to be a going concern. I would urge you to read the footnotes and the disclosures in the Q. I'd love to follow up with you if you have further questions after that. Okay. When do you guys plan on publishing that? Monday. Monday? Okay. I don't know. You guys mind if I ask one more question? Go ahead. All right, cool. I just wanted to talk about, dig into the guide a little bit. I mean, you guys have guided to 1 Q of 0 partnership revenue. Obviously, you guys sold some IP, and got $7 million there. You guys have been guiding sort of, you know, to some partnership revenue for over the balance of the year. Actually it's pretty surprising. I mean, you guys did $1 million of revenue from IsoPlexis in basically, like, a week and a half. I'm just trying to understand, like when we think about this guidance I think it was $75 million-$85 million, can you kind of parse that out between, you know, legacy Berkeley Lights and then IsoPlexis? Then within the Berkeley Lights part, like how are you guys thinking about partnership revenue? Just to get an understanding of like, you know, here's the base business of Beacon/ our new products, how that should look for 2023 versus kind of the all the other parts. Thank you. Yeah, it's a great question. Let me start by reminding you that when we did the transaction announcement and subsequent to that, we also had various different discussions with investors in which we've always maintained that we will provide the guidance at the end of Q2 or sometime in July or August timeframe. What we were able to do was to do a much faster integration, and we were able to put a range in sort of our own internal forecast around both of those businesses. We thought it's best for us to actually provide a guidance based on what we see right now, so people can fully appreciate what the business opportunity is. When we provided the guidance, we took few things into consideration. One, the macroeconomic headwinds that we are experiencing and everybody in life sciences industry experiencing specifically with respect to biopharma segment. The second thing is the slowdown in decision-making cycles for very large capital purchases. We have been experiencing this now for last two or three quarters. It's not that people aren't buying things, they're committed. What they committed in Q3, they bought in Q4, and what they committed in Q4, they bought it in Q1. So we understand this lengthening of the large capital purchases continuing to happen, and we took that into account as we looked at our forecast. The third thing is ongoing commercial integration effort that we are doing, which of course, is a significant strength in the mid to long term in the company. In the short term, it is going to provide some disruption as we cross-train people and change their geographic territories to focus on specific areas that they need to focus on going forward. All of that gave us, you know, a range. There's puts and takes on the range, and we're not going to go into details today about each of our portfolio to see sort of where we have strength and where we have weaknesses, because in both cases we have both. We've provided a range that we can be comfortable providing to you today. As we move forward and have one full quarter of commercial execution under our belt, we'll be able to provide a lot more detail at the investor day we plan in August. As we had committed. We just thought that it is much better for us to have a forecast in front of you right now and then we can provide more color on how you can model the business going forward. This is the best we can do today, given we are still very early in integration. All right. All All right. Super helpful. Thank you. We'll take our next question from Steven Ma with TD Cowen. Great. Thanks for taking the questions. Given the lower price point, is the Phoenix intended to replace IsoSpark and IsoLight? Secondly, what gives you the confidence to get the Phoenix COGS down? Is that dependent on any new foundational technology being developed? Or do you have all the pieces together already and you just need to do the engineering? Yeah, Steven, that is a fantastic question. Ever since I've been on here for four quarters, my number one goal has been to figure out a way to lower the cost of goods sold for our technology, especially the capital part of our technology. We have been searching for every single component that could be reduced in a cost structure. I'm gonna give you a little bit more detail, so you can understand sort of what has been completed and what is the work that still remains to be done. If you recall, the Berkeley Lights Beacon platform, and I'm gonna, going forward, call it PhenomeX optofluidic platform, actually was developed eight to 10 years ago. The components that are used in that were sourced that many years ago. As a result, as such, if you look at open the box, there's what I call a lot of empty space in that box. It was designed for a specific application and launched in that sort of eight to 10 year old supply chain, if you will. Since that time, the optofluidic R&D team has been extremely active in lowering the cost of goods sold for various reasons. Number one, Lightning was their first attempt at lowering the cost structure of various different components. If you look at the footprint of Lightning, it is actually much lower footprint than it is for the Beacon platform. With IsoPlexis transaction, we got access to a much more friendlier, if you will, a platform in terms of the box design, the software design, the user interface, and everything that goes with making a life sciences tool a benchtop device that is intuitive to use by customers. We got a lot of strength from that. Both technologies were actually microfluidics-based technologies, so the internal components and the guts are not identical, but similar. For the last four months, so actually beginning in December when we signed the deal till now, our teams have been intently figuring out and de-risking component by component what could go in that new device. I wouldn't say that everything is completed, but where we sit today gives us a significant confidence that the COGS reduction is not going to be a hurdle for us. It still remains to be seen on how many different pieces we put into that box and provide how many different models of that box with what kind of features, and there is still work going on in making it more modularized compared to what we are at today. The technical de-risk from a cost reduction perspective, I would say, is 90% complete right now. Hopefully this give you a bit of a color around why we are doing what we are doing. Again, I remind you of the fact that the box itself is the main cost, and there are some components in the box that are driving a majority of our cost. We believe those components cost could be reduced. We also acquired with IsoPlexis a significant manufacturing capacity, which allows us to manufacture these things within our own shop. That allows us to lower the cost even further compared to the supply chain costs that go into making of the box. Okay, great. Thanks. That's all for me. We'll take our next question from Mark Massaro with BTIG. Hey, guys. This is Vidyun on for Mark. Thanks for taking the question. I think we just heard from a few companies about longer sales cycles and lower capital budgets in the cell and gene therapy space. Could you just remind us maybe the mix between your customer base in terms of the smaller to mid-size biopharma versus larger players? Thanks. Vidyun, that's a great question. Again, you know, if you recall, both companies are relatively new, in terms of legacy companies and the products. As a result, most of the early transactions were done with either the large biopharma, which are the, the companies with the strongest need, desire to want to invest in the new technology as well as have the cash available to do so, and the strongest academic centers which had the funding available to go after this innovative technology. Having said that, our next level of job just got harder because that smaller biopharma segment, the small to mid biopharma segment, got themselves under a cash constraint world, which is what is reflected in our new forecast. We believe that segment is gonna continue to have challenge in large capital purchases, and that is what we reflected in our forecast. Okay. That's it for me. Thanks. We'll take our next question from Gaurav Kapur with Berenberg. Hey, guys. How's it going? Thanks for taking my questions. First, you know, on the placements in the quarter, what was the mix of the, I think you said, Mehul, four optofluidics placements? You know, were they all CapEx? Were they all for the Flagship Beacon? You know, maybe any subscriptions or, maybe even Beacon Select placements. Just any color on that would be great. Yeah. How you doing? Of the four, you know, Beacon placements, three were, you know, capital purchases, and then one was a reagent rental unit. Got it. Thanks. Yeah. you know, just kind of wanna, you know, looking forward on the workflow side on the back of the new T cell profiling one, you know, apologies if I missed this, but, you know, have you disclosed any further areas where you plan to develop, you know, future workflows in to complement the, I believe it's five areas that you have right now? I think everything we've disclosed in this call is our current plans. I don't know what you imply by anything else. You can see our plate is full with all the different things that we are doing right now. On workflow specific, like, you know, you just said the T-cell profiling workflow and development, right? I guess maybe if I missed that earlier. Yeah. If you had a roadmap just on that specifically. Yeah. Let me invite Rolando Brouwer, who is gonna provide the complete description of T-cell profiling workflow and then, where and how it's evolving and what type of customers. Actually, quite diverse type of customers are interested in that workflow. Rolando? Yeah. Yeah. The T-cell multiomics workflow on the Beacon allows the profiling of thousands of T-cells to be functionally profiled for their ability to secrete cytokines, kill antigen-presenting cells, and then retrieve selected cells for further analysis, including mRNA and DNA sequencing. That one-sentence description of the workflow attracts very different type of customers, from, for example, in the context of cell therapy, our platform could be used to profile T-cells prior to CAR engineering and after engineering to functionally study what proteomics, transcriptomics, or genomics features can predict clinical success. It's also a workflow that has, I believe has a place in basic research, in translational research. The combination of the launch of this workflow together with our combination with IsoPlexis in Quest to penetrate the academic market that wasn't available to us to virtualize before for the optofluidic platform makes the total package of how this new workflow can be utilized. Awesome. Thanks for your time, guys. Appreciate it. We'll take our final question from Matt Larew with William Blair. Hey, good afternoon. Just quickly on the guidance. Appreciate you're not gonna break down sort of optofluidics plus proteomics, but can you let us know, is there any other additional IP sales or licensing contemplated for the balance of the year, or would the rest be just what you would think of as core revenue? I have a follow-up. Yeah, maybe just to provide you with sort of the approach that we took for guidance. We are not gonna provide details on sort of, you know, where the different things come from because we have some ups and some downs, as I said. Yes, we are contemplating further, you know, what I would call licensing arrangements. Not necessarily the kind that you saw in Q1, as you recall, most of our business is now pure play life sciences tools business, you know, instruments and recurring revenues. We do have previously completed work for clients in the services that we have performed. We are ongoing, providing, you know, more and more work that is required and, looking at making sure that there's gross margins available in performing those services going forward. You might see some more partnerships, licensing, and other revenue as well. We're not gonna provide specific details. I think as we look at the balance, we feel very confident about the guidance that we provided. Okay. Mehul, just in terms of the Q4 2024 positive operating cash flow, you sort of gave us the revenue run rate. You gave us the OpEx run rate. I think it would sort of imply, you know, gross margins improving from the levels you're suggesting in Q3. you know, what's contemplated in terms of the cadence of this year, given the step down and then the components of the rest of sort of that operating cash flow? What's contemplated for gross margins? Yeah. I don't think we're ready to guide on gross margins, you know, 6 quarters out yet. Obviously, as you know, it'll be driven by the product mix and the geography mix that we're selling. You know, we have indicated, right, as we exit Q4, we'll be on a, you know, run rate to achieve $150 million in revenue and be, you know, cash flow break even, right? I've kinda given you the OpEx piece. You have the revenue piece. I think you could model for gross margin. Yep, we can. Okay, thank you. Just to provide a little bit of more context around that comment as well. Look, we are integrating the operations of these two companies and making sure that all the new operations footprint is able to provide that gross margin lift that we would need to have in the Q4 2024 timeframe. This is why we are not gonna provide sort of detailed comment that's in our integration plan. We believe that all of our plans imply that we will be able to get to that cash flow breakeven in the Q4 of 2024. As you can tell from our operating expense reductions, that we've brought that threshold at which we can become cash flow neutral or positive, I should say, to a much lower number than what we have had in our P&L before. Okay. Thank you. Thank you. This does conclude today's presentation. Thank you for your participation. You may now disconnect.