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Welcome, everyone, to this session of our September 2026 Small Cap Conference. I'm Alex Handman, and I serve as an Equity Research Analyst here at Sidoti & Company. Today, we're pleased to be in conversation with President and CEO Robert Svignezzi and CFO Shawn Worches of Rapid Microbiosystems, ticker RPID. During the presentation, please feel welcome to submit questions using the Zoom Q&A interface at the bottom of your screen. After the presentation we'll open to your questions. And with that, Rob, I'll turn it over to you. Thanks, Alex. Again, good morning, everyone, and thanks for joining us. Again, I'm Rob Spignesi, President and CEO, and I'm joined by Sean Wurchis, our Chief Financial Officer. So what we'll do today is I'll start with a brief overview of our business to give you a high-level sense of our business and what we're doing. We'll get a little more into depth into our customers and our products and our technology. And then, as Alex mentioned, we'll have some time for some Q&A. So with that, we're going to start with a brief dive right in. So 2025, think of us as a $34-ish million business growing at about at about 20%. It's important to note, and this will become apparent as we work through our discussion today, our business model has a strong component of recurring revenue. So greater than 50% of our revenue is recurring in the form of consumables. And we'll walk through how that works as well as services. So 2025, around $34 million in revenue and growing about 20% So globally, we have a large number, relatively speaking, of systems placed and growing. So about 200 systems placed around the world. We'll go through our customer footprint and also installation network, and we'll show you where they are. It's important to note, though, while 200 is a significant number, we're just barely getting penetrated. If you converted the market for GrowthDirects, all the test volume into GrowthDdirects, it's about 8,000 to 10,000 systems globally. So we're just getting started and penetrating this market. Around 169, 170 systems validated. This is an important metric. Validation is the point in time in which our customers, typically a pharmaceutical manufacturer, puts the system in what's called routine testing. and it becomes the actual system of record for that pharmaceutical company, and we start generating the high rate of recurring revenue, largely in the form of consumables and recurring services. We operate globally across 20 companies, fantastic customer base, and again, we'll show you who they are in a few slides, but from a high level, we're very proud to count 75% of the global top 20 pharma companies as customers, And the vast majority, pretty much all those cases, were just getting started penetrating their global networks. It's important to note that we address all manufacturing modalities and pharmaceutical manufacturing, but we're especially strong in the higher value advanced modalities of biologics, cell and gene therapy, et cetera. And as you can see here, we have 86% of the FDA-approved commercial CAR T manufacturers are using a growth direct to release their valuable therapies. So looking forward, we believe we are very well positioned to continue to grow and expand our margins. So it touches on strong business fundamentals, 200 systems placed and growing with a very strong, durable recurring revenue model. We continue to expand with existing customers across their enterprise and have many new customers in our pipeline as well, some of which have multiple system opportunities. Touched on the recurring revenue model, very powerful model where we place our growth direct system and pull through a high rate or a high yield of increasingly profitable, consumable, and service revenue. you. A gross margin is a very, very important story for us. It's our margins are inflecting and we'll walk you through that, but we continue to inflect our margins higher. We have a very exciting relationship with Merck Millipore Sigma with regard to global distribution and the ability to supply rapid micro and drive and accelerate our gross margins further and opportunity to collaborate on innovation and new product development. We are very well positioned to capitalize on the global trends across pharmaceutical manufacturing. One of those is reshoring of manufacturing into North America. We were well positioned to help automate those sites, and it's our belief the vast majority of those sites will be heavily automated. But more broadly, the advent and the penetration of AI and automation globally, we're very well positioned to take advantage of those trends around the world. And importantly, we have a disciplined approach to capital allocation and growth and profitability, driving a declining cash usage year on year and driving the cash flow positivity by year end 2028. Now with that, we continue to actively evaluate opportunities to strengthen their balance sheet and with that maximize shareholder value. So that's a bit of an overview. We can double click now into the business itself. So think of us as solving a problem, as I touched on, in global pharmaceutical manufacturing, in the fundamental quality control infrastructure. We're targeting in an area called microbial quality control. So this is a process that all pharmaceutical companies have to do is regulated by the FDA and all the equivalents globally. It's a high volume testing process that's fundamental. Its fundamental job effectively is to ensure the finished pharmaceutical product is safe for a patient and it's not contaminated by bacteria or mold or fungi or other organisms. The problem with the legacy method is it hasn't evolved since it was created about 100 years ago by Louis Pasteur. It's very much a slow, manual, petri dish incubation type of system. It's creating costs and risks for the industry and in some cases can hold up delivery to patients timely. So we developed a technology that fully automates and replaces and accelerates that fundamental process. and really brings it into the 21st century. This slide shows thematically and more from a strategic level the problem we're going after. I think we all can agree that technology and advancements have dramatically impacted how we discover drugs and how we screen and perform R&D upstream in the process and, of course, downstream how we manufacture pharmaceuticals and various therapies through the advanced modalities and advanced manufacturing techniques. But fundamentally, the underlying quality control infrastructure hasn't changed as I touched on. It's still very manual, slow, and error prone. And you have this incongruent tension between the balance of the value chain and the fundamental QC process, which is critical to releasing life-saving, saving, in many cases, life-saving therapies to patients that are of high quality. And this is the center of this picture, the black and white elements, is this is what we're going after. I'll be quick here for those of you who have never been inside a microbial quality control lab in a pharmaceutical company. This is what one looks like. Imagine a scaled up, you know, times 10 people, in some cases, 100 or more, depending on the size of the company and the number of therapies being, and scale of therapies being manufactured. But in any event, what you'll see is a lot of people, papers, pencils, pens, petri dishes, incubators. And the way the process works quickly is these technicians will take these petri dish, there's various forms and flavors, but it's basically a media type petri dis and perform testing, air testing, water testing, personnel, manufacturing everything gets tested comes back to a large room that's an incubator you can imagine the shelving all around it and all these petri dishes are stacked up and then the analyst will come back a week or two later and and manually count each and every petri dish by hand and this could be hundreds per day at a site or it could be thousands of tests per day per site so very high volume. As you can probably tell, it's a very manual, error-prone approach, usually paper-based. And this is the fundamental underpinnings of most quality control operations around the world today for pharmaceutical manufacturing. Again, this is more at the deck plate level. This is the problem that we are addressing. And we're addressing that through the Growth Direct platform. so the platform itself consists of the growth rec system as you can see here on the left it's the only fully automated high throughput system available and that this this this full automation is extremely important where it's a walk away system and I'll walk through the workflow in a minute so the system as well as the proprietary consumables which is part of the platform so we design the system in our consumables to automate the vast majority of daily routine use testing. So don't think of the Growth Direct as a niche or exotic test that you do once a month or once a quarter. This is designed to be an everyday workhorse that's automating the vast majority of the daily routine standard tests. Every day in a microbusiness, we have multiple systems lined up, all working through very, very high volume. We also have a full data and software complement, and this interconnects the Growth Direct to the customer's information management systems to seamlessly and securely activate a paperless environment to transfer data to and from the various systems and the Growth direct. and global validation and support services. This is very important for Big Pharma, where you can install, seamlessly install, validate, and move the system into GMP, as they call it, manufacturing seamlessly, which we do seamlessly and effectively. The system itself delivers a very strong value proposition. So the right hand, the right side of this slide shows you why customers adopt in the first place. The first of which is data integrity. Again, this is the fundamental element of can we trust these samples? And the regulators are enforcing increased data integrity guidelines, and our system allows us to be fully compatible with the guidelines. operational efficiency is a important part of the hard dollar ROI for our customers. So think of this as the system is fully automated, walk away, it's also rapid. So, think of a system that is replacing a legacy slow two-week process with a leaned out workflow that basically entails taking a sample, putting it on the machine in bulk format, and then walking away. And that's the last time a human being will ever typically see that sample. And we're able to deliver an answer in half the time or less, in some cases, a day or two versus a week or two. So customers can find problems faster. They can move to the next processing step faster.They can ship to market faster. They can turn inventory faster. This just creates a significant manufacturing and quality control environment. And then accuracy and insight. There's certainly an error rate associated with the legacy method. And ours is a computer AI-driven, algorithm-driven system that eliminates human error. So this is the platform. And again, the fundamental reason and why customers adopt this from a value proposition standpoint. Next slide's coming up, I think. There it is. I'll just go through this quickly. Again, this just reinforces my comment around we automate. Think of the growth threat as a high-capacity, fully automated, high-throughput walkaway system that automates. It's the workhorse of the lab. It's an absolute workhorse. It's designed to, again, automate all the tests that these labs do day in, day out. Those are typically environmental monitoring, testing, high volume, testing of the environment, the air, the surfaces, the personnel, water testing. As you may imagine, a lot of products, water is a large factor of input, making sure the water is not contaminated is critical. bioburden testing is testing the actual product itself as it moves through the various processing steps. And then sterility testing, this is a critical end-of-line test to ensure the final vial or delivered syringe to a patient is in fact sterile. And these are the main tests and we automate all of them. And this shows basically what we've been chatting about here, the from and two workflow on the top side of the slide. It's the legacy method. I won't go through all this. We gave it a bit of a rundown of it, but a very manual 15 plus step process over the course of a week or two, you know, very insecure paper pencil driven, a process that gets you an answer that in some cases has some questionable data integrity to our approach when our system goes and worse, basically a two-step process, full walk away with very robust data integrity and accelerated results you can trust to make a decision against. And our vision of the new value chain in pharmaceutical manufacturing, again, replacing that legacy centerpiece, a legacy quality control challenge with a fit-for-purpose this 21st century capable, fully automated system that is on par with its peer technologies and capabilities in research and development and downstream and manufacturing. I think the slide's coming. One second here while we change the slides. okay so uh it's also important to note about our business there are a number of we believe long-lasting uh market forces uh and strong tailwind you know driving our business forward the first of which we have a large and growing market we size that at about five billion dollars uh in recurring revenue recurring opportunity and consumables and services and about a five billion dollar Our global system opportunity to adopt automation, especially around data integrity, which we don't believe is a short-term pressure. We believe that this will be long-lasting, especially as therapies get more valuable and are more directed towards, in some cases, life-saving applications. The fundamental change of the industry is also a very important driver to us. So as I touched on, the current method was developed about 100 years ago. The new methods that are being developed for manufacturing and cell and gene therapy and some biologics manufacturing require that their short shelf life require fast turnaround time, are very high value, are typically, it's time critical, going to a critical patient environment. So the speed is really important, which we do very well. Also, the amount of testing is typically increased with these advanced therapies. So what you have is the combination of criticality around accuracy, the criticality around speed, and a sheer volume, a high volume testing environment is a very, very good fit for our technology. And this is why we're so strong in a lot of the advanced modalities of biologics and cell and gene therapy. And I touched on another driving trend in the U.S. in particular, but more broadly, globally, the expansion of the manufacturing capacity, not only in the principal manufacturers, but also in the CDMOs. And we are positioned extremely well, as I touched upon, for the North American reshoring processes and buildouts of the North African pharmaceutical manufacturing. A bit about our growth strategy and how we've been successful. At a high level, it's a land and expand strategy. Our commercial strategy has, from the onset, targeted the large pharmaceutical companies. They bring brand and sophistication and scale. So our approach was to land inside an initial site, establish a growth threat as the standard within that site and expand within that side to other applications and to other sites and then expand ultimately globally. And this is what we've done and what we are doing. So we typically sell one to two or three, four systems to an initial customer. they get validated and then we expand within that site within that region within that application and then We move to different applications we start environmental monitoring we can expand to water and bioburden or or vice versa and this is how we've built out our global network we're in most large geographies now but geographic expansion has also been part of our expansion and will continue to expand geographically as well. So that's the core of our, I would say, organic sales and commercial strategy. Now, that being said, we do envision launching new products. Some of those we've already announced to continue to extend our ability to capture more share while outlifting customers and drive our revenue and margin profile. And there's also adjacent market opportunities. So I think personal care products, I think cosmetics and potentially in food and beverage, we are as a company focused on pharmaceutical now, but via our partnership with Merck Millipore Sigma, these adjacent markets create a very exciting growth opportunity. so this slide in some ways can tend to present itself uh it's it's who our customers are and where they are around the world i won't go through all of this but uh you can you can see on the left hand side of the slide you know who our consumers are the majority of the large name brand pharmaceutical companies but i would also highlight that we have you know many of the large CDMOs as well. We're broadly here penetrated into the cell and gene therapy ecosystem, nuclear medicine, small molecules, personal care. And this highlights the fact that we are agnostic to the manufacturing type, and we are an attractive technology to a broad array of customers, not only in size and scope and scale, but also in their type of manufacturing to include small molecule, as well as all the advanced therapies. Geographically, think of us as balanced between North America and Europe, largely. A bit smaller, but exciting and growing footprint in Asia. Each one of these, by the way, each one of those green dots is a customer site. In many of those, we have multiple systems. I touched on our partnership with Merck Milliport. Sigma, this is a very exciting partnership. We're extremely happy with. It's got three primary elements oriented around our three top line goals of accelerating growth through X system placements, expanding gross margins and driving innovation. At its core, it's a global five-year distribution agreement with committed minimum growth direct purchases and placements. It's also important in our gross margin journey, which I'll touch on in a few slides, a lot of what Merck, Millipore, Sigma has in their portfolio, We purchase from other vendors and into our manufacturing process, consumables in particular. So this relationship will allow us to purchase at rates to accelerate our gross margin expansion journey. And innovation is really important as well. Merck Melbor is in a vast majority of pharma QC labs around the world and customers use our products together. So part of this is how do we comport our products to work better together, but also how do we innovate new products in exciting workflows that will help our customers better run their operation. As I touched on, we plan to, we have been and plan to continue to grow at 20 plus percent revenue growth over time. And that's driven by our land and expand strategy, selling into our new and existing large customers, medium customers as well. New products will be part of that. The Merck-Millipore-Sigma relationship is certainly part of that as well, reshoring, etc. So the makeup of this is quite clear. It's also important to note that as we continue to drive revenue, we fully expect our recurring revenue model to stay very much in place. And you can see it here. It will continue to be really the underpinnings of our fundamental revenue umbrella will be that recurring, the very durable recurring revenue. Also touched on gross margin is an extremely important part of our story. I won't go through history here, but you can see how we've driven gross margins over the past several years and expect to continue to do so in the next couple of years And, you know, kind of getting to the punchline, we expect to exit 2028 at 50 plus percent gross margins and this year printing a 20 percent gross margin and exiting at better than 20 percent exiting this year on the way to 50 percent. And we're doing that through a variety of levers, material cost reduction, volume leverage. As we expand, there's meaningful volume leverage in our business. And on the service side, operating at higher productivity and more efficiencies throughout our business To wrap up, there are a number of reasons why we're very excited about the outlook of our business, a large, unexpanding market under pressure to change. Strong barriers to entry, first mover advantage. We have a relationship with Brookings 4 Sigma. We have an existing customer base that's very sticky. It's clear that the growth threat is the right technology for this market, just given who's adopted, how they've adopted it, and how they have entrusted, in some cases, the crown jewels of their product portfolio to us. We can address in our strong and all modalities, but we're especially strong in the very high growth advanced modalities of biologics and cell and gene therapy manufacturing. In our business model, it's unassailably working. It's quite clear we place a system and we pull through a high rate, a high yield, a very durable recurring revenue in the form of our consumables and recurring services. so with that uh that's that that's what we have from a uh from an overview went through a lot pretty quickly uh and also happy to open it for uh q a great well thank you so much for the presentation we have a bunch of questions um let's start with something that you mentioned earlier you mentioned evaluating opportunities to strengthen the balance sheet could you and Sean, elaborate a little bit more on that? Sure. I'll take that, Alex. Thanks. Yeah, so we ended Q2 with about $20 million in cash on the balance sheet. As we talked about on the Q2 call, we have a couple of different potential sources for additional capital out there right now. We have $25 million of additional capacity under a debt facility we put into place last year. $10 million of that is potentially available in January, and we believe we're on track to unlock that at that point in time. We also did a financing in May that involved warrants that if exercised would bring in up to $22 million of additional equity capital. So those are out there. Now, having said that, as you mentioned, and as Rob said, we are actively looking at opportunities to strengthen the balance sheet. We're doing that in part of our efforts to maximize shareholder value. We are doing it with an eye toward disciplined capital allocation, and it's all things that we're doing in an effort to try to support and kind of harden our path to that cash flow break even by the end of 2028. Great context. Thank you. And Rob, you also mentioned, you know, the ongoing collaboration with Millipore Sigma. Could you give us an update on that and how you think about, you know their system placement contributing in the second half of the year? Yeah, we actually just had a two-day leadership summit with the team this past week. Very exciting about where we are, where we're going with Merck Millipore Sigma. It's a very strong relationship. And as I mentioned previously, publicly before, we do expect a meaningful contribution in the second half of this year. Okay, great. And we have time for one more question. So, Sean, I know, you know, gross margins are inflecting, you know, your reported 15% in Q2, and you're guiding to about 20% for the full year. Could you talk about, you know, your confidence in hitting that guidance? Yeah, yeah. So you know the guide is 20% for Q3 as well. And you know we're have been executing very hard against that. I think we feel good about the trajectory on this quarter. And beyond that. So looking forward for the rest of the year and even out over the next few years as Rob covered into 2028. So the levers that we're pulling to deliver against our objectives here with margins are things that we have a lot of experience with. They're things that we are devoting a lot attention to and things that we feel confident we're going to be able to drive to as we look forward and head our way toward 50% exiting 2028. Glad to hear. And with that, we are at time. So I'd like to thank you both, Rob and Sean, for sharing the rapid story with us. And also thank everybody listening for spending time with us today. Thank you all. Thanks, Alex. Thanks all.