Teknova(US:TKNO)2025-05-09 20:17PART I. FINANCIAL INFORMATION Condensed Financial Statements (Unaudited) Unaudited Q1 2025 financials show revenue up 5.4% to $9.8M and net loss reduced to $4.6M, with key notes - In January 2024, the company implemented a workforce reduction of approximately 35 positions, incurring $1.3 million in related costs for severance and termination benefits, which were recorded in Q1 202432 - On March 3, 2025, the company entered into a Second Amended and Restated Credit Agreement with MidCap Financial Trust, providing a $28.245 million credit facility, including a $23.245 million term loan and a $5.0 million revolver, maturing on March 1, 2030525356 - In January 2024, the company repriced 1,631,016 outstanding stock options, resulting in an incremental stock-based compensation expense of $0.9 million6465 - A legal claim from a former employee regarding labor laws was settled for $0.4 million, accrued as of March 31, 2025, and paid in April 202575 Condensed Statements of Operations Q1 2025 revenue rose to $9.8M, gross profit to $3.0M, and reduced operating expenses narrowed net loss to $4.6M Condensed Statements of Operations (Unaudited) | | For the Three Months Ended March 31, | | | :--- | :--- | :--- | | (in thousands, except per share data) | 2025 | 2024 | | Revenue | $9,795 | $9,290 | | Gross profit | $3,007 | $2,209 | | Loss from operations | $(4,964) | $(7,986) | | Net loss | $(4,645) | $(8,097) | | Net loss per share—basic and diluted | $(0.09) | $(0.20) | Condensed Balance Sheets Total assets decreased to $114.0M as of March 31, 2025, primarily due to reduced cash and investments Condensed Balance Sheet Highlights (Unaudited) | | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | (in thousands) | | | | Cash and cash equivalents | $3,377 | $3,708 | | Short-term investments, held-to-maturity | $22,896 | $26,688 | | Total current assets | $39,733 | $42,776 | | Total assets | $113,993 | $118,769 | | Total current liabilities | $7,045 | $11,211 | | Long-term debt, net | $12,989 | $9,443 | | Total liabilities | $35,388 | $36,375 | | Total stockholders' equity | $78,605 | $82,394 | Condensed Statements of Cash Flows Net cash used in operating activities improved to $4.1M in Q1 2025, with overall cash decreasing by $0.3M Condensed Statements of Cash Flows (Unaudited) | | For the Three Months Ended March 31, | | | :--- | :--- | :--- | | (in thousands) | 2025 | 2024 | | Net cash used in operating activities | $(4,103) | $(6,558) | | Net cash provided by investing activities | $3,824 | $13 | | Net cash used in financing activities | $(52) | $(343) | | Change in cash and cash equivalents | $(331) | $(6,888) | | Cash and cash equivalents at end of period | $3,377 | $21,596 | Notes to Financial Statements Notes detail revenue disaggregation, a new credit agreement with covenants, and a significant customer concentration Revenue by Product Category (in thousands) | Product Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Lab Essentials | $8,117 | $7,266 | | Clinical Solutions | $1,162 | $1,718 | | Other | $516 | $306 | | Total revenue | $9,795 | $9,290 | - A single distributor customer accounted for 22% of revenue in Q1 2025, up from 16% in Q1 202440 - The new credit agreement includes a minimum net revenue requirement of $39.0 million for the twelve months ending December 31, 2025, and a minimum cash requirement of $8.0 million55 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management analyzes Q1 2025 results, highlighting a 5.4% revenue increase, improved gross margin, and reduced operating expenses Results of Operations Q1 2025 revenue increased by 5.4% to $9.8M, driven by Lab Essentials growth, improving gross margin and narrowing net loss Results of Operations Comparison (in thousands) | | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $9,795 | $9,290 | $505 | 5.4% | | Gross profit | $3,007 | $2,209 | $798 | 36.1% | | Total operating expenses | $7,971 | $10,195 | $(2,224) | (21.8)% | | Loss from operations | $(4,964) | $(7,986) | $3,022 | (37.8)% | | Net loss | $(4,645) | $(8,097) | $3,452 | (42.6)% | - The increase in total revenue was driven by a $0.9 million (11.7%) rise in Lab Essentials revenue, attributed to an increased number of customers88 - Clinical Solutions revenue decreased by $0.6 million (32.4%) due to lower average revenue per customer89 - The gross profit margin increased to 30.7% in Q1 2025 from 23.8% in Q1 2024, primarily due to higher revenue and lower overhead costs92 Liquidity and Capital Resources As of March 31, 2025, the company had $32.7M in net working capital, supported by cash and a new credit facility - As of March 31, 2025, the company had $32.7 million in net working capital, which included $26.3 million in cash and cash equivalents and short-term investments100 - The company entered into a Second Amended and Restated Credit Agreement on March 3, 2025, providing for up to $28.245 million in loan commitments, subject to covenants including minimum revenue and cash requirements101 Net Cash Flow Summary (in thousands) | | For the Three Months Ended March 31, | | | :--- | :--- | :--- | | | 2025 | 2024 | | Net cash used in operating activities | $(4,103) | $(6,558) | | Net cash provided by investing activities | $3,824 | $13 | | Net cash used in financing activities | $(52) | $(343) | Quantitative and Qualitative Disclosures About Market Risk The company, as a smaller reporting entity, is not required to provide market risk disclosures - Alpha Teknova is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk113 Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025116 - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls117 PART II. OTHER INFORMATION Legal Proceedings The company is not currently a party to any material legal proceedings, with other contingencies detailed in the financial notes - The company is not a party to any material legal proceedings at this time121 Risk Factors No material changes to risk factors from the 2024 Annual Report, reiterating ongoing operating losses and potential stock dilution - The company has a history of operating losses, including a net loss of $4.6 million for the three months ended March 31, 2025, and may incur losses in the future124 - A significant portion of the company's 53,437,060 outstanding shares of common stock are available for resale, which could cause the market price to drop125126 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities or stock repurchases during the quarter - There were no unregistered sales of equity securities or company stock repurchases during the reported quarter129131 Defaults Upon Senior Securities The company reports no defaults upon senior securities - None132 Mine Safety Disclosures This item is not applicable to the company - Not applicable133 Other Information A board member adopted a Rule 10b5-1 trading plan to sell shares for tax obligations, with no other similar plans by officers or directors - On March 12, 2025, board member Martha J. Demski adopted a Rule 10b5-1 trading plan to sell a maximum of 8,000 shares of common stock, with sales eligible to begin on June 27, 2025134 - No other officers or directors adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025135 Exhibits This section lists all exhibits filed with the Form 10-Q, including credit agreements and SOX certifications - The filing includes key exhibits such as the Second Amended and Restated Credit Agreements (Term Loan and Revolving Loan) and certifications from the CEO and CFO pursuant to Sarbanes-Oxley Act Sections 302 and 906136137