BioHarvest Sciences Inc.

Greetings and welcome to the BioHarvest Sciences third quarter 2025 corporate update conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I'd like to remind everyone that statements made on today's call and webcast, including those regarding future financial results, and industry prospects are forward looking and may be subject to a number of risks and uncertainties that could cause actual results to differ materially from those described on the call. Please refer to the company's regulatory filings for a list of associated risks, and we would also refer you to the company's website for more supporting industry information. In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-IFRS financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis. A reconciliation of adjusted EBITDA to its most directly comparable IFRS financial measure is included in today's earnings release, which is available on the BioHarvest website under the Investors tab. On our call today is Chief Executive Officer Elon Sobel. and Chief Financial Officer, Barr Dichter. I would now like to hand the call over to CEO, Ilan Sobel. Ilan, the floor is yours.

Thank you, operator, and good morning, everyone. I'm pleased to welcome you to today's third quarter 2025 corporate update conference call. Q3 2025 was underscored by continued robust operational performance. We delivered revenue growth in line with our targets and moved closer to our near-term goal of achieving adjusted EBITDA break-even. Total revenues increased 39% year-over-year to $9.1 million in the quarter, in line with our guidance, with our total U.S. VINIA active user base now exceeding 75,000 customers. This growth was fueled by sustained momentum in our core vineyard capsules, the expanding success of our vineyard-inspired product portfolio, and an increasingly significant contribution from our CDMO customer base. For those less familiar with our company, BioHarvest is the inventor of botanical synthesis, a patented non-GMO platform that produces highly potent plant-derived compounds without needing to grow the whole plant. This technology enables us to create consistent, bioavailable products at industrial scale, serving high-value markets across pharmaceuticals, nutraceuticals, cosmetics, and nutrition. We operate two synergistic business verticals. First, our direct-to-consumer products division, which includes our flagship vineyard nutraceuticals, and second, our services division as a CDMO, where we partner with other companies to develop novel plant-based compounds. This dual model positions us to drive revenue both from our own branded products and from B2B partnerships leveraging our unique technologies. Now, turning back to the third quarter, let me share with you some key facts which help explain the quality of our growth in the products business, which increased overall by 30% versus previous year. The core cash flows business accounted for 88% of product revenues, with new products representing the remaining 12%. Core Capsule's growth represented approximately 70% of total product revenue growth, with new products contributing a significant healthy approximately 30% of growth, fueled by strong double-teasage growth in tea and coffee businesses and the successful launch of our Vignette 2X 4-Minute Shoes, which today has a record review rating of 4.8 out of 5 on Amazon. I'd like to now take a moment to highlight three key growth drivers that defined our Q3 performance. Our CDMO business is playing an increasingly important role in our growth. With milestone-based project revenues compounding this quarter and together with new deals represented nearly 25% of the company's revenue growth for the quarter. Notably, we secured an exciting new CDMO partnership to develop saffron-derived compounds with Saffrontech. in which BioHarvest will retain a 25% ownership of the resulting saffron compound. This collaboration is running stage one and stage two of our process in parallel to accelerate time to market. For context, saffron is known as the world's most expensive spice, often retailing for over $10,000 per kilogram due to labor-intensive cultivation and limited supply. Our botanical synthesis technology has the opportunity to overcome these supply constraints, providing a unique high-value opportunity in this market. Beyond saffron, we continue to advance a robust CDMO prospective customer pipeline with several other target compounds, and we expect additional partners could onboard in the coming quarter. Now, turning to the product side of our business. To further drive Vinya's growth, in Q3, we launched phase one of our Vinya Health Pros professional affiliate program, creating a new network of health practitioners, athletes, coaches, and wellness influencers who are passionate about Vinya. The early response has been very encouraging. We have already onboarded 75 health pros to date, and we're targeting approximately 300 by year end as we launch phase two of our onboarding process. These professionals effectively become a vineyard professional sales force, introducing our vineyard products to their clients and followers in return for earning a high team commission on all sales, costing us significantly less in marketing spend. We believe this professional affiliate program will amplify our reach and credibility in the health and wellness community. and we are preparing to enter a more aggressive Phase 2 of this program following the success of our initial Phase 1 onboarding. This week, we continue to advance our Vineyard Inside strategy by providing our customers with exclusive early access to our Vineyard Blood Flow Hydration Solution, which we believe has the potential to be a major category disruptor and driver of significant incremental revenue for the companies. We began a VIP early adopter rollout on November 10 ahead of a broader market-wide public launch on December 3rd. This product extends the Vinia brand into the $17 billion U.S. electrolyte hydration market. The line features six great tasting flavors and leverages Vinia's core competence of driving better blood flow which is so critical in delivering hydration benefits by ensuring the effective transportation of fluids and electrolytes to the body's organs, tissues, and cells. We are configuring our marketing stack and e-commerce platform to support an aggressive rollout of this exciting new product as we work to uniquely differentiate our blood cell hydration solution versus competition anchored in our delivery of unique benefits such as increasing dilation of arteries and improving blood flow, improving physical energy and mental alertness, regulating body temperature under heat and stress. This product is back with a 90-day money-back guarantee if consumers do not love the taste or feel the veneer difference. Early feedback from our VIP users has been very encouraging and we're confident that vineyard blood flow hydration will open a significant new revenue stream for BioHarvest. In addition to these growth initiatives, gross profit margins continue to benefit from scale increasing to 61%. We remain disciplined and focused on taking every possible action to drive costs out of the manufacturing and distribution side of the business as well as controlling OPEX and GNA. On the capital markets front, over the last two months, we executed a series of strategic transactions to fortify our balance sheet. In September, we completed a $14.7 million strengthening of our balance sheet with an injection of U.S. $10.9 million of gross proceeds and an additional $3.8 million in debt reduction via accelerated warrant exercises and debt-to-equity conversions, which significantly reduced our debt and warrant overhang. Leveraging that momentum, earlier this week, we closed a successful $19.9 million institutional equity financing, marking our largest financing ever and the first to bring institutional investors into our shareholder register, bringing total growth proceeds from these combined efforts to roughly $30.8 million. This transaction fully funds the company for our next growth phase, giving us the strength and flexibility to accelerate our direct-to-consumer health and wellness business, including the required funds to triple our manufacturing capacity and drive our growing CDMO services business. It also diversifies our shareholder base, enhances trading liquidity, and confirms that BioHarvest now firmly belongs on the big stage of NASDAQ. Looking ahead, we remain laser focused on closing out 2025 on a high note. We currently expect to deliver in fourth quarter revenue in the range of $9 to $9.5 million and adjusted EBITDA between negative $0.6 million and zero, essentially break even. If not in Q4, this milestone is extremely close and will be delivered in early 2026. Achieving positive adjusted EBITDA has been a key near-term objective for us, and we are consistently pushing forward on this important financial outcome every day. With that, I'll now turn it over to Bar to walk through the financials. Bar, over to you.

Thank you, Ilan. Good morning, everyone. I will provide you with a succinct review of our financial results. A full breakdown is available in our SEC filings and in the press release that crossed the wire before market opened today. Please note that all figures are in U.S. dollars unless stated otherwise. Revenue for the third quarter of 2025 increased 39% to $9.1 million in line with management revenue guidance as compared to $6.5 million in the third quarter of 2024. Per quarter, product revenue grew 30% to $8.4 million, while CDMO revenue grew 722% to $0.7 million. Gross profit increased 50% to $5.6 million, or 61% of total revenue in the third quarter of 2025, as compared to $3.7 million, or 57% of total revenue in the same year-ago quarter. The increase in gross margins was primarily due to the benefits of increased manufacturing scale and improved manufacturing yields. Total operating expenses for the third quarter totaled $6.5 million as compared to $5.8 million in the same year-ago quarter. The increase in operating expenses was primarily due to increased marketing spend and the development of the HealthPro affiliate program to support future revenue growth, and the higher expenses for the CDMO service division, which partially offset by lower general and administration expenses. Net losses for the third quarter of 2025 totaled $2.5 million, or $0.14 per basic and a of $2.7 million or $0.16 per basic and diluted share in the same year-ago quarter. Adjusted EBITDA loss, a non-IFRS measure, totaled $0.4 million in the third quarter of 2025 as compared to an adjusted EBITDA loss of $1.7 million in the same year-ago quarter. Cash and cash equivalents as of September 30, 2025, totaled $11 million as compared to $2.4 million as of December 31, 2024. Subsequent to the close of the first quarter, the company fortified its balance sheet with $19.9 million in gross proceeds from an institutional equity raise in November. Importantly, with current margin momentum and expense discipline, we continue to project that we will reach adjusted EBITDA break-even in the coming quarters. This inflection is a key financial milestone for validating the scalability of our business model. I would now like to pass the call back to Ilan to offer some closing remarks, after which we will begin our Q&A session.