Piranha Pool Presentations

I'd like to welcome you guys to our Piranha Pool. It's our third installment, and I'm your moderator, Stephen Silverman. My firm is Dornmayhew Capital Advisors, offices in Houston and Troy, Michigan, and we're investment bankers for the middle market. Before I introduce our piranhas, I thought it might be interesting to look at the definition of a piranha in Wikipedia. The piranha, as defined by Wiki, is a freshwater fish that inhabits South American rivers. They're known for their sharp teeth, powerful jaws, and voracious appetite for meat. These three folks up here actually share every single characteristic other than they have a voracious appetite for deals. And that's exactly what we're here to talk about today. We have three presenters. and we also have a 1-minute elevator speech. First, I'd like to introduce Sid Shaver, who's going to introduce his client.

Welcome everybody.

I'm Sid Shaver with Statesman Corporate Finance in Houston. It's my pleasure to introduce Sean Gohin with Zonesty. We're working with him on exploring a number of liquidity alternatives, and I look forward to hearing what he has to say today. I've known Sean for I don't know, a lot longer than most people think, 20-something years now. But I'd like you all to welcome Sean. And by the way, his wife is sitting down here and did not want to be introduced, but this is Stacy Goving, and she's going to be assisting him today. So because I don't listen, go ahead, Sean.

Thank you.

Today I'm going to represent a company called Zonesty and High Energy. One company I raised about $1 million of capital right off the bat, and that's Zonesty. On the other side is going to be a company called iEnergy North America, and that is the broker retail part of our company. What is Zonesty? Zonesty is a company that's been— is the Priceline of the power industry. So essentially, we have made the power brokerage firms come compete for your business. Every day we get a matrix pricing. That matrix pricing is downloaded into the system. Into the system we give you the best prices of that day from maybe 10 different companies on a daily basis. It does the same thing for residential. Our focus, our primary focus with Zonesty is going to be companies that average about 250,000 to 500,000 kilowatts. And our other side of the company is on the retail brokerage side, which I'll get to y'all later. We don't have brokers, we don't have phone calls, everything's based on online service. So we took a lot of the cost and exposure to these energy companies and took it off their plate and put it onto us. So you can get online with us and get a 5 to 8 minute contract in the commercial space, which has never been done in the industry. There's companies that have lead generation, but nothing like where you have an online contract and in that matter of time you get credit checked. Beautiful thing that's been set up. We're probably about a year in advance on most of the companies that we've at least watched and from a competitive standpoint. So I'm going to let you listen to this real quick. I think this will give you a broad overview of what we're about. Hopefully the sound works.

They work for commission and represent only certain providers. Often, the rates they quote do not include the additional fees that will show up on your monthly bill. There are also websites that claim to help you find the best rate, but they're usually just lead generators for brokers who will make a sales call to you later. Obviously, you need electricity, but the monthly cost can really put a dent in your budget. So how can you truly find the best rate from a provider you can trust? Zonesty.com is a one-stop shop to find trusted options for saving on electricity. Easily make your own confident decisions on which provider is best for you. No sales pitches, hidden fees, or misleading claims. Zonesty gives you honest, transparent pricing from some of the most reputable providers who compete with each other to earn your business. From your computer or mobile device, quickly and easily compare the differences between providers and choose the best option for you by electronically signing a new and improved agreement. With Zonesty, you eliminate the middleman and his unnecessary fees and are able to make your own decision with confidence. No hassles, no hidden costs, and no interruption in your services. You will simply see a change in your electric bill, a change for the better. Zonesty. Click.

Shop.

Save on energy.

Next. So, iEnergy was founded in 2010. This is not the Zonasi platform, but it's iEnergy North America. What we did is we built a brokerage firm selling to companies that are about 500,000 kilowatts up to, you know, 40-50 million kilowatt deals. So there are mid-sized, large capital markets that we went after for iEnergy North America. Profit margins between the two companies of Xonesty and iEnergy, about $2 million annual. We have about $3.5 million of revenue that's locked in for our second half of our contracts that we've already signed. So we average about $2 million annual right now and $3.5 million of future income. iEnergy, the problem that we ran into with iEnergy, we had some CEOs, CFOs come to the company or to my company and said, hey, how do we get to the place where we can start managing the small commercial space. And I said, I need to think about this. Give me a— and it was 2 or 3 major companies in Houston. And when I got back to the office and started thinking about it, I watched a video that came on from Priceline, Expedia. And I started thinking about it. And I went, wow, I could do this in the power business. So I put this team together. I went and raised $1 million, found the team, got some reliant, some senior executives from different companies. Took about a year, year and a half of hundreds of hours of algorithms, math, and stuff that I can't do. I can look at the large picture, but no way could I do what they did. So we came together with a company called Xonesty, put together the platform. It took us about a year and a half. So in October of 2013, I pretty much got rid of everybody after that point. My spend was about $47,000 a month. Once I got rid of the team that we structured, I put them all on 1099 so I could use them on a monthly basis. Came in, took over the day-to-day activities, and found out that I could get it down to about $14,000 a month spent. So I really got my, my monies down on expenses. I've got money left in the bank. And finally I said, you know, where do I go from here? So I hired a chief marketing officer, Jill Adams Stevenson. She came in and her primary focus was to get us from page 200 on Google, which we were completely terrible at— to page 2 today. And that was about a year. So I hired her back in November of 2013. So today we're on page 2 with 17 keywords. We're building about 30 pages a month on our web page to get us distributed throughout Texas. And we're about to roll out throughout the US. We've got all our contracts in place. First question that most people ask me is, what's the issue of not other companies getting into the market space? Well, you can't get into the market space if you don't have the relationships, you don't have the key players that trust and know that you're a good broker, right? You gotta have the people that trust you. And we're in their backend offices, so we know what's going on in their contracts, we know their contracts, their VPs that have to put their name on the line for Xhonesty to present their daily pricing. So that's one of the key things that we've really built upon. And I think when you see what the future holds for Many of you may not have deregulation in your states. There's 16 or 17 states right now that deregulated. They're coming.

It's—

they get voted on every year. Whether they make it or not, it's going to start happening. So, I think with deregulation, all the other states coming along, and our rollout, we can change the way people buy power. Everybody's on their phones all day long. Everybody's on their computers all day long. And buying power is a hassle. In the small commercial space. There's a huge market missing, and I think we've figured out how to fill that void. So that's it. Questions?

Thanks. I apologize.

Are we live?

We good?

All right, super. In my excitement to talk about the piranha's teeth earlier, I neglected to actually have the opportunity to to introduce our piranhas. And so let me just introduce them quickly and then they can jump into the Q&A. I also have one announcement to make from our team. The event tonight at the Foundation Room House of Blues, we're actually oversold for the event. And so if anybody did purchase a ticket and was not interested to go or couldn't make it, if you could please see the registration table staff and maybe reallocate your tag, we'd appreciate it. Without further ado, we have Michael Pfeffer with Post Capital.

Thanks, Steve.

I'm Michael Pfeffer. I'm one of the co-founders of Post Capital, a private equity firm in New York. Our strategy is to invest in businesses with a minimum of $2 million of EBITDA up to about $20 million. Our strategy is very much centered around executives. We have what we refer to as an executive-first strategy, is to find really smart, talented executives with a great track record. And a vision for their industry, and we partner with them to go find a business to buy. We'll also back an existing company to provide growth capital as well. We manage a couple different pools of capital. The most recent is a $100 million pool that we just closed over the past few months. Thank you.

Thanks, Michael. And next we have Jeffrey Kadlec with Evolution.

Yeah, Jeff Kadlec, Evolution Capital Partners. We are control growth equity committed private equity fund focused on providing capital to second-stage companies nationwide. We define second-stage companies as companies that have $4 to $10 million in revenue, 20 to 50 employees, at least half of them are profits. They're established and profitable businesses, oftentimes been around for 5 to 30 years. So a lot of people would define these as family or lifestyle businesses, and we want to work with lifestyle businesses that want to go for it and take it to to the next level. So we're looking for opportunities where these small business owners want to continue on with the business rather than being bought out. I would like to add that last February at the Winter Conference, there was a group here that presented called Squeeze In. I don't know if anybody of you remember, but they had a series of restaurants that provided outstanding omelets, like $20 omelets, but they're worth $20 as we checked it out. We actually issued a lever of 10 to the company, and as we worked through the model, it really became very apparent that they didn't need capital to grow their business. But I bring that up simply because this is a legitimate, you know, panel that's looking to put money to work, and we're thrilled to have companies like Xonesty, iEnergy up here presenting with the hopes of having an opportunity to put capital together.

So thanks, Jeff. And last but not least, we have Ken Hoyer with Kidd Co.

Good afternoon. My name is Ken Hoyer. Kidd Company is a family office investment group. We're based in Greenwich, Connecticut, really investing on behalf of the Kidd family. My partner Bill Kidd's been an investor in lower middle market businesses for going on 40 years. You may have bumped into him at the conference this week. We're really generalist investors looking for not too dissimilar to the other folks up here, family-owned and operated companies, typically under $10 million in EBITDA, where the founding shareholders are looking to bring in a partner to help them take their business to the next level. We typically buy a controlling stake of the company from them and then partner with them to really bring the arms and legs to a strategy where we can supplement the customer relationships and employee culture and everything that they've done to make their business great. We believe that together we can take it to the next level.

Terrific, thanks. Well, let's go ahead and jump into Q&A. The format here is for these guys to go ahead and fire questions. We also have some microphones in the room if anybody would like to pose a question either during or after these questions by the Piranhas. Please just raise your hand and we'll come find you.

I'll go ahead and start it off. Thanks for the presentation, Sean. We're disappointed that you weren't able to get your marketing person to come and join us and have the full team to present. Y'all go to YouTube and see. Check it out on YouTube. I guess what you were describing was very much was the value proposition to the customer. And a couple of questions that jump out is typically how much money do you save for the customer? And then what's the business model for your business?

On the small commercial space, it's 20 to 30% typically because our margins are only— I don't want to get into this— it's 3 mils on every deal that we put in. So typically, if you go to my brokerage firm, it's going to be 7 mils to 10 mils on small commercial. So our value proposition is defined by how much margin we put on every deal, and it's based on 3 mils.

And the 3 mils is how much you receive?

3 cents of a penny, yes.

And that's how much you receive on it?

Right.

And it's all included in our cost. So when you look at our model of our company, our profit margin is about 30% to 50% on an annual basis on our profits.

And what's your go-to-market strategy? How do you go and sign up customers? You mentioned the Google Pages. Is it essentially just all online, or do you have another way of going to market?

In Texas, with Zonesty, it's all online. But a lot of times you'll find with our social media that we've done and developed in our key affiliated partners, we have driven— in Texas we have 10,000 brokers, so the competition is fierce. So you have to have great content, and you have to be able to get out there and really have affiliations and Google paid— way up on the Google pages, but also having these listing pages in every city. So you always want to be coming up on the top 1 or 2 of those those cities every time somebody clicks on energy. And we're, we're blowing it up right now. So we're doing fantastic in that part.

That's great.

Thank you.

Is there a unique regulatory environment in Texas that's different than the rest of the country? And what kind of regulatory environment do you need to be successful to execute your strategy?

So there's no— in Texas, we're deregulated. We have something called Power to Choose. And we are going after that power to choose because what they do is they give you rates, let's say 5 cents, and then they don't give you your all-in cost, so it may be 7 or 8 cents on a deal. So you never know what you're currently paying. That's one of the issues that we're running into with brokerage in general is there's no really format for pricing for these companies. So even in Pennsylvania, Illinois, Illinois is getting more and more strict, but where they're starting to say you need to disclose your fees, that's where it's headed. But again, it's open range right now. So all these new companies or new states are really trying to learn it.

And maybe I missed it, but can you talk a little bit about how you all get paid through this process and really where you think you can take it if you roll out your strategy out to other geographic locations? You had mentioned the margin, but what does that mean in absolute dollars?

So right now we're doing $2 million annual between iEnergy and Sonesty. Our goal, if we could— if we get 13 other states, would be $26 million annual, which means on our profit side we probably— and I'm gonna be just bare bones— be 30% of that. I just need to have— this is our next level— I need to have call centers and I need to have marketing dollars to get us to to that next point to where I can get to these other 13 states and provide the structure and the marketing I need to move forward.

And do you guys measure like customer acquisition costs? I mean, it sounds like you've got some calling effort and you use the online strategy very, very well, but how much money do you need to invest to get that next dollar of revenue?

So the energy companies right now are spending $926 to get one customer on a commercial piece. Zonesty is costing about $326 to acquire a customer. Okay, so we definitely have to keep our margins where we can become profitable, but we totally understand the concept of how to bring the money beyond— why the online process is so much cheaper and that the energy companies don't have to have in-house sales groups. And my call centers would run me $5,000 to $6,000 a month. Companies like Exelon, they spend $20,000, $30,000 a month, and they acquire about, oh, 500 to 1,000 customers on $5,000 a month. It's about 500 customers a day if they're managing that on a weekly basis.

And my last immediate question, how do you differentiate yourself from other groups that might be out there trying to execute the same thing?

So there's a company called Choose up in California. They have—

what they do is they—

it's a lead gen. So somebody goes to their website, they type in, I want my commercial energy, and then within 30 seconds you've got 10 brokers calling you. It's the freaking most annoying thing I've ever been through. I've done it myself, and within that morning I'm getting 15 broker calls. And then you get so confused with it, you're going, oh my God, this is 4 cents, this is 5 cents, and you don't know what to do. And it just— to the point where you just either sign up or you hang up. So there's— we feel that we're about 6 months to a year ahead of most everybody with our technology. Because of the relationships, and we can roll this out on an annual basis very quickly. I mean, we can get it out to all the different states and push forward. I was hoping to have a presentation for y'all to show what we just built, but it didn't happen today. So, but we're very close to rolling it out to all the deregulated states.

Yeah, I've got a somewhat related question. So in the markets that are deregulated today, it would seem the barriers to entry are fairly low for companies to come in and do what you do. I'm familiar with others in Texas and other states that do that. So with the exception of Texas, how do you intend to retain a competitive advantage or that head start? It would seem a lot of me-too companies are going to—

Perfect.

So the broker side, we're already in all the other states, right? So we know we're up against competition every day. On the online processing of other states, There is no competition because nobody's willing to go spend like I did a million— and I shouldn't say no one. There is companies trying to facilitate concepts like we have, but they've never had it where you can go online, have the 1, 2, 3 click-through, 8-minute contract, and not have to deal with a broker. That's just not out there yet. It's going to happen, I'm telling you. People are already coming up my tailpipe with it, but it hasn't happened yet.

So I'm ready for them to do it.

But I think we're ahead of the market space right now to where if I can make— be the first movers or one of the top 2 firms that have a heavy marketing campaign, I can make the numbers work. I've been successful with, you know, iEnergy started in 2010. We averaged, I mean, consistently $2 million a year between the 2 companies. So I feel we can blow it out in every city—

sorry, in every state.

So your expectation is that individual consumers are going to go online and go through a process has to complete an application or something to find out what their options are. And because you're the lowest, most cost advantageous, they're going to select your program over the other alternatives.

As long as I make it easy, simple, and a process that they understand, which we think we've developed, I think we can make it residential. We're going to— there's so much competition in that space. That's not what my focus is. I just do it because the energy companies make me do it, I'm going after the small commercial space. That is a market I can tell you that's never been focused on because the profits— my profit margins are not nearly as great on a small commercial as it is. I do the same amount of work for small businesses as my large ones. So that's why I came up with the Zonacy concept. And I'm not going to get off my focus of small commercial space.

All right. Any other questions from our Piranhas? Or how about the audience? Any questions out there for these folks?

Go ahead.

So I have a question. Who is actually controlling the information that— so you're essentially a platform, correct?

Yes.

So if I'm a small business owner and I'm using your system, how do I know that the information is accurate? Like, who is— am I dealing directly with the energy company? Are they on the other end? And how is that working? What's your quality control, I guess is my question.

So if you pick— I'm gonna use Champion Energy or Reliant, right? If you pick that company, it's— our algorithms are based on their contracts. So if you're putting— you pick NRG, right? Our contracts are built, structured together to where it hits NRG's platform and it gives you their all-in pricing at the end, and you get your contract right there. Does that answer your question? So NRG or Reliant is the end, the end person, but our technology is working with their back office at the same time.

Okay, but are you vetting all of your suppliers then? I mean, I would think there's a— it's your reputation on the line if somebody has a bad experience using your platform, right? They purchase something, they don't get what they want. Eventually it's going to come back and hurt your reputation.

Exactly. Now, there's things that do happen in the power business, but when it comes to pricing, especially with companies like Reliant, they are sticklers. Even if we miss a tenth of a mil, they're going to blast us. So it is very closely watched between both companies, and we have to be that way because these are contracts. I mean, these contracts last from a year to 4 years.

Right?

So you need to understand that the pricing has to be right for the client. But there is mistakes that do happen. That's just part of it. But I think we've made it to where it's manageable.

Thank you.

All right.

We have time for one more.

Yes.

Who's your main competition?

Choose Energy up in California. They started off like we did. They raised about $1 million. They came in at $4 million. Then they raised another $8 million. But technology-wise, they're better than us on residential, which I don't care about. I care about the small commercial space. But really, them, a company called Bounce, but they're again, they're all lead gens. So all these companies are providing lead generation platforms versus us having the whole process go step 1, 2, 3. And we're going to get better and better at it, especially now that I'm ready to start marketing. We've turned on the faucet probably 4 different times, and we did about $100,000 to $150,000 in revenue within those 5 to 6 months. And again, I periodically check them. When we turn the systems on, we do blow it up really well. So it really just— now it's time for me to do my— what I love doing the most is market. I hated this other stuff we did. So I'm ready to go forward. That's what this new money's for.

Great. Thank you very much. I'd like to thank our presenters.

Thank you.

Great, thank you.

Next, I'd like to welcome Brad Kipperstein from his company Vitapark, fresh off his appearance on CNBC. I'd like to welcome Brad Kipperstein.

So as Steven alluded to, Power Pitch on CNBC. They reached out to me about a month ago. So I filmed last week in New York, and it should air sometime next week. So with that being said, my name is Brad Kifferstein. I'm the founder and CEO of Vitaperc. In today's fast-paced, active lifestyle, everyone is looking for ways— can everybody hear me?

Okay, great.

I'm not sure.

Sorry.

Everyone is looking for ways to be healthy and make smart decisions. We have smartphones, smart cars, smart water, and now with Vitaperc, you can smart your coffee. Vitaperc is an easy way to blend your health and your coffee all in one cup.

Each package—

they look like this—

provides a boost of 15 vitamins and minerals that support your energy, memory, heart health, and nutrition. Offered in vanilla, hazelnut, energy, and original, Vitaperc is gluten-free, naturally flavored, and just 5 calories per serving. Nutritious and delicious is truly the only way to describe VitaPerk with your coffee. The market for VitaPerk is massive. Think about it. Every single day in the US, up to 400 million cups of coffee are consumed. And Americans spend over $20 billion a year on supplements. We aspire to be healthy, but we get busy, we forget, and we fall off the wagon. But we never forget our coffee. VitaPerk marries two multi-billion-dollar industries: coffee and supplements. It is the most innovative product at the coffee market since the Keurig K-Cup. VitaPerk is what your coffee has been missing. Start perking your world today. So that's a 60-second pitch. And we launched in late February. I'm in Detroit. We're in about 75 stores, getting phenomenal response. One of our strategic lead investors was a founding team member of Keurig. And if you guys want samples or if you have any interest, come find me and I'll gladly give you product samples.

Great.

Thank you, Brad.

And Brad is going to be available tonight at the House of Blues Foundation event, and if anybody wants a sample or obviously has some questions. I'd next like to introduce David Carmen, who's going to introduce his client, Aspire. Aspire Brands, Inc. Well, thanks, Steve.

Always fun to rub elbows with fellow piranhas. I'm going to introduce two companies. The first one is called Aspire, and they've created a healthy energy drink that is selling both here and abroad. And then you're going to hear from Automated Manufacturing Solutions, AMS for short. and they have a proprietary technology which they use to create modules that automate the manufacturing process and make it quicker and more efficient. Chris Waddington, who is the co-CEO of Aspire, is going to deliver their pitch, but before we hear from Chris, we're going to hear some introductory remarks from Charles Walgreen, who is one of their major investors and involved in their day-to-day operations and helping to grow the company.

So, Charles?

Good afternoon. All right, hello, hello.

Hi, I'm Charles Walgreen. It's my pleasure to introduce Aspire and the key members of the Aspire team. My family's been involved in consumer brands for over 100 years as a leading retailer and brand pioneer in the drug channel. I came across Aspire and became interested in the company after first becoming a fan of the product and the talented team that developed the brand. As an experienced buyer of consumer brands at Walgreens, I feel Aspire is poised to create market disruption in the beverage category. It's doing so by following the growing revolution of America to make better choices of the food and drinks we consume and healthier lifestyles. Aspire, with its natural, good-for-you ingredients, healthy energy, calorie burning, is positioned as the everyday lifestyle drink at the leading edge of emerging functional, better-for-you beverage revolution. I'm not only an investor in the company, but I personally have accepted the role of Chief Development Officer, and I'm solely focused on using my best efforts to bring Aspire to deeply rooted national and global retail relationships around the globe. I hope you see the same investment opportunity that we do and invest in a healthier you. Without further ado, please allow me to introduce Darren Linnell, co-founder and co-CEO of Aspire Brands.

Thank you.

Yes, apparently I forgot about— you didn't worry about me. I'm just the founder. So yeah, I basically founded the company over in the UK about 5 years ago now. It was born basically out of the idea for me and Neil just creating something for ourselves. We're both into our fitness, both into our health. and really just wanted to create something that we could assist in losing weight and basically leaning up and assisting us with our sport. We created the product or started the company around 2009. It took a year to develop. During that stage, we worked with a company called Leatherhead Institute, who are one of the leading food development companies over in the UK. March 2010, it was ready. We launched it at a food and drinks expo in Birmingham. It was greeted with great expectation. It was was really cool. We had a great time there, and we really just went on then to develop the company and move things forward. By September, we were selling in the UK. We went on to sell across all the retail channels, all the major grocery channels, and then went on to sell into Europe. So places like Holland, Belgium, France. We're in Eastern Europe— Czech Republic, Slovakia. We moved out a little bit further into Turkey. We're now sold in the Middle East and Australia. During that process, I met up with a guy called Mike, who is one of the partners of the business, who was managed by Chris, and I met his team. We originally started talking about a distribution agreement. We got to know each other better. We developed that to a licensing agreement, and from there we then decided to partner up. So May of last year, we brought everything to Chicago. This is now the HQ. We're all one team over here. My co-founder Neil's still over in the UK looking after that side of things, but we're all based here. So We like to think of it as born in the UK, raised in the US. So that's what brings me here now. So I'll introduce you to Chris and he'll tell you a bit more about what we're doing.

Hi everybody, my name is Chris Wadlington. I'm a Chicago native and co-CEO of Aspire. I was running a marketing agency and doing some consulting work for about the last 15 years when I came across Darren's product, I should say, and thought there was an opportunity for it to be introduced in America. I thought it had some really good opportunities, mainly because of some of the problems that America is facing right now with the obesity and diabetes and some of those things that come from overconsumption of soft drinks. These were really the solutions in the marketplace for the— for how you would be able to solve those things before. Now we have a better solution. Aspire is an all-natural, refreshing cranberry or apple. I don't know if you've had a chance to taste it, but we have the product here for you if you'd like to try it. What its differentiation really is is that it helps you burn calories, and it does that by ever so slightly increasing your body temperature without raising your pulse rate, without raising your blood sugar or your blood insulin. So it allows you to burn over the next 3 hours after you drink a single can of product somewhere between 100 and 200 calories depending on your individual metabolism regardless of what you're doing otherwise. You could be sitting in the chair and you're still going to burn additional calories than you normally you would. So while it's not going to cure obesity or solve all of our problems, it is certainly an aid in helping us be able to manage our weight and try to goal ourselves to be healthier individuals. So it's full of natural ingredients, every, all of the active ingredients, C's, B's, for increased focus, you get your energy from that, all natural caffeine from a very high grade of green tea that is the base of the product. We also have approvals from both the FDA and the EFSA for our calorie burning claims. So we've had clinical study that has proven our point to both of those organizations. Who's our target audience? We thought that— we initially thought that mostly women because they were underserved in the energy category. Nielsen came out last year with a report that the fastest growing segment of energy drinkers was actually young women. That were drinking it, drinking their husbands' or their boyfriends' Red Bulls and picking up those products and their habits from their counterparts. So we targeted women initially, but we're finding that it's kind of a 60/40 mix actually. Men are buying it as well. They find it as a healthy alternative. We sit kind of in between Red Bull and Monster on the shelf, so they kind of find us in that space or in that cooler door. They see a natural, more healthy energy option, and they Choose it and they get the same benefits that they get from some of the reasons they drink Red Bull and Monster, but with not any of the sugars or the crash from sugar that you normally get when you drink an energy drink. We have a very experienced team. You've met Charles Walgreen, Darren Linnell, and myself. We've all been in the marketing of consumer brands for 20, 30 years. These are— Neil Blewett, he mentioned, was one of the co-founders. He's also running our international operations. Bill Goodwin is our Chief Operating Officer. We've all worked together for 15 years in my marketing consulting business at one time or another, so we've had a long-standing relationship. We have some outside advisors. One of them whose name I cannot mention, but I'm going to, his name is Harry Dernick. He actually is the co-CEO or the ex-CEO of Red Bull from 1997 to 2007. He's not allowed to be involved day-to-day in the business, but he befriended my young counterparts from England. He actually lives in England now. During his reign at Red Bull, they went from 300,000 cans a month to 300 million cans a month. So he has a fairly good handle on the energy category. And he's been advising us on kind of how to position the product initially. This was early stage before I got involved. And he's also helped us with some to develop some key partners, one of which is Avanzar. They're our distributor in Los Angeles. We're just getting ready to launch in Los Angeles. We've been test marketing in Chicago exclusively for the last year. These guys basically built the Red Bull market in Southern California from scratch. So he was at the very beginnings of Red Bull when they started distributing in Southern California. This is our newest addition, the Hand family. They're the Anheuser-Busch Budweiser guys here in Chicago. They're the largest distributor in the Midwest of Anheuser-Busch products. They've taken us on now and are starting to insert us into the 30,000 or so locations that they currently serve in the Illinois market. They've only been with us for a month. We're really excited about that relationship. It's got a lot of opportunity outside the Chicago market with all the different relationships they have with other Anheuser-Busch distributors around the country. Anheuser-Busch lost the Monster account when Coca-Cola and made an investment in, uh, in Monster and took it and put it into Coca-Cola bottling's distribution system. And so there's, uh, there's some animosity, I would suggest, for Anheuser-Busch trying to replace Monster in their, in their mix. And we are becoming that product for them. Um, we've won some awards, uh, a couple awards, uh, innovation for beverage as well as food and drink, which was a consumer's choice award in Europe. So, uh, we We now are found in all of these places: Tesco, ASDA, which is the Walmart of Europe, Billa, which is a large Turkish retailer, Albertsons, Walgreens, Amazon, Peapod, Juul, etc. We've sampled since June of this year— last year— over 1 million people here in Chicago. So we really believe strongly in the idea of putting the product in people's mouths and making sure that they taste and trial it. Because that's ultimately how they develop a habit and understand the product. And it gives us a chance to educate. So we do quite a bit of sampling in-store and in festivals. This is our most recent success story in Jewel-Osco. We continue to grow there. We've added 2 new flavors here in the next month. You drank the apple, which is brand new to the market. It's only been here about a week. And the mango lemonade, which we're going to be adding in August. And all of the retailers that we currently have have already pre-bought into those products. This is kind of how the financial model works. We manufacture, retail suggests $2.49. We have great gross margins, as you can see, 69% gross margin on the product. This is our sales to date. As you can see, we've grown exponentially each year that we've been in the market, and we're We're already at 1.1 million cans this year, and we kind of— we expect to do about 6 million in sales this year globally. That's our revenue to date. Again, we've grown substantially in the last quarter. You can see that we've already reached almost our year-end sales of 2014, and here we are in June. This is kind of our 5-year sales projection. This is both units in purple and the revenue in green. You can see our EBITDA growth is strong over the 5 years. This is strictly a merger and acquisition play. I guess I'm in the right place for that. And we expect to exit somewhere in the neighborhood of 4 to 6 years. These are our 3 products. The Mango is yet to launch, but it will be launching in September. And as I said, the major retailers that we already have on board are already accepted and pre-bought the product. So these are kind of the valuation considerations. We, we believe by year 5 we'll do about $33 million in EBITDA. The multiples in beverage right now are somewhere between 13 and 22x, so I'm using the low end of 13. We're looking— we're seeking a $5 million investment for our Series A round, and for that return on investment in 5 years, we expect the return on that $5 million to be about $108 million. That's pretty much everything I have. Thanks for taking the time to hear us, and I'll take any questions you have.

Terrific. So did our piranhas get the goodness?

Have us buy brands?

I'm up here drinking your product.

This is pretty good.

This is—

yeah, the apple acai.

I recommend it.

So a lot of times in retail, it's what is the investment or cost that you need to invest in your distribution network for them to take the chance and accept your product on their shelf. Can you explain a little bit more about your terms of arrangement, your sale arrangement with the companies?

Sure, it varies depending on the retailer. Some, some grocery are allowing us to go in with no real fees, and those are more of the cutting-edge, newer, high-end retail stores like Heinen's here in town, or maybe Wegmans on the East Coast, if you're from that area. Others are paying— we're paying slotting fees. We're paying an initial fee to get on the shelf. We're buying that real estate essentially. And those fees can vary anywhere between $4,000 to $10,000 a SKU, depending on how big the retail organization is and how much coverage you're going you're going to get. So a 7-Eleven will give you— will roll you out by region. Walgreens, we've just started putting product in their stores recently. We're in the 14 downtown Walgreens locations. So ultimately we believe that those fees are going to be a little bit more— they're a little bit more involved and they're more expensive basically because you've got 8,200 stores in the Walgreens chain and it may be, you know, only 185 in Jewel. So for example, Jewel, we paid $4,000 a SKU to get in on all 185 stores here in town. So it does vary, but there is a cost associated with the shelf space, no doubt.

I think it's worth mentioning on that point that the international stuff is all dealt with as master distribution agreements. So rather than the way that we work over here, everything's kind of wholesale. So they take care of all the AMP or the marketing side of things. We sell into them, then manage their territory as such. So the cost of doing business internationally, whilst the turnover is not as high initially, there's no real cost of doing business other than the time that we spend managing them.

Is the sale a sale though? I mean, if you sell into a Walgreens, let's say, and it doesn't turn, are you getting that product back or is the sale a sale?

In Walgreens, for an example, we are guaranteeing it. This is our first month in that chain. If in fact it did not sell well in the first month we have guaranteed the product and we would take it back out. Um, it has never happened to us yet though. We've never been not sold on shelf after we've been put on shelf, so we've never not been able to sell through even with the limited marketing budgets that we've worked with to date. And most of this raise is involving an additional amount of money for marketing. Almost all of it's going into that.

I think it's worth saying to that end that most of the buyers will give you kind of a year to prove yourself. When we talk to them, they give you enough time to at least come in if something's not going right to put it right and give you a chance to prove yourself.

So when I see this whole calorie burning thing, you know, it comes down to actually what I consume in addition to whether or not I drink your product. I mean, how do you justify the calorie burning aspect for somebody that's generally an unhealthy eater?

Well, it's not going to guarantee that you're going to, you're going to be you become slim, it's going to guarantee that you're going to burn a couple hundred extra calories every time you consume a can. So if you continue to eat the way you do today and you drank this product for a period of time, you would expect to lose some of that weight. Not— you won't become slim and fit, but you will lose some weight. We do something, we call it the Aspire Challenge. Every year, the first of the year, we do a promotion called the Aspire Challenge where consume 2 cans a day for 2 weeks and report your results before, during, and after. And most people, about 5,000 now, have reported over those 4 years, mainly in the UK, uh, anywhere from 2 to 10 pounds of weight loss with no additional exercise and no change in diet. So it does have those calorie burning effect, and over time it just adds to your lifestyle and your ability to manage your weight.

And, and you vetted this with regulators and say you're—

we're okay with you stating that both the EFSA in Europe, which is a very strict body, even more strict than the FDA, and the FDA's attorneys themselves have already evaluated our claims and have approved us for the statements that we make around calorie burn.

Okay.

Yeah, Jeff, I guess the more you eat, the more you have to drink of the product to keep up with it.

If I could eat a lot more and not exercise, this is gonna be a hell of a sale.

There you go.

It's a lifestyle beverage. It's something first you gotta like. You gotta want to drink it. You'll form a habit around it, and pretty soon you won't be able to do without it.

So, yeah, I mean, you kind of touched on this with Jeff's question, but I'm curious about making the health claims that you do in light of the regulatory environment we live in here in the US. I mean, I don't see Monster or Red Bull or even Diet Coke claiming to help consumers lose weight. I would think the FDA would require clinical trials or some sort of approval for you to make the health claims that you are?

Well, as I mentioned earlier, the FDA attorneys themselves have already evaluated our claims and our clinical studies and have approved our claims of calorie burning. So it does burn calories, that's a fact. It's been tried by— there was a product in market called Celsius, it still exists today, but in 2007 it came out with some of these same claims and they were sued immediately by about 4 different state attorney generals. They won all 4 of those cases because they did the same kind of clinical studies around their calorie burning claims that we did. Our ingredients are very similar. We're just better marketed in that sense. But at the end of the day, those things have already been proven. That precedent has already been set in the U.S. So we don't— we're not— we're very confident that the FDA won't in any way interfere with our ability to make the claims we do. It's really more of a lifestyle beverage. The calorie burning is an added value. But it's really something that's just better for you than any energy drink, any soda, anything else out there really in the market. The calorie burning is just the added benefit. We think it's our differentiation really in that sense. We don't see ourselves as a supplement. We're just an everyday lifestyle beverage. You'll find us on the main aisle of beverage. We're not, you know, in the supplement area or the diet supplement area. We're not trying to be the fat burner, green tea, you know. We're just, we're just a very, just a healthy product that ultimately you can drink every day and it'll help you manage your weight.

So how much money are you looking to raise now and what are you planning to use the proceeds for?

Um, can you flip next slide? So this is our— we've raised $1.5 million, almost all of it our own money, individual investors, family and friends, ourselves. And this is how we've used that money to date to get to That's the place we're at now. What we anticipate with the $5 million raise is this is how we'll spend our money, a majority of it going towards the marketing budgets that we need now to be able to build the kind of— the kind of marketing that's required to be a national success in the United States. We're in the process of building out the U.S. channels, developing all of our distribution relationships, and then ultimately that marketing brought to bear will help drive those sales and continue to have that product pulled through stores. That's more or less what we're spending our money on. That and the addition of 3 more flavors next— this fall that will not have sucralose, which is the only thing in our product. It's Splenda basically.

And it's—

we have about 1/10 of 1 packet of Splenda inside each can. But we're going to a stevia urethral combination, which will make the product entirely all natural and allow us into the whole Whole Foods and some of the organic and natural channels that we're not able to get into because of sucralose being part of the product mix. So we will have by the end of the year a total of 6 SKUs that will ultimately be sold in 4-packs and single cans.

And to say we're running almost out of time, but I'll be quick. First of all, congratulations. It sounds like you guys are getting some great traction.

Oh, thank you.

I love the fact you were able to get the CEO of Red Bull, or former CEO, to come join you, a guy who's been there and done that. That's great. I guess the one question, you know, a lot of crazy people, I would say, in this country, but probably in the world, and you look at this and say it's calorie burning. Is there any issue with sort of maximum amount of consumption that's going to cause any sort of challenges?

We make a recommendation, obviously, on the can. You'll note that it says that if you're sensitive to caffeine, you probably don't want to drink too much. This has about 80 milligrams of caffeine in it, which is about the amount of a cup of coffee in each can. So obviously, if you can consume too much caffeine, you might have some issues with sensitivity, you know, around caffeine. But other than that, no, I, I'm— I drink 3 or 4 a day and I don't really feel any negative effects from it other than I've lost some weight from drinking it.

But the third eye is going away.

When I first started the company.

Terrific. We are close to wrapping up. Do we have one audience, uh, question? Anybody got a question out What happens when you put vodka in it?

Well, the vodka works as it always does, so— and what it does do is it makes that drink calorie neutral. So a shot of vodka has about 180 calories in it, and we burn about that many calories. So essentially you can drink it with vodka, and obviously apple is for Appletini. The cranberry is for Cosmopolitan or Cape Cod.

We can't suggest you should mix it, but it tastes good when you do. That's what we'll say.

It's— on-premise is a big part of our plan. It's Phase 3, Phase 4, which will be, you know, to actually penetrate Red Bull's market of what's being drunk by— drank by a lot of the millennials now, which is the Red Bull vodka and those types of mixed drinks. We're after that part of the market. It's not our primary focus right now, but it's back in the background. And guys like Lakeshore are driving us into those on-premise locations with their alcohol trucks.

So, Chris, just one final question. Sorry, how long is the $5 million going to last you for?

We think we're gonna— we have one more raise to do after the $5 million, probably sometime late in 2016. We'll have enough valuation in the business to want to raise another We think $15 to $20 million, all marketing-driven, just national marketing campaign, you know, war chest if you will. Past that, we think we're done at that point.

Thanks.

So what are some of the key ingredients? And I know you have pretty good gross margins, but are there any commodity risks, whether it's shortage of a key commodity or price escalation of some of the key commodities?

Not, not very likely, to be honest. We've got quite a competitive— if anything, the more we start producing here in the US, the cheaper the price points will become. Most of the ingredients that we use, whilst they're a high-grade ingredient, are readily available, and it's just a unique combination that we use when they're combined together that works. So yeah, to answer your question, really the margins will decrease slightly as we filter out into more marketplaces, but we'll make a better margin on our cans as we produce more in the country. So it will kind of work in line with one another. Does that answer your question?

Just to add to that, we think we can hold our margins by what you just described, just manufacturing economies of scale and being able to continue to sell at the retail prices. We're following basically the Red Bull model price-wise, $6.99 in a 4-pack and single cans 2 for $5 most of the time on special. So it does work out.

Terrific. We're out of time. We want to thank Aspire Brands for the presentation and the samples.

Next we're going to hear from Steve Gager. He's the founder and CEO of Automated Manufacturing Solutions.

Hello everyone. As introduced, I'm Steve Gager. I am the president and founder of Automated Manufacturing Solutions. We're located here actually locally in Crystal Lake, Illinois. And I'm here to tell you about an outstanding opportunity in a market segment that is accelerating in growth like not seen before. Automated Manufacturing Solutions builds smart automation equipment that manufacturers like 3M, Hewlett-Packard, Ford, John Deere, and Caterpillar use to build the products that they make faster, cheaper, and with better quality. This is a $180 billion market in the United States, and $500 million of it, minimum, is business right here in the Midwest. In 2014, our revenues were $1.8 million, and we are on track right now in 2015 to be at $4 to $5 million in revenue. Our request for quote volume has grown from $6 million to $42 million. That's a 700% increase in just the last 12 months. This is totally unprecedented in this industry. AMS provides flexible, what we call future-proof solutions and they are in very, very high demand right now in today's manufacturing environment. We are currently raising $1 million to get to a $10 million revenue stream in 2 years. We have already raised $250,000. We are already planning a second round of $10 million in funding to target a $100 million valuation in 5 years. We're looking to fund strategic acquisitions and bolt-on businesses with that second raise. A couple of examples, people that might not be in manufacturing might not be completely familiar with what we do. We partner with our customers in order to provide solutions that help streamline their processes. We provide our customers with compelling solutions that gain competitive advantage. Major manufacturing customers such as ITW, Briggs Stratton, and suppliers to Ford, General Motors, Maytag, Motorola, and General Electric would all be our target customers. The first system that we've got on the top here is actually a a project for Briggs and Stratton. They're currently producing a product using 54 operators. Our system will reduce those— that labor down to 12 operators, which sounds like we're replacing jobs, but we're really not. We're saving jobs, because the alternative is to send the business overseas. This particular project is $3.25 million. It has a 2-year payback and a 10-year life cycle. So the justification is quite easy to do. Another project that we did recently was for a supplier to Chrysler. They were currently using one operator to perform these operations. It took a minute apiece. They got the idea that they could do this quicker, so they went to a company in Germany who provided them with 2 robots in order to do the loading of this product and reduce that down to 4 parts per minute, which was quite the accomplishment. We provided a solution that did it at 20 parts per minute, 3 to 5 seconds, as opposed to the 24 seconds that they were doing with the 2 high-end robots. That's a 20-time improvement on output. These are the processes and the equipment that we provide in order to help our customers be more competitive. Another system that we just recently delivered runs 4,000 different parts all on the same piece of equipment. We call this future-proof equipment because it's flexible enough that with a very short changeover time they can run many, many different products. So it gives them the flexibility in order to produce different parts very quickly. Time to market is very short. It used to take 2 days and $86,000 worth of tooling in order to change to a new product. Our machine does it in 17 seconds, fully automatic, with no tooling. We actually recently, or they recently, had a new customer, Maytag, that wanted a product that that did not exist before. This could typically take a couple of years to produce. In 2 minutes, we produced a brand new product off this piece of equipment and supplied it to Maytag. Our customer did. This gives us an opportunity to reduce our inventory. Many projects realize payback from just the reduced work in process and the associated costs. Smart automation is connected to the enterprise resource planning systems. It's like lean on steroids. We've built out our executive team. We're all very, very well versed in the industries. We've diversified over many different industries in order to reduce our risk. So our executive team and our management team comes from all different industries. The talent management team is all in place. We've also built out an experienced management team. All of our different departments are in place. We're building those teams out with broad range of experience in diverse industries. Each team is mentoring new team members in order to grow our capacity as part of our growth strategy in order to multiply. Financially, We're growing our core business over the past 5 years and are continuing to grow it in the upcoming years. We've actually realized 8 times revenue increase in the last 5 years and, and continuing to do so in the upcoming years. Our typical gross margins on projects to date are 35 to 45%. By targeting new projects utilizing the investments that we've we've created in the building block design, it's one of our differentiators, we're able to increase these margins to 50 to 60%, and in some projects actually as much as 80%. Again, serving diverse industries reduces our risk. Typical in our industry, if you focus on one industry like automotive, and automotive does this, you do this with them, basically. We focus across all different industries. We do automotive, appliance, pharmaceutical, consumer products, industrial products. Our standardized building blocks allow us to use the same type of equipment in order to address all of these different industries. From a mergers and acquisitions standpoint, factory automation and robotics is absolutely growing. There's some interesting metrics here you can see on the screen, and I'm actually going to read through this so I get it right. We are seeing some industry consolidation and some interesting activity using an EBITDA multiplier as a simple comparison. The first interesting move is in the acquisition of a company called Exmation by BBS. Though owned by CanSeda, a German firm, its major revenues are predominantly earned in North America. BBS Automation, also based in Germany, bought them specifically to expand into the fast-growing North American market. Another example, ATS in Canada is a company that has its roots right here in Chicago area as Midwest Automation, which was later bought by Detroit Tool. They eventually restructured and reorganized as ATS and expanded with another acquisition of a company called Sornamat, which is right here in Roselle. That was in 2010. ATS has now diversified or divested their solar energy business in order to focus solely on manufacturing automation and have made two recent acquisitions. The first IWK, based in Germany, added some international customers and also a manufacturing equipment service component, which is something AMS will be adding to increase our value. This services part of our business has been growing rapidly. They then acquired M&W, which is a German company that has a library of standard designs plus their system integrator capability, much like ours. It's the same business plan. ATS paid multiples of 9 to 12 times EBITDA for these businesses. Another trend that we have observed is the acquisition of automation solution providers by electrical component distributors in their effort to move up the food chain and improve margins by becoming a provider of value-added solutions in a high-growth industry such as ours. We are seeing this in the United States with the acquisition of a Minnesota company with revenues of $33 million being acquired by Graybar out of St. Louis. The largest of these was the purchase of Invincis by Schneider Electric for $5.2 billion at a multiplier of 11.9 times EBITDA. Our strategy of building out our core business as a solution provider and laying on the manufacturing services and growth through acquisition will certainly add value to AMS over time. Our business will gain even more value as the Internet of Things continues to impact the manufacturing sector. Our potential acquirers would be: 1, any manufacturing company looking looking to become more agile and improve their bottom line, or an automation company looking to add our specific intellectual property and broad industry expertise to their portfolio. In this investment opportunity, in our first round, again, we're looking for $1 million. We've already raised $250,000. This gets us to about $10 million in 2 years of revenue. The pre-money valuation of our business today is $4 million. We're here today because we're seeking the right partner with the resources to also fund our second round and build value more quickly. With the right partner, we could easily do $10 million next year. This would accelerate our timeline for growth to reach our $100 million our goal. Our business model, with all of the standards that we've developed, triples EBITDA to 30% of revenue. Our exit strategy is sale of business within 5 years. AMS currently is a C corporation. I'm the 100% owner, and we're currently looking for a combination of debt and/or equity opportunities with the right partner.

Questions?

Terrific, thank you.

Thanks for that, Steve.

A couple of quick questions. So I'm trying to understand the business model. Are you engineering and then ultimately manufacturing a large piece of capital equipment for your customers, and you do all the manufacturing in-house?

Are you outsource? We are totally vertically integrated. We do all the mechanical and electrical, software and engineering. We design and build in 3D solid modeling program mechanically. We build the equipment, we wire, program, debug, and install the equipment. Projects varying from, you know, $100,000 to $3-4 million right at this point.

Got it.

And then, and then you provided us with quite a bit of comparable valuation information. If I do the quick math, it looked like those companies were valued at about 10 times EBITDA?

Yes, that seems to be pretty average.

And I think you said you had even— or you had revenue of $1.8 million at a 10% EBITDA margin. I'm curious how you come up with the $4 million pre-money valuation.

In 2015, we'll do $4 to $5 million. So conservatively, the $4 million at 10 times is $400,000 in EBITDA. And we are already on track for Thank you for that. Go ahead, please.

Age before beauty.

So tell me about how you all are compensated. Is it time and materials?

Is it—

are you paid 50% up front, 50% at the end?

All of our projects are— not all of our projects, The majority of our projects are hard-coded. We do partner with some of our customers and do some time and material and development work, especially if there's a large portion of R&D involved. But typically we firm quote our projects and then we get progress payments. So there's typically a down payment and an engineering payment and different phases of the— some of our projects take a year to build.

But how does that—

lay out?

Are you getting 50% of your payments, you know, 30% of the way through the project, or is it a little bit more front-loaded on the payment side?

Every customer and industry is a little bit different. Automotive is a huge challenge to get progress payments early. Other industries, not as much. So we typically get somewhere between 20% and 50% down. 50% is unusual. 20% to 30% is more typical.

Do you have any ongoing revenue streams, any service or maintenance?

Those are all in our business plan, absolutely. I mean, some of the strategic additions, acquisitions, and/or bolt-on businesses will add some of those things. We do not currently have that. That's one of our goals here for next year, is to get some more recurring revenue opportunities.

Do you have any proprietary technology that you're—

We have a lot of proprietary.

Is it patented?

It's in the process of starting to be patented. In fact, one of our strategic partners and recent investors is actually patent attorney.

Great, thank you.

And the investment that has come on so far, is that a participating preferred security or is that common equity? Equity or how is that structured?

Right now it's convertible debt.

Okay.

What's an average project size for a customer, if there is one, or a range?

It's a difficult question. Typically, over the past couple of years, an average project would be $200,000 to $700,000. More recently, that's actually growing more into the $750,000 to $1 million. To win $3 million.

So how many projects will you do in a year, and how much capacity do you have in terms of numbers of projects?

Okay, so number of projects is very hard to answer because they could be, you know, 1 or 2 very large ones or a dozen smaller ones. Typically, I would say 6 to 8 projects. Another part of your question? I'm sorry.

What's the capacity? How many different projects can you do at any one time?

It's the same kind of a question. So we could build a machine as big as this podium for $750,000 or something as big as this room for the same price. It just depends on the technology that's actually incorporated in that piece of equipment. So capacity-wise, space, that's one of our constraints. We'll be looking to add some space in the coming years. The other capacity, of course, is engineering capability. Manufacturing capability is almost not a constraint. We do everything in-house, and we have many, many suppliers on the outside that we can farm stuff out to. The expertise and the engineering is one of those restraints. And what we're doing strategically is creating— in fact, this last year we spent a lot of money doing R&D in order to develop these building block modules, both mechanical and electrical and software, so that we can reduce the engineering cycle and the risk and the cost, and also increase our capacity significantly.

Thank you.

Anything else from the piranhas, or any questions from the audience? Looks like there's one, two.

How many competitors do you have? Like, how many people are doing something similar?

How many? That's a tough question because they're all over the world. Locally, the majority of our customers are competitors that have actually been consolidated. So Exmation was one of them. They basically got, you know, bought out, and we're actually taking on all of their engineers now. So it's It's hard to say how many competitors. As we grow from the smaller projects of a couple hundred thousand dollars up into the larger projects, our metrics of our competitors are changing regularly.

And then you mentioned the talent shortage, which has been talked about a lot. I just wonder if you have a plan for, as you expand, for attracting more engineers.

Excellent question. So if anybody was here earlier talking or listening to Mayor Rahm Emanuel, he was talking about all the people that are out there, the young folks that are out there coming through the education system. We have seasoned all of our management team, all of our engineering teams, 30-plus years experience, and each of them is mentoring a younger person in order to bring them up into the industry. And that's part of our, our desire design-build teams as our strategy for scaling. So we can take these teams and turn it into these teams, and eventually we're going to take the whole team and scale it regionally into other areas. We're almost all in the Midwest right now, and we can't keep up. We absolutely can't keep up with the demand.

It's like one more question from Sid in the front.

Yeah, just real quickly, is there any part of the product line that could be standardized? It could be an ongoing revenue stream as a standalone versus each one of them being an individualized project?

Sure. Every project— that's a great question. It speaks to the heart of who we are and what diversifies us. Every project that comes in the door, the first thing we ask is what have we done before that we can leverage? The next thing we ask is what can we create on this project that we can leverage in the future? So we have many, many standard modules and products growing regularly. In fact, that's the heart of our investment this last year is all in that R&D. So we have a whole assortment of products that we can market individually. The one project that I described that replaced the two articulated robots and got them from 24 seconds down to 3 seconds, that's a standard module that could be used in the— it's called the insert molding industry. If anybody is familiar with that. Every insert molder needs one, that type of a thing.

Well, I appreciate everybody sticking around. We obviously ran a little bit long. We thank Automated Manufacturing Solutions as well as our other presenters today, and of course our Piranhas. Thanks very much.