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OKC Vendor Visit

Date: 5/4/23

Overview

OKC facility is about 5000 sq ft which is a smaller footprint than Tempus or Fidelitone. We estimate that currently we are about 10% of their total volume (this is based on inventory levels and on production capacity).

The overall team was very warm and welcoming - they were very open about the issues that the face and are genuine about fixing any issues coming in for the future.

Nevertheless, I think we should keep our strategy to move to bottles and switch away from OKC.

OKC Attendees

Jenn - Account Manager

Mark - New Head of Sales (6 days in when we met him)

Steve - COO

Noah - CTO, Co-founder

Meghan - Head of Operations (production and supply chain)

Mike - Head of QA

Processing Steps

Phase 1: Receiving

(1 person)

Delivery truck arrives at dock and is thoroughly checked for issues (e.g., water, cleanliness, holes in area)

Materials are also inspected and any issues flagged to the delivery driver

Materials are not left here overnight and is taken into quarantine

Phase 2: Quarantine & Inventory

(1 person )

Materials are set into quarantine (roped off area). Materials are checked for COA, FPS and count before released into general inventory

Note: The inventory area is only one of the two areas they have - the other 3PL holds their product. This facility is about 0.5 miles away.

Phase 3: Packaging

(1 person per machine)

Before entering the packaging area, employees are required to gown up, booties, hairnet, and wash their hands. Any loose jewelry is removed.

Parata ATP2 Machine

This is the core work horse machine that creates the sachets

At first orange cartridges are filled (which supports about 150 #00 capsules each) are stagged for the ATP. They are dispensed from seemingly food cannisters which are labeled by Lot, color etc.

Cartridges are placed into the machine and the connection between the Salesforce (modded by OKC) and the machine talk. These connections are key to producing the customized sachets.

Sachets are then printed by the machine continuously from one consumer to the next until the spool (which sits outside the machine) is filled

Pill sachets are packaged in batches (E.g., Vitality only run, Combo only run)

Phase 4: Inspection

(2 people)

Orders are identified by the barcode on each of the sachets

Spools is then pulled over to the InspectionRX which has a large camera. This machine has three functions

Imaging - Takes 4 images of each sachet 2 from top and 2 from bottom

Quality Check - Images are then validated against the Parata ATP 2 output and verify against what should be in the machine.

Machine flags issues to an inspector who physically inspects orders that do not pass inspection. It flags it as green, yellow or red.

Any issues are then fixed at a station near by which includes using biotape to fix issues

These orders are put into a red bin

Separate - The Inspection RX separates each consumer from the spool (E.g., cuts Johns orders from Jane’s order)

These ordered are dropped into a yellow bin

QA needs to release the order before it is sent for packaging (all batches which includes count are released once ready) - this is done digitally

Once quality inspection is complete, it is then moved to a green bin which means it is ready for packaging

Phase 5: Shipping

(4 people)

A technician scans the QR code on the second sachet which pulls up the consumers specified pamphlet

This pamphlet is printed by an industrial printer

Orders have a final visual inspection and rolls are placed on top of the pamplets

The order is also then scanned for shipping label as well

shipping labels are put under the roll

Orders are packaged up with roll inside, pamplet on top, into the dispenser which is placed into the shipper

USPS picks up once a day

Estimated Capacity

Account Manager

They only have 1 account manager to work with all customers - which suggest they have a limited operation

Inventory Level

OKC has two locations for inventory. (1) their 3PL where they hold excess supply and retained samples (2) their staging location (about 600 sq ft) with 30 locations - of which we were in 2 areas. This suggests about 8-10% of their current inventory

Production Level

Their location has 3 Parata ATP machines and 1 inspection machine (defined as a Pod).

Currently have 1 pod, but can support up to 3 pods in their facility

Parata ATP does about 1 spool every 10 mins and each spool does 10 consumers each roll.

In an 8 hour shift, each Parata machine supports 480 consumers and with three machine they can do ~1500 consumers

Currently run 1 shift, but can open to 3 shifts (or more) and looks to expand into weekends once demand hits. This means that they can triple their capacity with only 1 location

In April, sent about 150 Vitality orders per business day to OK Capsule

Therefore, we are about 10% of their current production capacity. Assuming we grow at our current rate, we will hit 30% of their capacity by EOY.

Future Vision

Tally Vision

We discussed that we are considering changing the design of our capsules by putting them into colored capsules with the supplement name on it

Discussed how we focus most of business on the test and supplements are a retention mechanism for consumers

Talk about potential product avenues (did not talk about names or specific ingredients) like cardio vascular, mental, sleep

OKC Vision

Talked about their new software system

Better reporting and data

Ability to self-service

Anticipated launch in the next few months

Enables to have more design capabilities for our product

Hired a new customer service rep dedicated to evaluating slack messages

Talked about new packaging design (box + cartridge model)

New box design that would be a standing station made of aluminum or cardboard

Cartridges are made of compostable food box material which holds the spool of supplements and makes it much easier to pull out

In discussion of buying NR to include in their formulary (price they are getting is $1200 per kg. Talked about that we can buy NR via them.

Did NOT discuss pricing and our contract

Others Customers Served

Elo

JumpStart MD

Vitality RX