Q4 2023 Danimer Scientific Inc Earnings Call

Operator: You guys hit the... No, I think there's a meter to it, don't we? Welcome to the Danimer Scientific 2023 4th Quarter Earnings Call. At this time, all lines are in a listen-only mode.

No I think we can be.

[music].

Welcome to the January 2023 fourth quarter earnings call.

At this time all lines are in a listen only mode.

Operator: Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for a question. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the presentation over to Mr. Blake Chamblee, the company's Investor Relations Representative. Please go ahead.

Following the presentation, we will conduct a question and answers question.

<unk> will be provided at that time for you take you up for a question.

If anyone has any difficulties hearing the conference. Please press star zero for operator assistance at any time.

I'd now like to turn the presentation over to Mr. Blake Chamblee, the Companys Investor Relations representative.

Blake Chamblee: Please go ahead.

Blake Chamblee: Thank you, Operator. Good afternoon, everyone, and thank you for joining us today for Danimer Scientific's 2023 fourth quarter earnings call. Leading the call today are Steve Croskrey, Chairman and Chief Executive Officer, and Mike Hajost, Chief Financial Officer. I'd like to note that there is a slide deck that accompanies today's discussion, which is available on the investor relations section of our website at DanimerScientific.com. As we begin, I'll call your attention to the company's Safe Harbor language, which is published in our SEC filings and on slide two of the presentation I just referenced. On today's call, we may discuss forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Forward-looking statements include, among other things, statements regarding future results of operations, including margins, profitability, capacity, production, customer programs, and market demand levels. However, actual results could differ materially from what is expressed or implied in our forward-looking statements. The company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as required by law.

Blake Chamblee: Thank you operator, good afternoon, everyone and thank you for joining us today for Danaher Scientifics 2023 fourth quarter earnings call, leaving.

Blake Chamblee: Leading the call today are Steve <unk>, Chairman, and Chief Executive Officer, and Mike <unk>, Chief Financial Officer.

Blake Chamblee: I'd like to note that there is a slide deck that accompanies today's discussion which is available on the Investor Relations section of our website at Danaher scientific Dot com.

Blake Chamblee: As we begin I'll call your attention to the Companys Safe Harbor language, which is published in our SEC filings and on slide two of the presentation I just referenced.

Blake Chamblee: On today's call we may discuss forward looking statements within the meaning of the safe Harbor provisions of the private Securities Litigation Reform Act of 1995 as amended.

Blake Chamblee: Forward looking statements include among other things statements regarding future results of operations, including margins profitability capacity production customer programs and market demand levels.

Blake Chamblee: Actual results could differ materially from what is expressed or implied in our forward looking statements.

Blake Chamblee: The company assumes no obligation to update any forward looking statements to reflect events or circumstances. After the date hereof, except as required by law.

Blake Chamblee: Today's presentation also includes references to non-GAAP financial measures within the meaning of SEC Regulation G. We believe these non-GAAP measures have analytical value, but note that they should be taken as supplementary measures of performance and not as an alternative to GAAP results. We have provided reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures in our earnings release and our presentation. Thank you, and it's now my pleasure to turn the call over to Steve Croskrey, Chairman and Chief Executive Officer of Danimer Scientific. Good afternoon, and thank you for joining us.

Blake Chamblee: Today's presentation also includes references to non-GAAP financial measures within the meaning of SEC regulation G.

Blake Chamblee: We believe these non-GAAP measures have analytical value, but notes that they should be taken as supplementary measures of performance and not as alternatives to GAAP results.

Blake Chamblee: We have provided reconciliations for non-GAAP financial measures to the most comparable GAAP financial measures in our earnings release and our presentation.

Blake Chamblee: Thank you and it's now my pleasure to turn the call over to Steve <unk>, Chairman and Chief Executive Officer of Danaher scientific.

Steve: Good afternoon, and thank you for joining us.

Stephen E. Croskrey: The conclusion of the fourth quarter of 2023 marks the end of a challenging year as Danimer experienced delays in anticipated commercial launches. Despite these delays, we are greatly encouraged by our successes during the year, and we believe we remain well ahead of the competition in both our deep understanding of the biodegradable plastics industry and the available production capacity to meet our current and future customers' needs. Some examples of our recent successes include the previously announced £20 million PHA resin cutlery award for a large quick service restaurant chain, or QSR, the start of a Nodak-based straw scale up with another large QSR, as well as the commercial launch of home compostable certified mini carrot bags under the Bolthouse Farms brand completed in conjunction with our converter partner, Columbia Packaging. We are excited about our partnership with Delta Coffees in the development of single-use coffee pods that will meet stringent EU environmental standards.

Steve: Conclusion of the fourth quarter of 2023 marks the end of a challenging year as danaher experienced delays and anticipated commercial launches despite.

Steve: Despite these delays we are greatly encouraged by our successes during the year and we believe we remain well ahead of the competition in both deep understanding of the biodegradable plastics industry and the available production capacity to meet our current and future customers needs.

Steve: Some examples of our recent successes include the previously announced 20 million pound PHA resins Cutlery award for a large quick service restaurant chain or <unk>. The start of a no tax base drive scale up with another large <unk> as well as the commercial launch of home Compostable certified many carat bags.

Steve: The Bolthouse farms brand completed in conjunction with our converter partner Columbia packaging group.

Steve: We are excited about our partnership with Delta coffees in the development of single use coffee pods that will meet stringent EU.

Steve: Environmental standards.

Stephen E. Croskrey: Additionally, we have made great strides in research and development efforts with several of our customers, including Mars Wrigley, Camara, Eagle Fishing, and Pepsi. We have also announced the completion of our Renovo pilot plant in Rochester, New York. This allows us to demonstrate the capabilities of this unique PHA material in meeting our end customers' needs and provides an important proof of concept supporting our designs for commercial scale production. We remain engaged with a major oil and gas company as a co-location partner for a commercial facility and are also in negotiations with another partner to engage in research applications using our Renovo PHA. Our work with Chevron Phillips Chemical to develop and commercialize cast-extrusion films, blown-extrusion films, injection-molded parts, and rotational-molded parts using renewable polymers continues to progress in a very positive manner.

Steve: Additionally, we have made great strides in research and development efforts with several of our customers, including Mars, Wrigley Humira Eagle fishing and Pepsi.

Steve: We have also announced the completion of our renewable pilot plant in Rochester, New York.

Steve: This allows us to demonstrate the capabilities of this unique PHA material and meeting our customers' needs and provides an important proof of concept supporting our designs for commercial scale production.

We remain engaged with a major oil and gas company is it co location partner for a commercial facility and are also in negotiations with another partner to engage in research applications using our renewable PHA.

Steve: Our work with Chevron Phillips chemical to develop and commercialize cast exclusion films blowing extrusion films injection molded parts and rotational molded parts using renewable polymers continues to progress in a very positive manner.

Stephen E. Croskrey: Our primary focus remains our development and commercialization efforts in the quick service restaurant channel. We work closely with the top 3 QSRs as measured by U.S. system-wide sales for a variety of end-use products, including straws, cutlery, film wrappers, bowls, and container lids. Our previously announced £20 million annual award to provide cutlery resin to a large global QSR chain continues to progress as we anticipate. We have entered the first stage of scale-up and expect the first commercial shipments in the second quarter of 2024, with cutlery being delivered to at least one customer distribution center in the third quarter of 2024. We expect this award to reach full run rate in the second quarter of 2025. We have also recently learned of an opportunity to expand both in geography, specifically into Asian markets, including Japan, and into additional end product categories, including straws and film wrappers for cutlery with this same customer. Scale-up of our Nodax-based straw resin with another large QSR has progressed and is expected to enter commercial launch during 2024. The success of these trials has also led to a joint development agreement with the same QSR for lids and coated paper containers.

Steve: Our primary focus remains our development and commercialization efforts in the quick service restaurant chain.

Steve: We worked closely with the top III <unk> as measured by U S system wide sales for a variety of end use products, including strives cutlery film wrappers bowls and container lids.

Steve: Our previously announced 20 million pound annual awards provide cutlery resin to a large global <unk> chain continues to progress as we anticipated.

Steve: We have entered the first stage just scale up and expect the first commercial shipments in the second quarter of 2024 with cutlery being delivered to at least one customer distribution center during the third quarter of 2024.

Steve: We expect this award to reach full run rate in the second quarter of 2025.

Steve: We have also recently learned of an opportunity to expand both in geography, specifically into Asian markets, including Japan and into additional product categories, including strong film wrappers for cutlery with this same customer.

Steve: Scale up of our <unk> based <unk> with another large USR has progressed and is expected to enter commercial launch during 2024.

Steve: The success of these trials is also led to a joint development agreement with the same USR for lids and coated paper containers.

Stephen E. Croskrey: We also continue to advance in the commercialization process of compostable cups using our PHA resins for both aqueous and extrusion coatings. This has been a technically challenging area, but we are very close to a successful outcome. Our partner Chimera has recently exercised an option to extend their license and exclusivity with us to commercialize biodegradable aqueous barrier coatings to be used on paper-based food and beverage applications.

Steve: We also continued to advance in the commercialization process of Compostable cups, using our PHA resins for both aqueous and extrusion coatings.

Steve: This has been a technically challenging area, but we are very close to a successful outcome.

Steve: Our partner can mirror has recently exercised an option to extend their license in exclusivity with us to commercialize biodegradable aqueous barrier coatings can be used on paper based food and beverage applications.

Stephen E. Croskrey: This extension builds on our longstanding successful development partnership, which began in 2020 and bodes well for the future. The QSR industry continues to rapidly move towards more sustainable solutions, and we are thrilled to be a part of this transformation. We partnered with Delta Coffees, a coffee roaster and coffee packaging company in Portugal, to develop a compostable single-use capsule for their Delta Q line of ground espresso. We have begun commercial shipments of this resin in the first quarter of 2024. These pods are in full compliance with proposed new EU regulations requiring any coffee pods sold to meet new compost standards. These capsules degrade inside industrial composting environments, leaving no microplastics or other residues that would harm natural ecosystems.

Steve: This extension builds on our long standing successful development partnership, which began in 2020 and bodes well for the future.

Steve: <unk> our industry continues to rapidly move towards more sustainable solutions, and we're thrilled to be a part of this transformation.

Steve: We partnered with Delta copies of coffee roaster, and coffee packaging company in Portugal.

Steve: The composite of all single use capsule for their Delta Q line of ground espresso.

Steve: We have began commercial shipments of this regimen in the first quarter of 2024.

Steve: These pods are in full compliance with proposed new EU regulations, requiring any coffee pods sold to meet new combo standards.

Steve: <unk> capsules degrade inside industrial composting environment, leaving no micro plastics or other residues that would our natural ecosystems.

Stephen E. Croskrey: As a reminder, coffee pods and teabags represent a potential 500 million pound opportunity in the European marketplace. We have also expanded our research and development contract with Mars Wrigley to further our relationship with their snacking division, including the completion of testing and validation of a unique product packaging using fully biodegradable PHA materials this year. Our partnership has also made significant progress towards the development of compostable PHA packaging that showcases the desired performance for products in Mars pet care and food and nutrition businesses. Another promising R&D project is focused on the sports fishing industry. Ego Fishing, an innovation leader in the industry, has partnered with us to develop new PHA technology for soft fish bait.

Steve: As a reminder, coffee project tea bags represent a potential 500 million pound opportunity in the European marketplace.

We have also expanded our research and development contract with Mars Wrigley to further our relationship with their snacking division, including the completion of testing and validation of a unique product packaging using fully biodegradable PHA materials. This year.

Steve: Our partnership has also made significant progress towards the development of composite of all PHA packaging.

Locations, the desired performance of our products and Mars pet care and food and nutrition businesses.

Steve: Another promising R&D project is focused on the sports fishing industry Eagle fishing and innovation leader in the industry has partnered with us to develop a new PHA technology for soft ish base development of this new PHA soft plastic technology is nearing completion and full scale testing should be underway by mid year, which will help can be.

Stephen E. Croskrey: Development of this new PHA soft plastic technology is nearing completion, and full-scale testing should be underway by mid-year, which will help to replace the plasticized PVC lures that harm our aquatic ecosystem. This is an exciting market for us as we continue to grow in new directions and end-use applications with our Nodex PHA-based resin. We have successfully completed a joint development agreement with PepsiCo to create home-compostable multi-layer films for use in snack food packaging.

Steve: Place the Plasticize PBC Lewis.

Steve: Aquatic ecosystems.

Steve: This is an exciting market for us as we continue to grow in new directions, and end use applications with our <unk> PHA based resins.

Steve: We have successfully completed a joint development agreement with Pepsico to create home compostable multilayer films for Houston snack food packaging or.

Stephen E. Croskrey: Our combined R&D efforts have led to the development of a multi-layer packaging structure that meets the practical requirements for protecting the product while offering a sustainable disposable alternative. The expected demand growth for our PHA-based products allows us to reaffirm our projected profitability timeline for our Kentucky operation and the company in general. We expect our Kentucky facility, on a standalone basis, to become EBITDA positive during the second half of 2024 at plant capacity utilization of just over 30%. We expect the total company will become EBITDA positive when our Kentucky facility reaches 70 to 80% capacity utilization near the start of 2025. To support the customer revenue growth outlined above, we decided to further augment our liquidity position to help ensure an adequate cash flow. As we previously announced, we recently completed an equity offering generating $13.5 million of additional cash after the customary closing.

Steve: Our combined R&D efforts have led to the development of our multi layer packaging structure that meets the practical requirements for protecting their product offering a sustainable disposable alternatives, we expected demand growth for our PHA based products allows us to reaffirm our projected profitability timeline for our Kentucky operation and the company in total.

Steve: We expect our Kentucky facility on a standalone basis to become EBITDA positive during the second half of 2024 at plant capacity utilization of just over 30% we.

We expect the total company will become EBITDA positive when our Kentucky facility reaches 70% to 80% capacity utilization near the start of 2025.

Steve: To support the customer revenue growth outlined above we decided to further augment our liquidity position to help ensure an adequate cash runway.

Steve: As we previously announced we recently completed an equity offering generating $13 $5 billion of additional cash after customary closing fees.

Steve: This additional liquidity line with our projections for a decreasing cash burn rate as volumes increase there our Kentucky facility will aid us in meeting our forward cash needs.

Stephen E. Croskrey: This additional liquidity, along with our projections for a decreasing cash burn rate as volumes increase at our Kentucky facility, will aid us in meeting our forward cash needs. I would now like to now draw your attention to slides five and six in our investor presentation, which provide a visual reminder of our sales cycle process. From the initial lead to commercialization, this can be a lengthy, iterative process rather than a linear one, but we have been at this for a long time.

Steve: I would like to now draw your attention to slides five and six in our Investor presentation, which provides a visual reminder of our sales cycle process.

Steve: From the initial lead the commercialization this can be a lengthy iterative process rather than a linear one but we've been at this a long time. We currently have 85 customers in the materials selection cycle ranging from initial sample production to larger scale trials.

Steve: <unk> testing regulatory certification work this cycle establishes the long term sales pipeline for our business.

Steve: We recently announced two new board members, we are honored to welcome Dr. David J <unk>, Mr. Richard all types to the dam or scientific board of directors. Dr. Kerr Mcgee, who was appointed to the board on January 17th of this year is the former Chief Executive Officer of <unk> incorporated a U S based manufacturing and material Science company.

Stephen E. Croskrey: We currently have 85 customers in the material selection cycle, ranging from initial sample production to larger-scale trials, to market testing, to regulatory and certification. This cycle establishes the long-term sales pipeline for our business. We recently announced two new board members. We are honored to welcome Dr. David J. Moody and Mr. Richard Altheis to the Danimer Scientific Board of Directors. Dr. Moody, who was appointed to the board on January the 17th of this year, is the former Chief Executive Officer of GADEX, Incorporated, a U.S.-based manufacturing and material science company.

Steve: He has over 30 years of experience managing chemical and polymer related businesses.

Steve: Mr. Richard <unk>, whose appointment will be effective April 15th 2024 in the former President and CEO of nature works, a developer and manufacturer of Biopolymers. He has over 30 years of sales marketing operational and management experience in the specialty chemicals and biopolymer industries.

These new board members bring valuable industry perspective, and experience as we seek to rapidly grow our business and we're very excited about adding these seasoned executives to our team.

Stephen E. Croskrey: He has over 30 years of experience managing chemical and polymer-related businesses. Mr. Richard Altice, whose appointment will be effective April 15, 2024, is the former president and CEO of NatureWorks, a developer and manufacturer of biopolymers. He has over 30 years of sales, marketing, operational, and management experience in the specialty chemicals and biopolymer industries. These new board members bring valuable industry perspective and experience as we seek to rapidly grow our business, and we are very excited about adding these seasoned executives to our team. Finally, we're entering the final stages of our due diligence work with the DOE Loans Program Office, and we look forward to negotiations on a projected term sheet. I will now turn the call over to Mike Hajost, our Chief Financial Officer, to update you on the financial results for the fourth quarter and on our outlook for 2020. Thank you, Steve. Good afternoon, everyone.

Steve: Finally, we are entering the final stages of our due diligence work with the Doe loans program office, and we look forward to negotiations on a projected term sheet.

Michael A. Hajost: I will now turn the call over to Mike Hey, Joe <unk>, Our Chief Financial Officer to update you on our financial results for the fourth quarter and our outlook for 2024.

Thank you Steve Good afternoon, everyone I'll start with our financial results on slide seven of our presentation for those of you following along.

Mike: Fourth quarter total revenue was $10 9 million compared to $15 3 million.

Mike: Led by a product revenue decline.

Mike: $4 million or 28% compared to the prior year level.

Mike: It's a base resin sales grew by 11% in the quarter compared to last year.

Mike: And we continued to experience steady growth, but PLE based resin sales fell 74% compared to last year, primarily due to the ongoing issues associated with the Ukrainian conflict.

Mike: We reported a fourth quarter 2023 gross loss of $6 4 million as compared to the prior year quarters gross loss of $2 7 million the.

Michael A. Hajost: I'll start with our financial results on slide seven of our presentation for those of you following along. Fourth quarter total revenue was $10.9 million compared to $15.3 million, led by a product revenue decline of $4 million or 28% compared to the prior year level. PHA-based resin sales grew by 11% in the quarter compared to last year.

Mike: The year over year increase is primarily due to overall lower pls sales as well as higher depreciation expenses.

Mike: After adjusting for depreciation and stock based compensation.

Mike: Reported and adjusted gross loss of $1 2 million as compared to an adjusted gross profit of $2.0 million in the fourth quarter of 2022, primarily due to the lower Pls sales.

Michael A. Hajost: And we continue to experience steady growth, but PLA based resin sales fell 74% compared to last year, primarily due to the ongoing issues associated with the Ukraine conflict. We reported a fourth quarter 2023 gross loss of $6.4 million as compared to the prior year quarter's gross loss of $2.7 million. The year over year increase is primarily due to overall lower PLA sales, as well as higher depreciation expenses.

Mike: R&D and SG&A expenses, excluding depreciation amortization stock based compensation and certain nonrecurring items totaled $9 4 million in the fourth quarter of 2023 compared to $10 5 million in the fourth quarter of last year.

Mike: Our continued cost control initiatives across many areas of the business created this $1 $1 million year over year improvement.

Mike: Adjusted EBIT loss was $10 7 million in the fourth quarter of 2023.

Michael A. Hajost: After adjusting for depreciation and stock-based compensation, we reported an adjusted gross loss of $1.2 million as compared to an adjusted gross profit of $2.0 million in the fourth quarter of 2022, primarily due to lower PLA sales. R&D and FG&A expenses, excluding depreciation, amortization, stock-based compensation, and certain non-recurring items, totaled $9.4 million in the fourth quarter of 2023, Our continued cost control initiatives across many areas of the business created this $1.1 million year-over-year improvement. Adjusted EBITDA loss was $10.7 million in the fourth quarter of 2023 and was a loss of $8.6 million in the fourth quarter of 2022. For the full year, we had an adjusted EBITDA loss of $39 million, which was in line with our latest guidance range of minus $37 to minus $40 million. On a year-over-year basis, this represents a $6 million improvement over prior years when we just even lost $45 million. Adjusted EBITDA excludes stock-based compensation, depreciation, amortization, interest, and other non-recurring items as reconciled in the appendix.

Mike: And was a loss of $8 6 million in the fourth quarter of 2022.

Mike: For the full year, we had an adjusted EBITDA loss of $39 million, which was in line with our latest guidance range of minus 37% to minus $40 million.

Mike: On a year over year basis. This represents a $6 million improvement over prior year's adjusted EBIT loss of $45 million.

Mike: Adjusted EBITDA excludes stock based compensation depreciation amortization interest and other nonrecurring items is reconciled in the appendix.

Mike: Okay.

Mike: Cash and equivalents at the end of the fourth quarter was $59 2 million.

Mike: As compared to $62 8 million at the end of 2022.

Mike: Strictly cash was $14 3 million, which is mainly held for future interest payments under our senior secured term loan capital expenditures were $2 million in the fourth quarter and $27 7 million for the full year, which was in line with our latest guidance range of $27 million to $29 million.

Mike: We ended the fourth quarter with a total debt balance of $382 8 million comprise mainly of our convertible senior notes the senior secured term loan and our new market tax credit loans, which we expect will be forgiven starting in 2026.

Mike: We continue to view the magnitude and timing the customer ramp for PHA based resins, and our increased utilization to serve that demand from our Kentucky operations as the largest factors for variability in our short term financial results.

Michael A. Hajost: Cash in equivalence at the end of the fourth quarter was $59.2 million, as compared to $62.8 million at the end of 2022. Restricted cash was $14.3 million, which is mainly held for future interest payments under our Senior Secured Term Loan. Capital expenditures were $2 million in the fourth quarter and $27.7 million for the full year, which was in line with our latest guidance range of $27 million to $29 million.

Mike: With the customer expectations described earlier that will improve cash flow from our Kentucky operations.

Mike: We are set to release, our full year 2020 for guidance.

We believe our adjusted EBITDA will be in the range of minus $22 million to minus $32 million.

With very little required spend on the Greenfield project in 2024, we're expecting our total capital expenditures for a company to be in the range of 8 million to $10 million.

Michael A. Hajost: We ended the fourth quarter with a total debt balance of $382.8 million, comprised mainly of our convertible senior notes, the senior secure term loan, and our new market tax credit loans, which we expect will be forgiven starting in 2026. We continue to view the magnitude and timing of the customer ramp for PHA-based resins and our increased utilization to serve that demand from our Kentucky operations as the largest factors for variability in our short-term financial results. With the customer expectations described earlier that will improve cash flow from our Kentucky operations, we are set to release our full year 2024 guidance. We believe our adjusted EBITDA will be in the range of minus $22 million to minus $32 million.

Mike: We also expect to end 2024, with an unrestricted cash balance in the range of $20 million to $25 million.

Mike: This ending cash balance range is driven by the adjusted EBIT to range as a proxy for cash flow that 'twenty 'twenty four capex range known cash interest for the year based on our current debt structure the <unk>.

Net cash received from our recent equity issuance.

Mike: Significant improvements in working capital.

Mike: The working capital improvements will be led by our opportunities to reduce inventory from artificially high current levels and our ability to improve our overall receivables collections.

Mike: Include collections from completed R&D contracts.

Mike: If any cash balance range does not include potential cash or liquidity from other financing transactions that are available to us.

Mike: I'll now hand, the call back to Steve for his closing remarks.

Michael A. Hajost: With very little required spend on the Greenfield project in 2024, we're expecting our total capital expenditures for the company to be in the range of $8 million to $10 million. We also expect to end 2024 with an unrestricted cash balance in the range of $20 to $25 million. The defending cash balance range is driven by the adjusted EBITDA range as a proxy for cash flow, the 2024 CapEx range, known cash interest for the year based on our current debt structure, the net cash received from our recent equity issuance, and significant improvements in working capital. The working capital improvements will be led by our opportunities to reduce inventory from artificially high current levels and our ability to improve our overall receivables collections to include collections from completed R This ending cash balance range does not include potential cash or liquidity from other financing transactions that are available to us.

Steve: Thanks, Mike.

Steve: In conclusion, and as we look towards 2024, we're focused on the immense long term opportunity to transform the plastics market.

Steve: With our developmental expertise capacity footprint and a growing blue chip customer base. We believe we remain well ahead of any competition and have a clear path to deliver on our goals for 2024 and beyond.

None: Thank you for your time today, and we look forward to updating you on our progress.

None: We will now open the line for questions.

None: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone you will Youre three telecom technology Youll request questions will be taken in the order received should you wish to cancel your request. Please press.

None: The stellar followed later too.

Using a speaker phone please lift the handset before pressing and once again that is star one should you wish to ask a question.

None: Your first question is from Jon <unk> from CJS Securities. Please ask your question.

Stephen E. Croskrey: I'll now hand the call back to Steve for his closing remarks. Thanks, Mike. In conclusion, and as we look towards 2024, we are focused on the immense long-term opportunity to transform the plastics market. With our development expertise, capacity footprint, and a growing blue chip customer base, we believe we remain well ahead of any competition and have a clear path to deliver on our goals for 2024 and beyond. Thank you for your time today, and we look forward to updating you on our progress. We will now open the line for questions. Ladies and gentlemen, we will now begin the question and answer session. [inaudible] You will hear a three-tone prompt acknowledging should you wish to cancel your request. Dress To Starve. If you are using a speakerphone, please give a hand signal.

Jon: Hey, guys. Thank you for taking my questions.

Jon: My first one is could you talk a little bit more about your expectations for timing and ramp up through the year. It sounds like you're getting a little bit better visibility as it relates to the Calgary and some of the other contracts.

None: But I'm wondering if you have any more.

None: A more detailed breakdown.

None: By quarter.

None: Yes, John I don't know that we can give you a.

Detailed ramped by quarter, but I can try to color it in here.

None: Most of this is going to be driven by the Colorado Award, which are significantly larger than some of the other opportunities.

None: As we mentioned already.

None: We expect to be in distribution centers by Q3 and to be at full run rate with that by Q2 of next year.

Operator: Once again, that is Star 1, should you wish to. Your first question is from Jon Tanwanteng from CJS Security. Hey guys, thank you. Talk a little bit more about it. Sounds like you're getting a little bit better. Yeah, John, I don't know that we can give you a detailed ramp by quarter, but I can try to color it in here. You know, most of this is going to be driven by the Cutlery Award, which is significantly larger than some of the other opportunities. As we mentioned already, we expect to be in distribution centers by Q3 and to be at full run rate with that by Q2 of next year. Where the project is right now, the converters that have been awarded the business are in the process of getting tools built specifically for this program. One converter has ordered about nine million dollars worth of new equipment that will be delivered in April.

None: The project is right now.

None: Converters that have been awarded the business are in the process of getting tools built specifically for this program.

One converter has ordered about $9 million worth of new equipment that will be delivered in April. So it's well underway. We don't have specific production requirements, yet, but we know what the goals of the customer are.

None: That support.

None: Our <unk>.

None: That this will be at full run rate by Q2 of next year and I'll just point out that's.

Stephen E. Croskrey: So it's well underway. We don't have specific production requirements yet, but we know what the goals of the customer are that support our point that this will be at full run rate by Q2 of next year. And I'll just point out, you know, that's 20 million pounds, and that will more than double our PHA sales. And one of the exciting things now is that we're also going to be doing the plastic wrap for the cutlery. And that's going to also add significantly to the award.

None: That's 20 million pounds and that that will more than double our PHA sales and one of the <unk>.

None: Writing things now is that we're also going to be doing the plastic wrap for the cutlery and that's going to also add significantly to the award.

None: Thanks for the question got it.

None: That's helpful.

None: Second I was wondering if you could give us an update on the daily loan program and if there's any movement, there or any changes to your expectations.

Stephen E. Croskrey: Thanks for the question. Got it. That's helpful. Second, I was wondering if you'd give us an update. Aaron.

Okay.

None: We are at the point now where the dose is nearing completion of its due diligence and we expect to be negotiating the terms.

Stephen E. Croskrey: Okay, we are at the point now where the DOE is nearing completion of its due diligence, and we expect to be negotiating the terms and are looking for a conditional offer conditional commitment by sometime in Q3, and the funds would be available. Well, I, you know, that's possible, John, but, Yeah, that that's possible, John, but it will also depend on, you know, what the actual conditional commitment is, you know, so depending on, you know, what requirements there might be, you know, we know what we've asked for, but we don't really know exactly what we're getting. So there could still potentially be monies that have to be raised.

None: They are looking for a conditional offer conditional commitment by sometime in Q3.

None: Got it and the funds would be available around Q4 and that timeline is that fair.

None: Well.

None: That's possible John.

None: Yes, that's possible John but it will also depend on what the actual conditional commitment is so depending on.

None: What requirements there might be we know what we've asked for but we don't really know exactly what we're getting so there could still potentially be monies that have to be raised and so just to kind of depend on how much in terms of how long that could take.

Stephen E. Croskrey: And so this kind of depends on how much in terms of how long that could take. But, you know, we're hopeful that we can get it done by Q4. But until we actually see the term sheet, it's really hard to predict exactly. And lastly, as you think about it, are you seeing any movement?

None: Yes.

None: We're hopeful that we could get it done by Q4, but until we actually see the term sheet is really hard to predict exactly.

None: Understood.

None: And then lastly, as you think about the Greenfield and the timeline it might go up depending on what you get financing for us.

None: Seeing any movement in customers, who are willing to take.

None: Okay.

None: An anchor customer.

Volume indications, which.

Stephen E. Croskrey: Volume Indications Yes, I would tell you that some of our customers that are included in this current ramp are moving forward with the expectation that we're going to get the Greenfield deal done because they know that we won't be able to handle, you know, their entire requirements just out of Kentucky. So, you know, we think that's a favorable thing, obviously. And we expect, as we continue to get some of these other development projects across the finish line, that, as we've said, many times there is multiples more demand in our pipeline than what we can handle even with the greenfield. So and I would point to you one specific need, which is compostable cups, drinking cups. You know, as we get that over the finish line, that's going to create a tremendous amount of demand and will require the greenfield to support that. I'll jump back in queue.

None: Which may indicate there may need to greenfield.

None: Yes.

None: I would tell you that some of our customers that are included in the current ramp or.

None: Moving forward with the expectation that we're going to get the Greenfield deal done because they know that we won't be able to handle their entire requirements just out of Kentucky. So we think that's a favorable thing obviously and we expect as we continue to get some of these other <unk>.

<unk> projects across the finish line that as we've said.

None: Many times there is there is multiples more demand in our pipeline and what we can handle even with the greenfield So and I would point to one specific need which which are.

None: <unk> cups drinking cups.

None: As we get that over the finish line and Thats going to create a tremendous amount of demand and will require the greenfield to support that.

None: Okay, great I'll jump back in queue. Thank you.

Stephen E. Croskrey: Thank you, John. Your next question is from Thomas Boyes from TD Cohen. Please ask. Thanks for taking the questions.

None: Thanks, John.

None: Thank you.

None: Question is from Thomas Boyce from Cowen. Please ask your question.

Thomas Boyce: Thanks for taking the questions maybe just a follow on just a bit on the <unk>.

Thomas Gordon Boyes: Maybe just to follow on just a bit on the DOE loan, more on the process, kind of a high-level. Assuming that the loan conditional improvement comes in 3Q of 24, for the $180 million that you've already spent on Bainsbridge, would you get 80% of that all at one time? Is that kind of how that works? And then maybe it would be fair to assume that there's a one-quarter lag on CapEx that you've spent in 1Q of 25 showing up in 2Q and then 3 and 4 and so on and so forth? Is that kind of how the timing, you think, works?

None: Loan.

Thomas Boyce: The process kind of a high level, if assuming that the loan conditional permit comes in <unk> 24.

Thomas Boyce: $180 million that you've already spent on beans bridge you would you get 80% of that all at one time is that kind of how that works and then maybe it would it be fair to assume that if there is a one quarter lag on on Capex that you spent in <unk> 25 is showing up in <unk>, and then three and four and so on and so forth is that.

Thomas Boyce: The timing.

Thomas Boyce: Is it works.

Stephen E. Croskrey: Thanks for the question, Thomas. I'll try to answer it and make sure I'm answering the right question. So we're going to get, as part of the term sheet, an LTV, a loan to value. So we, you know, we'll get credit for the hundred and roughly 190 million ish that we've already got into the project that will count towards our equity, and and whatever, if there's a gap, we'll have to raise additional equity. If there's not a gap, we'll just get started right away, and it will be an immediate draw against the loan proceeds.

None: Thanks for the question Thomas Let me make sure I I'll try to answer it and make sure I'm answering the right question.

None: So we're going to get as part of the term sheet.

None: And LTV loan to value so.

None: We will get credit for the 100, roughly 190 million ish that we've already got into the project at will count towards our equity.

None: And whenever if theres a gap will have to raise additional equity. If there is not a GAAP will just get started right away and it will be an immediate draw against the loan proceeds.

Stephen E. Croskrey: So there won't be like a step thing each month or anything like that; it will just be, when the loan closes, it will all be available. Okay, that's all. And then, just as for my second question, could you talk a little bit more about the joint development agreement for the LIDS and code for paper containers? I know you have already made significant progress internally on LIDS and, you know, in theory, could that speed up the sales process that you outlined in the deck? Yes, I can't I can't really offer too much more, Thomas, to that other than, you know, it's for a major QSR. But these are lids. You know, it's very similar to lids for cups, but these are lids, you know, specifically for food containers.

None: So it won't be.

None: It won't be there wont be like a step thing each month or anything like that it will just be.

None: When the loan closes it will all be available.

None: Okay.

None: Helpful.

None: And then just as for my second one could you talk a little bit more about the joint development agreement for the Lids Couldnt paper containers.

None: I know you already have made significant progress internally on lids and.

None: In theory, because that speed up the sales process that you outlined in the deck.

None: Yes, I can't I can't really offer too much more thomas to that.

It's four.

None: Major <unk>, but.

None: But these are leads.

None: It's very similar to lids for cups, but these are lids, specifically for food containers. So it is a little different but every time, we do one of these projects, we learn things and we learn things that we can.

Stephen E. Croskrey: So it's a little different. But, you know, every time we do one of these projects, we learn things, and we learn things that we can, you know, translate into other areas. So it's all good. Got it. And if I could sneak one more in, just any update on feedstock pricing, what you're seeing in the market that you've locked in would be helpful. Yeah, Mike, do you want to take that one

Translate into other other area. So it's all good.

None: Got it and if I could sneak one more in just any update on feedstock pricing, what you're seeing in the market that you've locked in it would be helpful.

None: Yes, Mike do you want to take that one yes sure Thomas Yes, I think overall.

Michael A. Hajost: Yeah, sure, Thomas. Yeah, I think overall, you know, in Q4, canola prices averaged right around 86 cents a pound. And we're seeing really about the same type of price here in Q1. And as we look forward for the rest of the year, we're projecting those prices to move down to about 70 cents by mid year. And we're also expecting to kind of end the year somewhere in the mid-60 cent range. So we're seeing a nice decrease in prices. And we're starting to lock some of those in. Appreciate it. I'll hop back in the queue.

Mike: In Q4 can oil prices averaged right around 86 cents a pound.

Mike: And we're seeing really the same type of price here in Q1, so as we look forward here through the rest of the year, where we can projecting those prices to move down to about 70.

Thomas Boyce: By mid year, and we're also expecting to kind of end the year somewhere in the mid 60 range. So we're seeing a nice decrease in the prices and we are starting to lock some of those in.

None: I appreciate it I'll hop back in queue. Thanks.

Thomas Gordon Boyes: Thanks. Your next question is from Lawrence Alexander from Jeffreys. Good afternoon.

None: Thank you.

None: Your next question is from Laurence Alexander from Jefferies. Please ask your question.

Laurence Alexander: Just want to start with the filtration process for the customers, you know, the 85 that you mentioned. Does that materially change the aggregate potential?

Laurence Alexander: Good afternoon gentlemen.

Laurence Alexander: Starts with the.

Laurence Alexander: The filtration process for the customers the 85 that you mentioned.

Stephen E. Croskrey: Demand Pool that you have compared to what you've talked about previously, or can you give some sense of... Transcribed by https://otter.ai, kind of, if all of those customers did ramp up, you know, how many plants of potential demand that would represent? Yeah, Lawrence, in kind of just big round numbers, I would say that those customers represent at least three times more capacity than is available in Kentucky and Greenfield. And I would say that's a conservative number without throwing everything at it. That's, you know, just the specific projects we're working on. And to be clear, the 85 doesn't necessarily represent a change.

Laurence Alexander: That materially change the aggregate potential demand.

Laurence Alexander: Demand pool that you have compared to what you've talked about.

Laurence Alexander: Or can you give some sense of.

Laurence Alexander: Kind of if all of those customers did ramp up how many plants potential demand that would represent.

None: Yes Lawrence.

Lawrence: Big round numbers I would say that those customers represent at least three times more.

Lawrence: Capacity than is available.

In Kentucky, and the Greenfield and obviously, that's a conservative number without throwing everything added.

Lawrence: The specific projects, we're working on.

Lawrence: And to be clear.

Lawrence: That the 85 doesn't necessarily represent a change it's just we've been looking for a way to try to.

Stephen E. Croskrey: It's just we've been looking for a way to try to, you know, demonstrate to help investors kind of understand the process better and to kind of see where things are. And so this is something we're going to, we'll continue to refine, but we'll continue to track this in the future and present that kind of information. So any feedback we get on how that looks and how we might do it better would be helpful. Oh, you'll probably get too many metrics we all want, in terms of the customers who you won earlier, you've been ramping up with, you know, can you just give a sense for how much churn you've had, you know, kind of the customers that are increasing the volumes they take versus customers who are dropping out because products either didn't hit their specifications or their needs changed.

Lawrence: Demonstrate to help investors kind of understand the process better and to kind of see where things are and so this is something we're going to.

Lawrence: We will continue to refine but we will continue to practice in the future and present that kind of information.

Lawrence: So any great feedback, we get on on how that looks.

Lawrence: And how we might do it better would be helpful.

None: Oh, Youll, probably get too many more.

None: Metric, we all want.

None: One that would be helpful.

None: In terms of the customers, who you won earlier.

None: And <unk> been ramping up with could you just give a sense for how much churn you've had kind of.

None: Customers that are increasing the volumes they take versus customers, who are dropping out because of products either didn't hit respect for their needs changed.

Stephen E. Croskrey: Sure, Lawrence, if you look on slide five and look at the customers on the right, those customers are all growing. And I would say we have never lost a customer once we had them at kind of full run rate. We had maybe one customer in the past, and that and this was a number of years ago where, You know, they launched, they probably didn't understand their own specifications.

None: Sure Lawrence.

Lawrence: Look on slide five and look at the customers on the right.

Those customers are all growing.

And I would say we have.

Lawrence: Never lost a customer once we had them in.

Lawrence: At kind of full run rate.

Lawrence: We might we had maybe one customer in the past.

Lawrence: And then this has been a number of years ago, where.

Lawrence: Yeah.

Lawrence: They launched they probably didn't understand their own specifications. It was a smaller company and we launched and then they found out things. After the fact that that didn't work for them, but other than that we have not lost a customer.

Stephen E. Croskrey: It was a smaller company, and we launched, and then they found out after the fact that that didn't work for them. But other than that, we have not lost a customer. All these customers are happy and, you know, growing with us. Okay, great. And then just, what's the current market expectation or customer expectation or your messaging to them around when you do the greenfield, do they expect as volumes ramp a significant drop in ASPs, or would we be thinking about kind of flat to, you know, a modest erosion in May? You know, as you get a call, you know, we, Yeah, sure. I understand your question. You know, we have talked with some of the larger customers; we've kind of shown them some expectations over like a 10 year period of what that could look like as we scale and what's possible. But we have never specifically offered anybody, you know, better, lower pricing once the greenfield comes online or had any specific discussions like that.

Lawrence: All of these customers are happy and.

Lawrence: Growing with us.

None: Okay, Great and then just.

Lawrence: What's the current.

Lawrence: Market expectation or customer expectation of your messaging to them around when you use a greenfield.

Lawrence: Do they expect as volumes ramp to a significant drop in asp's or.

Lawrence: Thinking about kind of flat.

Lawrence: A modest erosion in MC.

Lawrence: As you get a call E mail.

None: Yes, sure I understand your question.

None: We have talked with with some of the larger customers, we've kind of showing them some expectations over like a 10 year period.

None: What that can look like as we scale and what's possible, but we have never saw.

None: Specifically offered anybody.

None: Lower pricing once the Greenfield comes online or reported had any specific discussions like that.

Stephen E. Croskrey: Great, and then just lastly, can you update kind of the market prospect prospects for the Novomer technology, particularly in the aqueous film application? Sure. So we are, you know, as you know, we've just completed the scale-up of the new pilot plant. And that will allow us enough volume to be able to sample some of these customers who will then, you know, be able to create demand by validating the material. We are in the middle of negotiations with another major chemical company for a development agreement to support that. And, as you know, we're working with Chevron Phillips on a couple of those projects as well. And we have a kind of call it just call it a verbal agreement at this point because we're waiting for customer traction now.

None: Great and then just lastly can you update kind of the market prospect prospects for the.

None: For the November our technology, particularly into the aqueous film applications.

None: Sure so.

None: We are as you know we've just completed the scale up of the new pilot plant and that will allow us enough volume to be able to sample. Some of these customers that will then be able to create demand by validating the material.

None: We have.

None: Or in the middle of negotiations with another major chemical company for a development agreement.

None: To support that and as you know working with Chevron Phillips on a couple of those projects as well.

None: We have a.

None: Kind of just call. It a verbal agreement at this point with because we're waiting on the customer traction now, but we have an agreement with enel.

Stephen E. Croskrey: But we have an agreement with another major oil and gas company for a co-location venture. I can't talk about anything on the aqueous side, but on the film side itself, what we're seeing is, if you remember, Lawrence, when we bought that, one of the things we were touting was that the barrier properties of that material were much better than other commercial biopolymers, significantly so.

None: Other major oil and gas company for co location.

None: Venture.

None: We can't I can't talk to anything on the aqueous side, but but on the film side itself. What we're seeing is if you remember Lawrence when we bought that that one of the things. We were chatting was that the barrier properties of that material is <unk>.

None: Better than other commercial biopolymers significantly so and what we're seeing now is it's also better than the fossil fuel based products. So I keep telling people we have a killer app here and when we can get that commercialized and combine it with with node acts.

Stephen E. Croskrey: And what we're seeing now is that it's also better than fossil fuel-based products. So I keep telling people we have a killer app here, and when we can get that commercialized and combined with NODAX, we're going to be able to create applications that none of the other biopolymer competitors that are in the market today, or even the ones that are trying to get into the market, would be able to compete with on the snack food side because of the barrier properties. And then just sorry, one last one that I'll hop back in the queue is, is there a, would all of those agreements, if they did pan out, do those represent any significant capital requirements on your part, or is the goal on that side of the business to be mostly capital? Well, the goal is to be capital light. But you know, worst case, if we do a co-location, which we're going to do, that's just how it's going to be done. Because, you know, those suppliers have the raw materials that we need these big oil and gas companies.

None: We're going to be able to create applications that none of the other biopolymer competitors that are in the market today or even the ones that are trying to get into the market, we'd be able to compete with on the snack foods side because of the barrier properties.

None: And then just sorry, one last one then I'll hop back in the queue.

None: Is there a.

With all of those agreements if they did pan out do those represent.

None: Any significant capital requirements on your part or is the goal on that side of the business to be mostly capitalized.

None: Well the goal is to be capital light.

None: But.

None: Worst case, if we if we do a co.

None: Asian.

None: Which we're going to do it that's just how we how it's going to be done because.

None: Those suppliers they have the raw materials that we need these big oil and gas companies and so that's just the natural way that it will work.

Stephen E. Croskrey: And so that's just the natural way that it will work. If we do that, that will reduce the capex requirement because we will piggyback off of their infrastructure for things like utilities, you know, killers, and electricity and things like that. So we can, we can reduce our capital requirement that way. We're hopeful that we'll find a partner through this process on the commercial side that would like to participate. And we think if we get that, then we think the co-location co-location partner will also want to participate. And we can, you know, reduce our capex requirement even more. But the beauty of this product is that the capex cost, on a per pound basis, is one fifth of the cost of a NODAC.

None: If we do that.

None: The that will reduce the capex requirement, because we will piggy back off of their infrastructure for things like utilities, Chillers and electricity and things like that so we can we can reduce our capital requirement that way, we're hopeful that we'll find a partner through this process on the commercial side that would.

None: I'd like to participate.

None: And we think if we if we get that and we think the co locate or co location partner will also want to participate and we can reduce our capex requirement, even more but the beauty of this.

None: This product is.

That the Capex cost.

None: On a per pound basis is one fifth of the cost of the <unk> plant and so even if we have to foot. The bill we expect to be able to do it on a on a project financing basis.

Stephen E. Croskrey: And so even if we have to, you know, flip the bill, we expect to be able to do it on a project financing basis. Okay, great. Okay, thank you. Once again, that is star number one, should you wish to ask... And your next question is from Jon Tanwanteng from CJS. Hi, yes, I just wanted to follow up. When is the earliest you think... and others.

None: Okay, great. Okay. Thank you.

None: Thank you once again that is star one should you wish to ask a question Andrew.

And your next question is from Johnson Ranch <unk> from CJS Securities. Please ask your question.

Johnson Ranch: Hi, Yes, I just wanted to follow up on that last one with the.

Jonathan E. Tanwanteng: Yeah, look, I think you've got to kind of assume a couple of years to build a plant. I mean, it can be done more quickly, but, you know, just to be safe or fair in the analysis here, I'd call it two years to build a plant.

Johnson Ranch: The catalytic PHA I was wondering when is the earliest you think you could see commercial volumes and that product.

None: Just given the.

Johnson Ranch: The deals that Youre working on now the partners and the kind of the.

Johnson Ranch: With the pilots starting out.

None: Yeah look I think you've got to kind of assume a couple of years to build a plant I mean, it can be done more quickly, but but.

Stephen E. Croskrey: And since we're, you know, we don't actually have that customer partner ready to negotiate, we've got, you know, we've got the customer partners that we think we're going to be negotiating with, but they've got to validate the material with their customers first. So, you know, I think you probably need to add a year to that two years at any given time. So I think three years out is a fair date, you know, as in terms of the earliest date. Mike, if you could, just anything, remain relatively stable.

None: Just to be safe in our fair in the analysis here I'd just call. It two years to build a plant and since where we don't actually have that customer partner ready to negotiate we've got we've got the customer partners that we think we're going to be negotiating with but they've got to validate the material with their customers first.

None: So I think you've got to add probably at a year to that two years at any given time. So I think three years out is a fair.

None: In terms of an earliest date.

None: Okay, Great that's helpful.

None: <unk>.

None: Mike If you could just.

Michael A. Hajost: Yeah, I mean, I think we're really pleased with how we've been driving down OPEX costs. If you look at, you know, the fourth quarter, we were down another million year over year for the whole year 2023 versus 22. I think we drove down $14.4 million.

None: Any thoughts on Opex this year, that's going to be.

None: <unk> remained relatively stable or if theres any growth plans.

None: On the budget and the guidance.

Yeah, I mean, I think we're really pleased with how we've been driving opex cost down if you look at.

The fourth quarter, we were down another $1 million year over year for the whole year of 2023 versus <unk> 22, I think we drove down $14 $4 million.

Michael A. Hajost: And we're expecting to reduce those operating costs again in 2024, year over year versus 23, in the range of about $4 million or so. You know, we've gone through, you know, rationalizing headcount, we've gotten rid of a lot of outside services and consultants, we're utilizing our own staffing capabilities to do a lot of those things. We've gotten some, some better insurance rates.

None: We're expecting to reduce those operating cost again in 2024 year over year versus 23 in the range of about $4 million or so.

None: We've gone through.

None: Rationalizing head count we've gotten rid of a lot of outside services and consultants or utilize their own our own staff and capabilities to do a lot of those things we have gotten some some better insurance rates. So a number of things across all of the board. If you look at everywhere.

Michael A. Hajost: So a number of things across all the boards; we're looking everywhere. That's kind of where we ended up, which, you know, we're really pleased because it's just been a nice, you know, year over year change now for a couple years and getting those costs down, and just last, before I go, just any thoughts. Yeah, we can. You know, we mentioned in our press release that our year over year growth with PHA for the quarter would be approximately 60%. And I think it will probably exceed 60%.

None: Where we ended up which really pleased because it's just been a nice.

Year over year change now for a couple of years and get those costs down.

None: Got it that's helpful and good to hear and just last before I go.

None: Any thoughts on.

None: Volumes in Q1, we're pretty close to the end of quarter anyways.

None: Yes, we can.

None: We mentioned our press release that our year over year growth with PHA for the quarter will be.

None: Approximately 60% and I think it will it will probably exceed 60% at this point.

Stephen E. Croskrey: Hey, John, if I can add on the optics also. What? I'm sorry, John. Go ahead, John. Yes, but we're not; we haven't provided any guidance.

None: Sure.

None: Hey, John if I can add them also on the Opex.

None: I'm sorry, John.

None: I'm sorry go ahead Jonathan.

None: In Q1 last year.

Jonathan: Yes, but we're not we haven't provided any guidance on that.

Jonathan E. Tanwanteng: Sorry, go ahead. Hey, John, I want to just add one thing I think it'd be good for everybody to know, in terms of your models, all that stock-based comp, you know, it's been running up, you know, close to $56 million a year, I think, in 2023. And a lot of those large grants are falling off; we're expecting something as close to about $4 million for the full year 2024.

None: Okay sorry.

Alright good.

None: Hey, Jonathan ones, just add one thing I think it would be good for everybody to know.

Jonathan: In terms of your models all of that stock based comp that's been running close to $56 million a year I think in 2023 and a lot of those large grants are falling off were expecting something closer to about $4 million for full year 2024. So I think thats just a good thing for everyone to come no.

Michael A. Hajost: So I think that it's just a good thing for everyone to kind of know not to have that, you know, large piece of noise, you know, in your models. Thank you. Okay. Thank you. There are no further questions at this time. I will now hand the call back to Stephen Croskrey, Clark Political. Thank you for your time, everybody, and for your interest in Danimer Scientific. We're pleased with our recent progress and the additional customer opportunities that have been presented to us. And we look forward to talking to you again soon when we present our first quarter earnings, which will be coming up in just several weeks now. Thank you. Ladies and gentlemen, the conference. Thank you all for joining us. You may

None: Not to have that.

Every piece of noise.

None: In your models.

None: Yeah.

None: Got it thank you.

None: Okay.

None: Thank you.

No further questions at this time I will now hand, the call back to Steve.

None: Remarks.

Steve: Thank you for your time, everybody and your interest in Danaher scientific we're pleased with our recent progress and additional customer opportunities that have been presented to us and we look forward to talking to you again soon when we when we present, our first quarter earnings which will be coming up in just several weeks now thank you.

None: Thank you.

None: Ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.