The next company to present is Alpha Teknova. With us, we have the CFO, Matt Lowell. As always, it's 30 minutes. There should be some time at the end for Q&A, so if you do have a question, you can type it into the question box at the bottom of your screen. With that, it's all yours, Matt. Okay, great. Thanks, Jim, and appreciate the Sidoti team for having us here. Our CEO, Stephen Gunstream, wanted to be here, but unfortunately he's got a customer visit, so was not able to join today. But thank you all for your interest in Teknova. My name is Matt Lowell. As Jim said, I'm the CFO of Teknova. I've been with the company for about three and a half years. Joined a few months prior to the IPO we completed in June of 2021, and very excited about the opportunity for our company going forward. So I will give you... I've got some slides here, and they are posted to the conference website. I will not be covering all of them or going through some of them fast, but I'll leave time at the end for Q&A for those that have questions. So let me just tell you a little bit about our company. We are Teknova. We are a reagents provider to the healthcare community. We serve the life science industry, primarily therapeutics companies, diagnostics, and other life science tools companies. And when I say we're a reagents company, we're basically, we make liquids, right? That are used to manipulate cells, both during the discovery process for discovering of new therapeutics or diagnostics and all the way through production level, and further into commercialization. So we are, we report our segments into two parts. There is the Lab Essentials component of our business, which are the products that we make under research use only grade, and then also the Clinical Solutions products, which are made under a GMP or good manufacturing practice grade products, and are used for either in clinical trials or all the way into commercialization. What makes our company different is that we are very skilled at manufacturing custom products. We have a catalog part of our business, but our real differentiator is in the custom products that we make. We are able to support customers, as I just mentioned, from the early stages of discovery all the way through commercialization, and we do that by making custom products, and we do that in small batches, whereas some of our competition are not able to do that in the timeframe that we do. We have a fast turnaround time promise to our customers, and we've even just launched a new product that kind of further enhances that capability. Just to let you know, this company has been around since 1996. It was founded by a scientist at Genentech, and he built this business on his own without outside capital. Grew the product portfolio for a long time until 2019, when he sold a majority interest in the company to the current owner, majority owner, which is a private equity firm called Telegraph Hill Partners. And since then, we've been making investments into the company to pursue the growth strategy that we have today. We have three, I guess, primary prongs to the growth strategy, and have since the IPO, and we've stayed true to that promise from several years ago. Number one was to build additional manufacturing capabilities that were purpose-built for custom manufacturing, and we've done that. We invested roughly $40 million in a new facility, and we have been now running that since the end of last year. Matt? Yes. I'm sorry to interrupt you. Please. The slides aren't advancing, just so you- Oh, yeah, sorry. Let me get to this. Thank you. Thank you for reminding me, Jim. This is just an intro slide. So, I did want to talk about this, briefly about this custom manufacturing facility, 30,000 sq ft, and it meets the latest and greatest ISO 13485 certification, which allows us to make GMP products in this facility, important to attracting new customers. The second thing was to build a commercial team and expand our commercial capabilities, and we've done that. We've added people in the field. We have account executives here at the home office supporting them, and we also have a marketing function, which we didn't have before. We've, you know, rebranded the company, updated the website, and done other great things like that, and got a lot of messaging out there in different platforms. And then the third piece of the strategy was to develop some proprietary products, as the company had not had a strategy of making proprietary products, mostly making what customers ask us for. We came up with some solutions, in particular for customers in the cell and gene therapy area, that are using viral delivery for their therapeutics and some neat things there. So, I just wanted to highlight the strategy and the background of the company. As you can see from this intro slide, we also have a very broad customer base, 2,500 customers across the industry. That's as I'll show you on the next couple of slides in a lot of different areas, so very diversified. But we also have about a 23% of our revenue exposure to cell and gene therapy market, which is an area we're particularly excited about and well-suited to serve. I've already touched on the history here and a little bit about our past. We are, at this point, having made a lot of the investments in the last several years and since the IPO, kind of poised to grow and to increase profitability from here... and we, as we'll demonstrate with some of the targets that we have here, we think there's a strong growth and margin potential here going forward. I mentioned about our products, just a little more detail about what products those are. On the left are the four product types that we classify. So there are pre-poured agar plates. This is typically for research use only, but a very broad customer base and kind of an entry-level product for our customers. There is microbial culture media, which is used to grow cells and increase cellular activity. We are particularly good at bacterial cell culture media, which is important in certain end markets. We have buffers and reagents. These are used for, as it says here, routinely manipulating samples and cells and for purification, transfection, other things like that, and we have a very broad portfolio in this area. And then lastly, we have proprietary products, as I just mentioned. This is a newer part of our business, where we've actually developed some of our own IP and are sharing that with customers through these new products. On the right side, you can see who we sell to. I mentioned the 2,500 customers. It's a very broad, broad-serving products. It's basically a picks and shovels type of products. You can think of it that way. Everybody needs them in some shape or form, you know, in different parts of the life cycle. Everybody from, of course, you know, big pharma and biotech companies, the partners they work with on the manufacturing side. We do serve, to a small extent, hospitals and academia, and then we also have a significant customer base in life science tools and diagnostics. And the application side, you can see, are also far-ranging, from therapeutics and the bioprocessing of those therapeutics, diagnostics, new areas like synthetic biology, liquid biopsy, proteomics, other things like that are all part of what our customers are doing, and we support them. One of the things that, we think is important to know about our business is that it's well-suited to address some of these emerging areas and why we've talked about cell and gene therapy. There are this kind of move towards customized or personalized medicine has increased the need for customized products compared to the kind of the previous generation of medicine, which are still built off of, you know, blockbuster drug-type platforms and require huge quantities of liquids, of the same type of liquids. There's a need for customization even more so, and because we spent the first, you know, 20+ years of our existence serving exclusively the research market, where custom products were the norm and needed, now that that has evolved more into the production side of the business, the bioprocessing side, those capabilities are now particularly in demand, and we have a platform that is essentially custom-built to deliver custom products. A little bit about our differentiation. Again, there are other larger companies that are very good at making large quantities of liquids, and the same liquids, and putting those into inventory and making them available to customers. They're not very good at pivoting to customized type of products, and particularly those in small level- smaller batch sizes as we offer, and, that is really where we stand out from, the larger competitors, as well as some of the smaller competitors who are not able to offer both RUO research-grade and GMP clinical-grade products. I'm not going to spend much time. I have a couple of slides here, just kind of showing the menu of how we can- how we customize, basically, and on what types of dimensions through all steps of the process of manufacturing, whether that's the vessel size or type that we manufacture in to the, formulations itself. There can be custom formulations. Then, for the sterilization step, differeont means to sterilize different products, and then what we dispense them into and how we dispense, whether it's manual or automated, and we do tubes, bottles, and bags. So these type of capabilities are attractive to a broad customer set, and and we have some slides in here that kind of show how that would work. So, for example, on this slide here, you can see on the far left, this is a RUO or research product. A customer may start out early in development with this type of request from us in a smaller size, using a certain sterilization method and dispensing into bottles. And then fast-forward later down the clinical pipeline, they may now need a GMP-grade product made in higher bigger quantities and dispensed into bioprocessing bags, as another example, with different set of QC tests. So it's kind of a menu that customers pick from, and of course, if they have other things that they want us to look into, we're able to do that as well. I already mentioned about a couple of things that differentiate us. One of the key things is the turnaround time for customized products. For customers, that typically is a month's process, and we're talking about 6-9 months these days, and it was longer, you know, in recent times, especially during the pandemic. We've always been able to deliver with turnaround times in weeks, and that's a huge advantage to many of our customers, particularly those that are moving through clinical trials, and they need products as soon as possible to be able to continue their work and advance their science. So this is just a case study of a customer that came to us in the November timeframe, this was here, and we had discussions with them that led to a quote in early November. We finalized the product configuration with them, and by November 18, we'd received the PO. We were in production in mid-December, and through with that in a matter of days, and then there's a QC wait hold time, and the product was ready and shipped to the customer by the end of January. They were trying to get this product in time for a clinical build they had scheduled for February, and their previous supplier had indicated it would be at least 6-9 months for them to be able to get that product for them. So that was a great win for them, and we were able to win this customer over, and they've continued to stick with us since then. Here we talk about a little bit of that, working with customers from that very early stages of research. They may start with a catalog-type product, and then as they advance their work, they're looking for customized products, and then to move those into the higher grade clinical or GMP-grade products, once they start clinical trials and go into commercialization. For us, the economics are pretty simple. For our products, customers that only order catalog products, you can see in this middle chart, we benchmarked that as 1x. Customers that also order custom products from us will spend on average 19x as much. This is from 2023 data. Those that purchase GMP products also from us will order 62x more than catalog products. So the key to the story here is moving customers through from that early stage using catalog products into the custom and eventually GMP-grade products, and that's what's been happening in our business, and the chart on the right goes through some of the numbers. The other point I've mentioned about that differentiates us is our ability to offer customers what they want in the sizes that they want, the scales that they want. You can see our sweet spot here is in the 100-liter to 1,000-liter batch size, whereas many customers, particularly the large suppliers, are in the 10,000-liter level or even higher batch size for their customers. This has been particularly attractive for these cell and gene therapy companies, who are not making or in need of large quantity for their use. And as you can see, we've been attracting those customers both through the field sales force that we have, and the marketing and also the science that we've now been putting out there and been engaging with these customers more. You can see here that we've been able to grow the number of cell and gene therapy accounts. In 2023, that was, again, 23% of our total revenue. And the number, and maybe one more important thing, on the very top, the band of GMP customers, and, given what I've said about the average spend size, you can see that we've been attracting more and more of those customers in Cell and Gene Therapy and in other areas as well. So I've got a little section on Cell and Gene Therapy. I'm actually not gonna talk about this, but needless to say, it is the kind of next generation of medicine, we believe, and it is an area that we're focused on, and our capabilities are well-served, well-suited to serve. I'm gonna skip through a couple of these slides, and talk about some of the other things that we've done in a little more detail since the IPO. I mentioned about those Clinical Solutions customers that are an important, I guess, forward-looking indicator for us. We are moving customers from the research-grade products into Clinical Solutions, and it's only been a few years that we've been in that business. We got our certification in 2018, first customers in 2019, and it's been a bit of a ramp-up since then. But we, over the last 3 years, as you can see, we increased from 13 of those customers to 34, and we did just report with our Q2 earnings a few days ago, that as of the mid-year, we are actually up to 43 of those customers. So we think that is a positive sign, and we'll see these customers continue to move through clinical trials and increase the amount of business with us. The facility, as I mentioned, is a big accomplishment for our team, and we're very proud of it. It took several years to build, and now we have it. We can make a wide array of products in here, but most importantly, it's a very good selling tool for us. I mean, and it is important for customers to see all the latest technology that we've implemented here and, of course, all the systems and control processes that they expect from a GMP facility like ours. We have launched some new products. One of the investments we made was in new product development and proprietary products I mentioned earlier. The first one of those was a suite of products called AAV-Tek. It was specifically designed for customers in the cell and gene therapy space, excuse me, in the space of cell and gene therapy that are utilizing viral vectors for their delivery of their drug. And this is, it was well-received by the community, and it's, more importantly for us, it's been a great way to engage with both existing and potential customers to talk about science and the capabilities we can offer as they scale through clinical trials and into commercialization. We've continued to launch other products, and this is a high-level schematic of some of those different products that we've launched. We've also added some companion products for customers that are using viral delivery. Just last quarter, we announced the launch of Build-Tek, which is a solution for single bottles, making those available in a fast timeframe, particularly for researchers that are currently making things themselves to try to address that portion of the market. And then just this week, we announced two new service offerings, Manufacturing Grades option, where it's something in between this research and clinical grade that is appealing to customers that are moving through that continuum as a stepping stone that gives them some more of what they want before they get to GMP. Then lastly, we have the Express-Tek. We're already known for our fast delivery times, but for those that want it even super fast, you know, for a service fee, we're able to offer even shorter turnaround times to them when it's appropriate to do so. We've got a great team here. As I mentioned, Stephen, as our CEO, not able to attend today, but he's assembled a great team here, with experience in the industry and with the company, and we're very excited about the opportunity here. I guess the last thing I'll just mention before turning over to questions is that we've put a couple of markers out there for folks to track our progress financially. One of them is that we believe in the $50-$55 million range of annualized revenue, that we will switch to adjusted EBITDA breakeven, as we're currently in a loss position right now. And we also, thankfully, with the support of our largest shareholder, raised a little over $15 million last month that we now think will bridge us to cash flow positive as well, and we've laid out the assumptions for people on that, and are very excited for that last round. So that's all I'll do for now. I'll stop there, Jim, and you know, leave it to questions if there are any, or any go deeper in any areas, happy to. Great. Thank you. Thank you for the presentation. So, you know, how many customers do you start out with on the research side and stick with all the way through commercialization? Yeah. So just to to answer your first question, we have over 2,500 customers in general, and virtually all those are ordering some type of Lab Essentials product with us. On the very other end, which is in this Clinical Solutions category, we just said that we have 43 now, right? So only 43 of the 2,500 are in this GMP phase. There is a potential for a lot more to move into that category of Clinical Solutions. Not every customer is eligible or will need to, or will survive long enough to do that, and that's okay. But there are still, we'll just say in the order of magnitude of hundreds from that pool of 2,500 that have the potential to to eventually be Clinical Solutions. As those customers ramp up, is the new plant big enough? Do you have capacity to handle that? Yes. In fact, that, that is actually one of the, you know, main points of building that facility, is to make sure that we have the capacity to grow with customers as their volumes increase with us. You know, we are not, as I mentioned, in the, in the business of, you know, delivering 10,000-liter batches to customers, but within our target markets and the volumes that they'll need, we believe the new facility will, will provide everything that they need. Can you talk about the state of the biotech market now? I know that that's tends to be, you know, up, has its ups and downs. What- It certainly has. Yeah, we- Where are we today? Yeah, it's been... I think it's no secret to folks that are following the market, that it's been a tough market after a very brilliant market during the pandemic. A bit of a tough market for fundraising for biotech companies, which is, you know, a big part of our revenue base. And for the last two years, funding has been constrained. I guess, both externally, from external data that we can glean, the first quarter of this year was a strong or at least a bounce back, if you will, in fundraising for many of those companies. And Q2 has been also better than last year, though not as good as Q1. But there are signs that the industry is emerging and that the funds are being made available to these companies again, which, given the nature of our products, they will wind up spending something with us. What we found historically, Jim, is that there's typically a four-quarter lag from when there's a fundraising event to when that might materialize into revenue with us. And so that bodes well for the future. We're seeing some, you know, improvement in activity from last year, even though we're projecting flat year-on-year revenue this year at the midpoint of our guidance, but things seem to be on the up. Can you talk about the product mix between the catalog products and the custom products and the margins on those two businesses? Yes. So first of all, we don't report exact numbers on the mix of catalog and custom. Our segments are the research or lab essentials products and the clinical or GMP products. And it's about an 80-20 mix there, give or take right now, with the smaller part being the clinical, of course. Within that 80% of our revenue of research products, that's where the catalog products fall, and I would say, you know, let's just say that the majority of that revenue is catalog, more than 50% of it. And as you, I guess, may be hinting by your question, there is a margin pickup between when customers move from that research grade to the clinical grade products. The margins are higher. It is a higher grade product. There's more effort to make that product, but we can charge more for it as well. And the unit economics tend to be favorable on the GMP products because they're made in bigger quantities. You know, we're selling things in bags, you know, 50-200 liter bags sometimes versus, you know, 1-liter bottles, and that just is better unit economics. So we don't have a gross margin report, you know, on that in our 10-Q, but I will say from a, I'll call it a contribution margin, which is before certain costs, so just keep that in mind. We have about a 60%-80% after materials and certain labor on our GMP versus 40%-60% on research in a comparable fashion, that kind of, roughly that kind of difference. And you talked about some new products that you're launching now, the AAV-Tek- Mm-hmm ... and the Build-Tek. Yeah. How long does it take for those sales to ramp up? And, you know, are those products, you know, 'cause you have so many products. Are any one or two products- Mm-hmm ... like that, are they significant enough to move the needle in terms of the growth rate? At this point, no, right? These are still relatively nascent efforts. It does take some time for these products to, you know, gain hold and traction, and that's okay. We are not counting on them to be near-term contributors. I do think in the longer term they will be. What it has done for us, and one of the main reasons why we've launched these products, is to get into discussions with the right contacts at our customers that are, you know, building the science for manufacturing these products and eventually commercializing them. So it's allowed us to have more meaningful conversations with existing customers, and move the conversations from some more of the purchasing people that we historically dealt with on the catalog side, into the scientists who are developing the scaled-up processes for manufacturing. So in that, in that respect, it's been a huge success, very engaging with customers, but financially, I think we're gonna have to wait a little while on that one. How do customers find you? You know, you, I believe you said you had direct distribution in the U.S. How big is that? Well, so, there's a number of ways customers find us. First of all, we do use some of the larger distributors in the life science space for our catalog products, so we do have a broad access through them. Although we drop ship our products to these customers, so we know who they are. And it's a good way for us to get exposure through these existing networks. Our direct sales force, or our people in the field, I should say, because we also have people at home doing sales activities, but those are targeted primarily at cell and gene therapy customers, or other customers that are going through this clinical pathway, and that tends to be a smaller subset, as I indicated, of the larger customer base. So we can focus our efforts on those, and we've done a lot of outreach with this new field sales team, as well as marketing activities and the science that we are now publishing to get engaged with them. That's been our strategy. Right. Then, last one is, you mentioned you did do a capital raise. Mm-hmm. I believe it was $15 million. Any sense on timing? You said... I know you said that that was enough to get you through cash flow breakeven, but any sense on when that occurs? Right. Yeah, it really depends on your assumptions, and we have laid out actually our own assumptions about what it would take, and that's basically what it would take is using our historical growth rate of 13% over many years. If you take that growth rate and extrapolate it out, you have a pretty high fixed cost base through which profits are dropping through at 70% margin on incremental revenue. So there's a high drop-through of profits on new revenue, and then we hold the OpEx to low growth and a modest amount of CapEx, $2 million a year plus or minus. Those are our assumptions about getting to cash flow positive. The one marker we have put out, this is not time-based, Jim, is that when we get to $50 million-$55 million in annualized revenue, that should be when we turn adjusted EBITDA positive, and then- Yeah ... cash flow positive will be shortly thereafter. But we're not putting a particular date on it, but, but we do have a pathway there. All right. Great. Great. Well, we are out of time, so I just want to say thank you again, Matt, for presenting, and hopefully we'll, you know, hear from you again in the next few months, get an update. Perfect. Thank you. Thank you, Jim, and thank you, everyone, for attending. Thanks.