BHST

Image source: The Motley Fool. Tuesday, Aug. 11, 2026 at 8:00 a.m. ET Chairman and Chief Executive Officer - Zaki Rakib Chief Financial Officer - Bar Dichter Controller - Roi Atsaraf Operator: Good morning and welcome to the BioHarvest Sciences Second Quarter 2026 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I will now hand the call over to Dory Kurowski of LifeSci Advisors. Please go ahead. Dory Kurowski: Greetings, and welcome to the BioHarvest Sciences Second Quarter 2026 Financial Results Conference Call. With us on the call this morning is Dr. Zaki Rakib, Chairman and Chief Executive Officer. Before we begin, I'd like to remind you that management will be making projections and forward-looking statements on the call today regarding future events. Any statements that are not historical facts are forward-looking statements. These statements are made pursuant to and within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. We encourage you to review BioHarvest Sciences' SEC filings, including the company's most recent Form 6-K, which identify risks and uncertainties that may cause future actual results or events to differ materially. These filings can be found on the company website as well as the SEC's website at www.sec.gov. Please note that the forward-looking statements made during today's call speak only to the date they are made, and BioHarvest Sciences undertakes no obligation to update them. And with that, I would like to turn the call over to Dr. Zaki Rakib, Chief Executive Officer of BioHarvest. Please go ahead. Operator: Hello, Dr. Zaki. Just a reminder to unmute, please. Zaki Rakib: Yes, you can hear me? Should I start from the beginning? Did you hear everything? Operator: Yes, please. Thank you. Zaki Rakib: Okay. Sorry, my apologies. Thank you, Dory, and thank you all for joining us this morning. This morning, we proudly announced our first-ever CDMO manufacturing and supply agreement, another validating deal that shows the value of our programmable plant cell biology, which yields highly consistent, bioavailable and patent protected precision botanics. These are non-GMO compounds possessing enhanced potency and purity compared to the original plant. Our AI-driven development and industrial scale bioreactors are a revolution in plant cell culture production at mass scale. This morning's announcement relates to our program that we have with a UAE-based customer for a global luxury rare fragrance. I'll talk more about this exciting announcement and what it means to BioHarvest after you hear the prerecorded review of the financials that includes a more detailed summary of our numbers for this quarter. Please note that our CFO, Bar Dichter, has prerecorded the financial summary, but for happy family-related circumstances will not be joining the call today. Our company's Controller, Roi Atsaraf, will be on the call, and if necessary, he will follow up with any unaddressed financial questions on the call. Operator? Bar Dichter: Thank you, Zaki. Good morning, everyone. I will provide you with a summary 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. Revenues for the second quarter of 2026 were $8.8 million, an increase of 3.8% year-over-year from $8.5 million for the same period last year. Cost of revenue was $3.7 million compared to $3.4 million for the same period last year. Gross profit for the second quarter of 2026 was $5.1 million or 58% of total revenue compared to $5.1 million or 59% of total revenue for the same period last year. Sales and marketing expenses totaled $4.4 million for the second quarter of 2026 compared to $4 million for the same period last year. R&D expenses totaled $1.7 million for the second quarter of 2026 compared to $1.4 million for the same period last year. G&A expenses totaled $1.5 million for the second quarter of 2026 compared to $1.6 million for the same period last year or 17% of revenues as compared to 19% for the same period last year. Total operating expenses for the second quarter of 2026 were $7.6 million compared to $6.9 million for the same period last year. The increase is driven by technology development expenditures with CDMO services business unit as well as investing in new marketing strategy for the products business unit. Net losses for the second quarter of 2026 totaled $3.7 million or $0.17 per basic and diluted share as compared to a net loss of $4.1 million or $0.24 per basic and diluted share for the same period last year. Adjusted EBITDA loss, a non-IFRS measure for the second quarter of 2026 totaled $1.6 million compared to $1.2 million for the same period last year. Cash and cash equivalents, together with bank deposits as of June 30, 2026, totaled $16.2 million compared to $3.7 million as of June 30, 2025. I would now like to pass the call back to Zaki. Zaki Rakib: As mentioned at the start of this call, I'm extremely pleased to share that BioHarvest has secured our first supply and manufacturing contract with our fragrance customer for a rare premium scent that is widely regarded as one of the most valuable fragrance raw materials in the world. It is significantly ahead of the schedule we had previously outlined. This agreement reflects our partners' high prioritizations of this program as well as their awareness that BioHarvest has multiple competing development programs. The partner through the agreement expresses a desire to secure the earliest possible product availability for commercialization purposes. Today's announcement is an important strategic milestone in our quest to be the largest producers of cell culture-based rare fragrances. The 20-ton commitment with the delivery of the final product for our partner's specifications has the potential to translate to $20 million to $30 million in revenue for BioHarvest in the 2027, 2028 time frame. We will start limited production in the first half of 2027 in a dedicated section of our facility. Our Botanical Synthesis technology is a horizontal platform covering multiple industries, and it carries a very large opportunity for BioHarvest. The fragrance project and supply agreement we are discussing today is just one example of that vast potential. Let me now emphasize the key strategic goals of the company for the next 12 to 18 months. As demonstrated by today's announced manufacturing agreement, we will accelerate the monetization of molecules we have already developed or that are in advanced stages of development. We will shift our focus from proving the breadth of Botanical Synthesis application to selectively converting our highest value opportunities into recurring manufacturing revenue, royalties and sustainable profitability. At the same time, we will continue building our direct-to-consumer business for healthy, profitable growth. Taken together, these priorities support our growth plans and our path to EBITDA breakeven in 2027 on a consolidated basis. And throughout, we will manage our cash carefully with the intent to avoid raising equity-based funding. Now I will review details of our other CDMO programs that are making important progress. As reported last quarter, BioHarvest's CDMO division completed Stage 1 of its multistage saffron development agreement, successfully establishing a saffron cell bank for potential nutraceutical as well as culinary applications. Saffron is one of the most -- one of the world's most valuable and health-promoting botanicals. And this program, along with our fragrance program is highly valuable to us. Completion of Stage 1 for the saffron program triggered advancement to Stage 2, a development agreement valued at $1.125 million which will focus on scaling saffron biomass in bioreactors to support pre-commercial testing and formulation work. Under the terms of the agreement, BioHarvest retains a 25% ownership position in the saffron composition being developed in addition to future manufacturing royalties. In May, we also announced an update with our strategic partner, Tate & Lyle, which was an expansion of our original collaboration that broadened the scope of our joint sweetener development program. The expanded agreement broadens the scope of the partnership, moving from a single compound to development of several plant-based sweetener molecules. Based on our optimized strategy, we believe there is opportunity to secure additional selected contracts with strategic partners over the next year. We also expect additional development revenue from existing projects before the end of this year. In July, we announced that the Israel Innovation Authority approved a grant of approximately $1.4 million to BioHarvest. This non-dilutive funding will support the new research initiative integrating advanced data science, machine learning, computer vision and high-throughput digital sensing directly into BioHarvest's biological development workflows with the goal of accelerating its plant cell culture progress. The initiative aims to move plant cell culture from traditional empirical trial and error methods towards a data-driven optimization framework. This is the second IIA grant BioHarvest has received this year. The first supported scaling the company's manufacturing facility through industrial automation and machine learning. The grant takes the form of a zero-interest loan with repayment contingent on the company reaching predefined commercial milestones and is expected to come solely from future revenues generated by the funded project. This technology investment, among other goals, aims to enable BioHarvest to own the largest cell bank for valuable and endangered plant species in the world. The CDMO side of our business remains strong with high growth potential. Today, we announced that the CDMO business is tightening its expected revenue range from $4 million to $6 million to $4 million to $5 million and is anticipating a significant reduction in full year EBITDA loss from $4 million to $5 million to $1.5 million to $2.5 million. Now an update on our product division. We are revising full year guidance for the VINIA D2C business from $38 million to $42 million to $33 million to $35 million, reflecting a reallocation of spend towards its manufacturing capacity build-out and investments in the CDMO business. Accordingly, the direct-to-consumer business is now forecasting an expected EBITDA loss of $1.5 million to $2.5 million compared to previous guidance of a gain of $0.5 million to $2 million. This reflects a deliberate reallocation of spend, not a deterioration in the underlying business, which remains stable at approximately 95,000 active customers with growth of 2% versus the prior year and 2% versus Q1. Our decision reflects where we see the best return on every dollar of customer acquisition spend. The category has seen meaningful media inflation. Meta media costs increased double digits over the period with more advertiser dollars chasing the same audiences. Our view is that the right response is not to spend more into that environment, but to change what we put in front of the consumer. We have directed capital toward our manufacturing capacity build-out, building the channels we control directly and requirements of the growing CDMO business. We are pairing that discipline with three offensive moves entering the second half. First, in June, we implemented the first pricing change since May 2021, an increase of up to 20% for new subscription customers from their second order onward. Execution was clean, and we have so far not seen material impact. Second, we're executing a substantial shift in brand messaging that we believe will improve conversion rates and lower our cost of acquisition in the current environment. Third, in September, we will launch single-dose VINIA Daily Chews, a format we expect to drive further improved conversion rates amongst our younger audience as well as deepen consumption and retention across customers. Alongside these, our health professional affiliates channel continues to build momentum, and we have completed a comprehensive strategy to address gyms and running, hiking and swimming clubs, which we are putting into action. These are contributors to future growth at structurally lower acquisition costs. This is a deliberate sequencing decision, stronger offer, stronger creative and broader product range with our chosen market first with paid investments scaling behind us, positioning us to grow more efficiently and more profitably than spending into the current environment would have allowed. In summary, and as I have emphasized in today's call, we are optimizing our revenue targets to achieve our two critical goals: EBITDA breakeven on a consolidated basis in 2027 and preservation of cash. Accordingly, total revenue guidance for 2026 is $37 million to $40 million compared to previous guidance of $42 million to $48 million. Despite the revenue reduction and as a result of the strong momentum on the CDMO, the consolidated EBITDA losses are expected to be in the range of $3 million to $5 million as compared to the previous expected loss of $3 million to $4 million. In closing, I'm currently here in Boston at the Canaccord Growth Conference, which gives me a great opportunity to share today's news and BioHarvest's growth strategy directly with institutional investors. I'm looking forward to several engagements with conference attendees and with our BioHarvest investment community to update them on the exciting prospects of our business. With that, I'd like to open the floor to questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Matt Hewitt with Craig-Hallum. Matthew Hewitt: Congratulations on the CDMO contract. That is big news. On that topic, so you're still working on the Stage 2 of development that's supposed to take basically through the end of the year. Will you be able to start the actual production while that Stage 2 is in process? Or do you need to wait for that to complete first and then start the larger production program? And with that larger production program, are you able to generate revenues as that's ramping up? Or is it once the project is completed, which sounds like it will be later in '27? Zaki Rakib: Actually, let me explain. Thanks for the question. So as you know, once we have crossed Stage 1, which is considered the riskiest part of the project, we were able to understand and basically check the mark on the initial success of the project. Stage 2 is important, and we expect to complete it by the end of the year. What we would be doing is that instead of having Stage 3 in which we are actually increasing the size of the bioreactors, we will start manufacture with a smaller scale bioreactor that would provide a commercial availability for the customer to be able to bring to the market. And hence, we will be able to recognize revenue from product sales in the first half of 2027. We will not have to wait until the end of 2027 for that purpose. In fact, we expect to move into larger bioreactors throughout in the middle of the year. And then in 2028, because of the size of the contract, it's a 2027, 2028 contract for 20 tons. It will be now -- it will be then in 2028 part of the larger facility that we are currently building. Matthew Hewitt: Got it. That's super helpful. And then shifting gears to the VINIA opportunity. I know you're launching the Daily Chews here in September. But I think there's previously been talk about potentially getting into a retailer or more. I'm just curious how those discussions are going. Is that an opportunity still out there? Or with the kind of the refocus on the CDMO business, should we just kind of focus on that? Zaki Rakib: These are not competing priorities. The work led actually by Ilan on the retail side continues. We are continuing to seek those opportunities in the U.S. and outside of the U.S. as well for retail, focusing on products. For example, like the hydration would be one of the great opportunities on the retail side. We will continue to update you once we have such a retail arrangement, but they are not competing priorities. Operator: Your next question comes from the line of Sean McGowan with ROTH Capital Partners. Sean McGowan: Yes, following up on a couple of those questions. So in CDMO, why would the fact that you've got this contract result in a tightening of the revenue forecast? Is it a question of reallocating some resources? Or is something else going on? Zaki Rakib: It's more on what I said earlier in the call, which is instead of chasing a significant number of opportunities, which would have brought us to $6 million in terms of tightening $4 million to $5 million instead of $4 million to $6 million is actually focusing on the opportunities that will bring more value. So it's value more than number, which would allow me to focus my resources into the projects, including especially the fragrance project, which requires more focus to get it to manufacturing earlier in 2027. Sean McGowan: Okay. I get that. So it's a resource allocation issue. And then on -- similarly, in products, can you talk about what the status is of work that was being done on other plants, pomegranates, olives, other things that you guys have talked about in the past, given this kind of dial back on the marketing in VINIA and red grapes rather. Zaki Rakib: So that is -- there, there is indeed a change in strategy and any other products that we develop and part of the CDMO assets are the products that we have already developed, and these will be made available to customers of the CDMO. In fact, they will accelerate the process so that we don't have to wait. A customer -- if a customer is interested, let's say, in the olive product or the pomegranate product or the blueberry product or others that we have already as assets, it will be faster. So there's less time for development, and we can move much faster into the manufacturing and supply arrangements. We don't plan to bring into the market by ourselves any product besides VINIA this time. Sean McGowan: Okay. And can you -- if I can follow up on this contract. Can you give a little bit more detail on some of the parameters of the contract? Are there guarantees? What would be the timing of the revenue recognition? Are there upfront payments related to that, et cetera? Zaki Rakib: There are no upfront payments. We will deliver the products. There is a schedule of delivery in 2027 and 2028, obviously, more in 2028 than it is in 2027. First half is when we start delivering products, and we expect to generate revenue, and that's built into the strategy and the numbers that we are projecting internally for purpose of achieving our goal of being breakeven next year on a consolidated basis. So we're timing our delivery. We're focusing our resources with that purpose, and then we align them with the contract and the schedule for delivering products. From a customer perspective, the earlier, the better, the opportunity is vast, and it's a very disruptive supply of a very important ingredients in the fragrance industry. So it's not for the lack of demand. It's just that our ability to manufacture. I think the customer is very happy with the speed at which we were able to advance the project and is looking forward to start sampling and start getting products in the market. Operator: Your next question comes from the line of Sameer Joshi with H.C. Wainwright. Sameer Joshi: I would just like to understand a little bit more on the new contract announced. Is there a possibility of disclosing the name of the customer and what product -- exact product it is? And more importantly, once they start selling it, do you get sort of recognition like BioHarvest inside kind of ingredient disclosure that they might want to talk about? Zaki Rakib: So I'll start with the latter part of the question. We haven't really contemplated yet in that part. And remember, we do have 20% ownership in that in the profit that this business will be generating. So we are -- this agreement is part of this partnership that we have with that customer. At this time, we've agreed with the customer that we do not want to disclose the particular details on which product it is, and we can -- it's a significant fragrance raw material that covers a multibillion-dollars sector of the fragrance business and a growing one. I mean there are -- it's not hard for some people to dig deep and try to find out, but we're binded right now by nondisclosure arrangement, both for the name of the customer as well as the name of the product. But it's a multibillion-dollar industry, and this raw material is very important in several parts of the world, and it's growing also in the Western world and used by serious high-end fragrance manufacturers and brands. We -- as I said earlier, it's not for the lack of demand and -- but still we want to keep it in a stealth mode so that when it comes to the market, we're ready to penetrate the market faster and more efficiently. Sameer Joshi: Understood. And I suppose that because this is a big significant 20-ton contract over 2 years, it is likely that this can get renewed for several years following the 2027, 2028 time frame. Zaki Rakib: Could you repeat the question, Sameer? I missed one piece of it. Sameer Joshi: Sorry if I was muffled. Is there a possibility or is there a provision in the contract to extend it beyond the 2028 time frame? Zaki Rakib: It's -- we're the exclusive manufacturer. I mean I can't see anyone else being able to deliver such a product. So the exclusivity is currently for '27, '28. We -- it's the most likely scenario that we will be continuing to be the manufacturer beyond that time frame and for multiyears. We have actually signaled in the last few months to the market and to investors that we expected this fragrance to generate $180 million in revenue for BioHarvest for the first 5 years from beginning of manufacturing. And we stand by such projection, especially now after we have secured the first agreement. Sameer Joshi: Understood. And then just on CDMO, the guidance for revenue is only slightly tightened, but the losses are significantly less. Should we understand, as you mentioned, that you are focused on converting highest value prospects rather than just keeping on working on a broad range. So most of the savings are coming from your discontinuation of these other projects. Am I reading it right? Or are there other cost cuts? Zaki Rakib: No, we're not actually discontinuing Sameer, we're not discontinuing any project that is currently in place. It's just that we're not taking new projects that are not going to yield value and will require much more efforts in the beginning. So we are actually leveraging what we've already developed between the work we're doing with customers and molecules that we already have that are likely to be licensed in that time frame. So we're leveraging already a development that was done over the years and licensing those molecules to CDMO customers, generating faster revenue and accelerating the time to market, meaning the time to start manufacturing those molecules. Operator: Your next question comes from the line of Nicholas Sherwood with Maxim Group. Nicholas Sherwood: So when thinking about this fragrance contract, what specific types of payments should we be expecting in 2027 and the timing? Should we be expecting any royalty payments? Will it mainly just be offtake payments? And are there any sort of milestone payments that are going to be associated with the production in 2027? Zaki Rakib: The -- so we expect to start recording revenue in the first half of 2027. It will be modest because just in the early beginning of manufacturing with a relatively limited capacity within the confinement of the space that we currently have. So -- but as we grow the size of the bioreactors, we'll be able in the second half to record an even higher revenue to start with. But in terms of what the amount, I mean, the question was how is it modeled? And how could you look at it for 2027? Was that the question, if I -- if you may repeat it? Nicholas Sherwood: Yes. The question is around -- are we expecting royalty payments? Or is it mainly just going to be offtake and some... Zaki Rakib: Okay. I missed that part. Thanks for reminding. So we -- the model includes royalty, which are to be negotiated. That part has not been negotiated. But you have to remember that we also have 20% ownership. So the overall part, the overall amount of royalties that we will receive will be also connected to our ownership. That is in negotiations, that piece on the royalties will be negotiated. But there's enough margins one can count on. Even if without the royalties, there's enough margins to be made. The beauty of that business. And as part of the strategy picking those molecules with high margins, is that there's enough when you apply above our cost of manufacturing, even if you don't add any royalties, it's very healthy in terms of revenue and gross margins that we can record in 2027 and beyond. Nicholas Sherwood: Yes. And then kind of shifting to the Tate & Lyle expanding that agreement. What is the potential scope for expansion of the collaboration with Tate & Lyle, where now you're working on multiple plant-based molecules for sweeteners? Is there the potential because compared to fragrance, I would think that Tate & Lyle will want just the volume of production will be much higher in order to meet the needs of these sweeteners. Is there any potential for them to help fund the building out of your current facility or helping provide cash for building out a facility in the U.S. down the line? Like kind of how should we think about the scope of where this Tate & Lyle partnership can kind of grow over the next year or two? Zaki Rakib: This is an excellent question. In fact, we've initiated discussions with Tate & Lyle and soon to be part of the greater combination with Ingredion, which is quite exciting because it gives us access to a larger opportunity above and beyond the sweetener. So currently, the focus of Tate & Lyle, the two sweetener molecules, which are progressing nicely. We expect that this would translate into manufacturing agreement. I think the very early part of the manufacturing agreement may indeed occur in our facility in Israel. But the goal is to try to negotiate a deal with them in which they build their own facility, and we license them and we provide them with the technology transfer and we collect royalties. That is an integrated part of our model. So for large volume, especially for nutrition purpose, we prefer the model where the customer builds his own facility, and we just help him with the technology transfer required and of course, limited to production of only the molecules we are -- we have developed, but it's a healthier model and doesn't consume cash from our end and CapEx and whatnot. And that would certainly be a facility in the United States. So it is part of the strategy of the company to engage in those type of discussions with Tate & Lyle, Ingredion or other entities that would be looking for components or compositions with high volume as opposed to the fragrance business, which is slightly lower volume but much higher margins. Nicholas Sherwood: Yes, that definitely sounds like there's a lot of potential there. And then my last question is, can you kind of just give us any insight into any of the advances you've been able to make in your production or just building out your facility when it comes to things like robotics and machine learning and maybe any plans that you have through the end of this year or next year that are going to be able to bring your production into that next level? Zaki Rakib: So we are in the process of the completion of the detailed design, which will have embedded computer vision and robotics. So we expect in the beginning of 2028 when we start production in the new facility to take advantage of all the development that has taken place, part of which is financed or been helped by the grants that we've received. In 2027, the goal is to continue to support the demand using the current facility with an aim to improve our gross margin by reducing our cost of production because we would have a little more scale. We're going to be implementing a few improvements, more than one supplier for some of the key elements, overall, try to reduce modestly the cost of goods to achieve higher gross margin. But the big deal is the -- and the new facility is -- we expect to start seeing production in early 2028. We believe we have what it takes in 2027 with the existing facility and with the additional dedicated facility that we're creating for the fragrance is to combined, we have enough capacity to support the demand for VINIA, the fragrance, I'm talking 2027 as well as potentially one or two additional products that would be ready for limited manufacturing as part of the CDMO in 2027. Operator: [Operator Instructions] Your next question comes from the line of Sean McGowan with ROTH Capital Partners. Sean McGowan: You touched on this right at the end of your previous comment, but I just wanted to get a little update on the capacity expansion. You talked about the timing and strategy and everything behind that. But can you talk a little bit about capital requirements over the next 12 months on that? Zaki Rakib: So we -- as I said that throughout my call today, is we are designing our cash spending to correspond to the cash that we have and not needing to go and raise more capital on an equity basis. There may be opportunities, leveraging agreements to try to help with some of the financing. But the goal is to live with the cash we have, cover our operation as well as the building of the facility. We are going -- it's going to be staggered. We don't need to build on day one, 100-ton facility. And for 2028, we expect to be able to support the 30 to 40 tons, give or take, and then subsequently to build it up using cash that we generate from the business. So we feel comfortable with the goals of not requiring any more equity-based cash and basically achieving the EBITDA breakeven for 2027. Sean McGowan: Right, I was actually asking about capital expenditures. So is there any change from your previous expectations of what the capital expenditures would be in '27? Zaki Rakib: We have tightened it in that sense because of the strategy of not having to jump into a much, much higher capacity in 2028 and the ability to focus on projects that would yield the highest margins, the highest profits. Operator: There are no further questions at this time. I will now pass the call back to Dr. Zaki Rakib, Chief Executive Officer, for closing remarks. Zaki Rakib: Thanks, everyone, for attending this call. I mean, I don't know how else can I express my excitement. I'm elated with the contract we have. It's the culmination of years of unbelievable amount of work done by everyone in the company. I can't think of a better validation of our CDMO strategy and our technologies. This is the real first ever contract of this magnitude, $20 million to $30 million magnitude is just the beginning. It's just the tip of the iceberg of what Botanical Synthesis can do covering so many industries and bringing in some amazing results. And once again, thanks for your attendance, and I look forward to continue to update you. I'm sure that we will have news coming your way to further build your confidence in BioHarvest and its CDMO business and beyond that. Thanks, everyone. Operator? Operator: Thank you. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in BioHarvest Sciences, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BioHarvest Sciences wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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This article first appeared on GuruFocus. Release Date: August 11, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. BioHarvest Sciences Inc (NASDAQ:BHST) secured its first-ever CDMO manufacturing and supply agreement for a rare fragrance, with a 20-ton commitment potentially generating $20-30 million in revenue in 2027-2028. The company's CDMO division is making significant progress, including completing Stage 1 of a saffron development program and advancing to a $1.125 million Stage 2 agreement, with BioHarvest retaining a 25% ownership stake. BioHarvest Sciences Inc (NASDAQ:BHST) received a $1.4 million grant from the Israel Innovation Authority to integrate AI and machine learning into its plant cell culture workflows, supporting future growth without dilution. The company is strategically focusing on high-value CDMO opportunities, which is expected to significantly reduce the full-year EBITDA loss from $4-5 million to $1.5-2.5 million. BioHarvest Sciences Inc (NASDAQ:BHST) has a strong cash position of $16.2 million as of June 30, 2026, and aims to avoid equity-based funding, with a clear path to EBITDA breakeven in 2027. The company is implementing offensive moves in its D2C business, including a 20% price increase for new subscribers and the launch of Single Dose Vinya Daily Chews in September, which are expected to improve conversion rates and lower acquisition costs. BioHarvest Sciences Inc (NASDAQ:BHST) revised its full-year revenue guidance downward to $37-40 million from $42-48 million, reflecting a reallocation of spend and a more conservative outlook. The direct-to-consumer business is now expected to report an EBITDA loss of $1.5-2.5 million, a reversal from the previous guidance of a gain of $0.5-2 million. The company faces significant media inflation, with Meta media costs increasing double-digits, which has pressured customer acquisition costs and led to a strategic pullback in spending. The fragrance contract involves no upfront payments, and revenue recognition will be delayed until the first half of 2027, with modest initial production capacity. The company's net loss for Q2 2026 was $3.7 million, and adjusted EBITDA loss widened to $1.6 million from $1.2 million year-over-year, indicating ongoing operational challenges. BioHarvest Sciences Inc (NASDAQ:BHST) is keeping the fragrance customer and product details confidential, which may limit investor visibility and create uncertainty about the contract's full potential. Warning! GuruFocus has detected 4 Warning Signs with BHST. Is BHST fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more details on the parameters of the new CDMO fragrance contract, including revenue recognition timing, upfront payments, and the potential for renewal beyond 2027-2028?A: Dr. Zaki Rakib, CEO: There are no upfront payments; we will deliver products according to a schedule in 2027 and 2028, with more deliveries in 2028. We expect to start recording revenue in the first half of 2027 from limited production. The contract is for 20 tons, potentially translating to $20-30 million in revenue. We are the exclusive manufacturer for '27-'28, and it's highly likely we will continue as the manufacturer for multiple years beyond that, supporting our projection of $180 million in revenue over the first five years. Q: Why did the CDMO revenue forecast tighten from $4-6 million to $4-5 million, and what is driving the significant reduction in expected EBITDA loss?A: Dr. Zaki Rakib, CEO: The tightening reflects a strategic shift to focus on higher-value opportunities rather than chasing a larger number of projects. We are leveraging molecules we've already developed and licensing them to CDMO customers, which accelerates time to market and generates faster revenue. We are not discontinuing any existing projects; we are simply not taking on new ones that require excessive effort and yield lower value, allowing us to concentrate resources on the fragrance project and other high-margin opportunities. Q: Regarding the fragrance contract, should we expect royalty payments, milestone payments, or mainly offtake payments in 2027?A: Dr. Zaki Rakib, CEO: The model includes royalties, which are still to be negotiated. Additionally, we retain a 20% ownership position in the profit of this business. Even without royalties, the margins are very healthy due to our strategy of selecting high-margin molecules. Revenue will start modestly in the first half of 2027 and increase in the second half as we scale up bioreactor capacity. Q: Can you elaborate on the expansion of the Tate & Lyle partnership and the potential for them to help fund facility buildout?A: Dr. Zaki Rakib, CEO: The expanded agreement broadens the scope from a single compound to several plant-based sweetener molecules. We are in discussions with Tate & Lyle, which is soon to be part of a larger combination with Ingredion, providing access to a larger opportunity. For high-volume products like sweeteners, our preferred model is for the customer to build their own facility while we license the technology and collect royalties. This model avoids consuming our cash and CapEx, and such a facility would likely be in the United States. Q: What is the status of the Vinea retail expansion discussions, and how does it fit with the focus on the CDMO business?A: Dr. Zaki Rakib, CEO: These are not competing priorities. Work on the retail side continues, led by Ilan, and we are actively seeking opportunities in the US and internationally, particularly for products like the hydration line. We will update the market once we have concrete developments, but the retail initiative remains a key part of our growth strategy alongside the CDMO business. Q: Can you provide an update on the capital requirements and capital expenditures for the facility expansion over the next 12 months?A: Dr. Zaki Rakib, CEO: We are designing our cash spending to correspond with our existing cash reserves, with the goal of not needing to raise additional equity-based capital. The facility buildout will be staggered; we don't need to build a 100-ton facility immediately. We expect to support 30-40 tons initially and then scale up using cash generated from the business. We have tightened CapEx expectations by focusing on projects that yield the highest margins and profits, and we remain comfortable achieving EBITDA breakeven in 2027 without further equity funding. Q: What is the status of other plant-based products like pomegranate, olive, and blueberry, given the strategic shift?A: Dr. Zaki Rakib, CEO: There has been a change in strategy. Products we have already developed are now part of our CDMO assets and will be made available to CDMO customers. This accelerates the process since less development time is needed, allowing us to move faster into manufacturing and supply arrangements. We do not plan to bring any products to market ourselves besides Vinea at this time. Q: Can you share more details on the fragrance customer and the specific product, and will there be ingredient disclosure recognition?A: Dr. Zaki Rakib, CEO: We have agreed with the customer not to disclose the specific product or customer name due to a non-disclosure arrangement. It is a significant fragrance raw material covering a multi-billion dollar sector of the fragrance business. We retain a 20% ownership in the profit of this business. We are keeping it in stealth mode to penetrate the market more efficiently upon launch, and we haven't yet contemplated ingredient disclosure recognition. Q: What advances have been made in production technology, such as robotics and machine learning, and how will they impact the new facility?A: Dr. Zaki Rakib, CEO: We are completing the detailed design for the new facility, which will embed computer vision and robotics. We expect to start production in the new facility in early 2028, taking advantage of developments partly financed by grants from the Israel Innovation Authority. In 2027, we will focus on improving gross margins by reducing production costs through scale and supplier diversification. The existing facility, along with a dedicated section for the fragrance project, will have enough capacity to support Vinea, fragrance, and potentially one or two additional CDMO products in 2027. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Secured first ever CDMO Manufacturing Agreement supporting planned 20-ton commercial production program over two years for rare botanical fragrance, that BioHarvest expects to drive profitable growth trajectory for CDMO business Reports $8.8 million in Q2 revenue, up 3.8% from Q2 2025 Vancouver, British Columbia and Rehovot, Israel--(Newsfile Corp. - August 11, 2026) - BioHarvest Sciences Inc (NASDAQ: BHST) (FSE: 8MV0), a leader in Botanical Synthesis technology and sustainable plant-based molecule development, today announced results from the second quarter and six months of 2026. Dr. Zaki Rakib, Chief Executive Officer of BioHarvest, stated, "We are extremely pleased to have announced a manufacturing agreement this morning with our UAE-based fragrance customer that secures commitment to produce a fragrance ingredient that is widely regarded as one of the most valuable fragrance raw materials in the world. This is another milestone that validates the versatility and commercial potential of our Botanical Synthesis technology as a horizontal platform, broadly applicable to high-value, high-margin industries and serves as a model for attractive future economics for our business. With additional agreements like these, we are confident that we can expand our future royalty and manufacturing revenue opportunities through our CDMO model." Dr. Rakib continued, "BioHarvest is transitioning from proving the breadth of our Botanical Synthesis technology across multiple industries to selectively converting our highest-value opportunities into recurring manufacturing revenue, royalties and sustainable profitability. Today's 20-ton manufacturing agreement is exactly that conversion - a rare premium fragrance compound, produced at a scale nature cannot supply, under a recurring manufacturing model. On the consumer side, VINIA remains a stable, growing business, and we have made a deliberate choice this quarter to prioritize gross margin and cash discipline over top-line growth purchased at rising acquisition costs. That capital is being redirected into manufacturing capacity - the same capacity that underpins agreements like today's, and provides headroom for future scale of VINIA. Our growth will increasingly be driven by multiple high-value plant-based compounds alongside a consumer business we intend to grow profitably." Second Quarter and 2026 Financial Results Highlights All figures stated in this news release are in U.S. dollars unless stated otherwise. Total revenues for the three months ended June 30, 2026 were $8.8 million, an increase of 3.8% year-over-year, with three-month gross margins of 58% of revenue compared to 59% for the same period last year. Total Operating loss for the three months ended June 30, 2026 was $2.5 million compared to $1.8 million for the same period last year. Of this amount, operating loss for the CDMO services business for the three months ended June 30, 2026 was $1.5 million compared to $0.9 million for the same period last year, and operating loss for the D2C products business for the three months ended June 30, 2026 was $1 million compared to $0.9 million for the same period last year. Net loss for the three months ended June 30, 2026 was $3.7 million compared to $4.1 million for the same period last year. Adjusted EBITDA loss (a non-IFRS measure) totaled $1.6 million, compared to $1.2 million for the same period last year. The second quarter adjusted EBITDA losses of the CDMO Services and Products divisions are $0.9 million and $0.7 million respectively, as compared to $0.8 million and $0.4 million for the same period last year. Second Quarter and Recent Operational Highlights In August, BioHarvest secured the CDMO division's first manufacturing and supply agreement. This exclusive agreement secures the scaled production of a rare, high-value, plant-based fragrance ingredient as part of an extension of multi-stage development program with an existing UAE-based customer.The rare source plant is endangered due to overharvesting and habitat loss, and this particular scent is widely regarded as one of the most valuable fragrance raw materials in the world, with premium grades commanding prices exceeding tens of thousands of U.S. dollars per kilogram and demand growing across the Middle East, Asia, and Western luxury perfume markets.Following the successful completion of Stage 1 development in March 2026, Stage 2 was initiated in May, with an expected 6-9 months to completion. Today's announced manufacturing and supply agreement will secure CDMO support of an anticipated 20 tons of fragrance composition production. BioHarvest anticipates that limited production of this ingredient could begin as early as the first half of 2027. In July, BioHarvest was awarded a $1.4M Grant from the Israel Innovation Authority (IIA). This grant will focus on transforming the early-stage R&D pipeline through predictive AI and supports existing initiatives to scale the manufacturing facility by integrating industrial automation and machine learning on the factory floor. In May, BioHarvest advanced its saffron development program to Stage 2 with a contract valued at $1.125 million. In partnership with SaffronTech, this program targets a sustainable solution for the production of saffron, one of the world's most valuable and health-promoting botanicals which often commands prices ranging from approximately $3,000 to $10,000 per kilogram. In addition to future commercial manufacturing royalties, BioHarvest also holds a 25% ownership position in saffron composition. Also in May, Tate & Lyle PLC and BioHarvest announced an expansion on their joint sweetener development program to now include multiple plant-based sweetener molecules. The expanded collaboration builds on the initial agreement signed in late 2024 and reflects strong technical progress to date, as well as Tate & Lyle's ambition to equip food and beverage manufacturers with a flexible toolkit of sweetening solutions that can be tailored to different formulation needs. Conferences BioHarvest presented at the San Diego BIO International Conference June 22-25, 2026, joined by newly appointed VP Business Development Nedira Salzman-Frenkel. This quarter, BioHarvest is also presenting at two major upcoming investor conferences- Canaccord Growth Conference August 11-13, and the H.C. Wainwright 28th Annual Global Investment Conference September 14-16, 2026. VINIA-Branded Wellness Products The VINIA D2C business remained stable in the second quarter, with approximately 95,000 active customers at the end of July and revenue growth in Q2, 2026 of 2% year-over-year and 2% versus the first quarter of 2026. With health and wellness media costs on Meta increased by double-digit levels over the period, the Company chose to prioritize gross margin and cash discipline over top-line growth purchased at rising acquisition costs, directing capital instead toward the manufacturing capacity build-out that underpins today's agreement and provides headroom for VINIA as it scales. Three commercial levers are in play for the second half of this year. In June, the Company implemented its first pricing change since entering the U.S. in May 2021 - up to 20% for new subscription customers from their second order, with the introductory first-order offer maintained. No material impact on conversion or retention has been observed, and the change is expected to be accretive to gross profit, though revised guidance assumes a conservative new-customer ramp. The Company is also executing a substantial shift in brand messaging designed to improve conversion rates and achieve lower costs of acquisition, and launching VINIA Daily Chews, a format expected to further improve conversion rates amongst our younger audience as well as deepen consumption and retention across customers. Dr. Rakib added, "We are putting a stronger offer, stronger creative and a broader product range into market before we scale spend behind them - sequencing that costs us revenue this year and earns us margin next year. Every dollar not spent on rising media costs is funding manufacturing capacity and the momentum across our CDMO programs, which is why we are managing the balance sheet with the same discipline we apply to the P&L. With approximately 95,000 active customers and continued growth, we are making that trade from a position of strength rather than necessity." Second Quarter 2026 Financial Results Summary All figures stated in this news release are in U.S. dollars unless stated otherwise. Revenues for the three months ended June 30, 2026 were $8.8 million, an increase of 3.8% year-over-year, from $8.5 million. Cost of revenue was $3.7 million compared to $3.4 million for the same period last year. Gross profit for the three months ended June 30, 2026 was $5.1 million, or 58% of total revenue, compared to $5.1 million, or 59% of total revenue, for the same period last year. Sales and marketing expenses totaled $4.4 million for the three months ended June 30, 2026, compared to $4 million for the same period last year. Research and Development expenses totaled $1.7 million for the three month period ended June 30, 2026, compared to $1.4 million for the same period last year. General and administrative expenses totaled $1.5 million for the three months ended June 30, 2026, compared to $1.6 million for the same period last year, or 17% of revenues, as compared to 19% for the same period last year. Total operating expenses for the three months ended June 30, 2026 were $7.6 million, compared to $6.9 million for the same period last year. The increase is driven by technology development expenditures within the CDMO Services Business Unit, as well as investing in the new marketing strategy of the Products business unit. Net loss for the three months ended June 30, 2026 totaled $3.7 million, or $0.17 per basic and diluted share, as compared to a net loss of $4.1 million, or $0.24 per basic and diluted share, for the same period last year. Adjusted EBITDA loss (a non-IFRS measure) totaled $1.6 million, compared to $1.2 million for the same period last year. Under the two-lens approach, the second quarter adjusted EBITDA losses of the CDMO Services and Products divisions are $0.9 million and $0.7 million respectively, as compared to $0.8 million and $0.4 million for the same period last year. Cash and cash equivalents, together with bank deposits as of June 30, 2026, totaled $16.25 million, compared to $3.7 million as of June 30, 2025. Full-Year 2026 Guidance Revised BioHarvest stated that the CDMO business is tightening its expected revenue range from $4-$6 million to $4-$5 million, and is anticipating to significantly reduce full-year EBITDA loss from $4-$5 million to $1.5m - $2.5 million. Full-year guidance for the VINIA D2C business is revised from $38-$42 million to $33-$35 million, reflecting a reallocation of spend toward its manufacturing capacity build-out and investments in the CDMO business. Accordingly, the DTC business is now forecasting an expected EBITDA loss of $1.5m - 2.5 million compared to previous guidance of a gain of $.5m - $2 million. Collectively, consolidated EBITDA losses are expected to be in the range of $3m - $5 million, as compared to the previous expected loss of $3m - $4 million. Second Quarter 2026 Earnings Call Information Date: Tuesday, August 11, 2026 Time: 8:00 a.m. Eastern Time Webcast: https://events.q4inc.com/attendee/553034064 The Q2 2026 Financial Results conference call webcast will be broadcast live, and attendees are encouraged to register via the webcast link at least 10 minutes prior to the call to ensure participation. A recording of the webcast will be available for replay on the Company's website within the Investor Relations/Events & Presentations section. Use of Non-IFRS Financial Measures This press release includes the following non-IFRS measure - Adjusted EBITDA, which is not a measure of financial performance under IFRS and should not be considered as an alternative to net income as a measure of financial performance. Adjusted EBITDA represents operating profit (loss) before interest, taxes, depreciation and amortization adjusted for stock-based compensation and fair value adjustment of convertible loan and or warrants, issuance of warrants as well as exchange rate impacts. The company believes this non-IFRS measure, when considered together with the corresponding IFRS measures, provides useful information to investors and management regarding financial and business trends relating to the company's results of operations. However, this non-IFRS measure has significant limitations in that it does not reflect all the costs and other items associated with the operation of the company's business as determined in accordance with IFRS. In addition, the company's non-IFRS measures may be calculated differently and are therefore not comparable to similar measures by other companies. Therefore, investors should consider non-IFRS measures in addition to, and not as a substitute for, or superior to, measures of financial performance in accordance with IFRS. A reconciliation of Adjusted EBITDA to net income, its corresponding IFRS measure, is shown below. IFRS OPERATING LOSS TO ADJUSTED EBITDA RECONCILIATION (*) The Adjusted EBITDA figures for the three months ended June 30, 2025, as previously reported, included finance expenses of $31 thousands. These have been excluded from the restated comparative figures presented herein in order to align with the current period's methodology and to ensure comparability between periods. Management believes this presentation more accurately reflects the Company's underlying operational performance About BioHarvest BioHarvest (NASDAQ: BHST) (FSE: 8MV0) is a leader in Botanical Synthesis, leveraging its patented technology platform to grow plant-based compounds, without the need to grow the underlying plant. BioHarvest is leveraging its botanical synthesis technology to develop the next generation of science-based and clinically proven therapeutic solutions within two major business verticals; as a contract development and manufacturing organization (CDMO) on behalf of customers seeking novel plant-based compounds, and as a creator of proprietary nutraceutical health and wellness products based on its botanical synthesis technology. To learn more, please visit www.bioharvest.com. Forward-Looking Statements This news release contains forward-looking statements within the meaning of applicable securities laws. These statements are based on management's current expectations, beliefs, and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. For the CDMO Services Business Unit, there is no assurance of additional future contracts, and readers are cautioned that increased revenue is not necessarily an increase in net income or profitability as costs will likely increase as well. There is no assurance that signed research agreements will proceed past a contracted stage, or that a developed molecule or compound will be commercialized or will generate royalties to the Company. Commercial manufacturing and delivery of the fragrance compound is contingent on the composition under development meeting specific sensory parameters. There is no guarantee that the final product will be suitable for commercial purposes and that the Agreement will generate revenue. Successful commercialization of this fragrance compound, or of any compound developed will be subject to consumer preferences, advertising budgets and other factors affecting market acceptance of new products which are uncertain and cannot be assured.. Readers are cautioned not to place undue reliance on forward-looking statements. The Company does not undertake any obligation to update forward-looking statements except as required by applicable law. Additional information is contained in the Company's SEC filings, available at http://www.sec.gov. BioHarvest Company Contact: Dave Ryan, VP Investor Relations (604) 622-1186 [email protected] Investor Relations Contact: Chuck Padala, Managing Director LifeSci Advisors [email protected] BioHarvest Sciences Inc. and its subsidiariesUnaudited Interim Condensed Consolidated Statements of Financial PositionUSD dollars in thousands BioHarvest Sciences Inc. and its subsidiariesUnaudited Interim Condensed Consolidated Statements of Loss and Other Comprehensive LossUSD in thousands, except per share data BioHarvest Sciences Inc. and its subsidiariesUnaudited Interim Condensed Consolidated Statements of Changes in Shareholders' EquityUSD in thousands, except per share data BioHarvest Sciences Inc. and its subsidiariesUnaudited Interim Condensed Consolidated Statements of Cash FlowsUSD in thousands To view the source version of this press release, please visit https://www.newsfilecorp.com/release/309164

Interested in BioHarvest Sciences Inc.? Here are five stocks we like better. BioHarvest reported Q2 revenue of $8.8 million, up 3.8% year over year, while its net loss narrowed to $3.7 million. However, the company lowered 2026 revenue guidance to $37 million–$40 million and expects a consolidated EBITDA loss of $3 million–$5 million. The company signed its first CDMO manufacturing and supply agreement, involving a UAE customer and a premium fragrance ingredient. The 20-ton commitment could generate $20 million–$30 million in 2027–2028, with production expected to begin in the first half of 2027. BioHarvest reduced its VINIA revenue outlook to $33 million–$35 million as it shifts spending toward manufacturing and CDMO opportunities. Management is targeting consolidated EBITDA breakeven in 2027 while seeking to avoid equity financing. BioHarvest Sciences (NASDAQ:BHST) reported second-quarter 2026 revenue of $8.8 million, up 3.8% from $8.5 million a year earlier, while highlighting its first manufacturing and supply agreement within its contract development and manufacturing organization, or CDMO, business. Chairman and Chief Executive Officer Dr. Zaki Rakib said the agreement involves a UAE-based customer and a rare premium fragrance raw material. The customer and product were not disclosed under a nondisclosure arrangement. BioHarvest said the 20-ton commitment could generate $20 million to $30 million in revenue during 2027 and 2028. → SoundHound AI Sends a Loud Signal After Its Q2 Earnings Beat “Today’s announcement is an important strategic milestone in our quest to be the largest producer of cell-culture-based rare fragrances,” Rakib said. Rakib said BioHarvest expects to begin limited production of the fragrance ingredient during the first half of 2027 in a dedicated part of its existing facility. During the question-and-answer session, he said the company expects to recognize product-sales revenue in the first half of 2027 rather than waiting for larger-scale operations to begin later in the year. → 3 Dividend Champion Utilities for a Market That Can't Sit Still Production is expected to begin with smaller bioreactors, followed by expansion into larger bioreactors during 2027. BioHarvest expects the larger facility it is designing to begin production in early 2028. The fragrance agreement does not include upfront payments, Rakib said. Revenue is expected to be recognized as product is delivered under a schedule spanning 2027 and 2028, with a larger portion anticipated in 2028. Royalty terms have not yet been negotiated, though Rakib said BioHarvest also has a 20% ownership interest in the profit generated by the business associated with the customer partnership. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Rakib said the exclusivity arrangement currently covers 2027 and 2028 and that BioHarvest expects it will likely remain the manufacturer beyond that period. He reiterated the company’s prior projection that the fragrance opportunity could produce $180 million of revenue over the first five years from the start of manufacturing. Gross profit was unchanged year over year at $5.1 million, though gross margin declined to 58% from 59%. Cost of revenue rose to $3.7 million from $3.4 million. Sales and marketing expense increased to $4.4 million from $4.0 million. Research and development expense increased to $1.7 million from $1.4 million. General and administrative expense declined to $1.5 million from $1.6 million. Total operating expenses rose to $7.6 million from $6.9 million. Net loss narrowed to $3.7 million, or $0.17 per share, from $4.1 million, or $0.24 per share. Adjusted EBITDA loss was $1.6 million, compared with a $1.2 million loss a year earlier. Cash, cash equivalents and bank deposits totaled $16.2 million as of June 30, compared with $3.7 million a year earlier. Management revised its 2026 consolidated revenue guidance to $37 million to $40 million, from prior guidance of $42 million to $48 million. Consolidated EBITDA loss is now expected to be $3 million to $5 million, compared with the prior expected loss of $3 million to $4 million. Rakib said the company is pursuing consolidated EBITDA breakeven in 2027 and intends to manage cash with the aim of avoiding equity-based financing. BioHarvest said it is narrowing the focus of its CDMO business toward programs with higher value and a quicker path to manufacturing revenue. In the question-and-answer session, Rakib clarified that CDMO revenue guidance was tightened to a range of $4 million to $5 million from $4 million to $6 million, reflecting a decision to prioritize selected opportunities rather than pursue a broader number of potential projects. The company said it is not discontinuing existing projects. Rather, it is seeking to use molecules already developed—including olive, pomegranate and blueberry-related assets—to support prospective CDMO arrangements instead of independently bringing additional consumer products to market. Rakib said VINIA remains the only product BioHarvest plans to market directly at this time. BioHarvest also said it completed the first stage of a saffron development agreement, establishing a saffron cell bank. The milestone advanced the program to a second stage valued at $1.125 million, focused on scaling saffron biomass in bioreactors for pre-commercial testing and formulation work. BioHarvest retains a 25% ownership position in the saffron composition under development, in addition to potential future manufacturing royalties. The company’s collaboration with Tate & Lyle was expanded in May from one sweetener compound to several plant-based sweetener molecules. Rakib said BioHarvest is discussing a potential model under which a large-volume customer could build its own manufacturing facility, while BioHarvest would provide technology transfer and receive royalties. BioHarvest reduced its full-year VINIA direct-to-consumer revenue outlook to $33 million to $35 million from $38 million to $42 million. The company now expects the business to post an EBITDA loss of $1.5 million to $2.5 million, compared with previous guidance for EBITDA of $0.5 million to $2 million. Management attributed the change to reallocating spending toward manufacturing capacity, CDMO investments and channels it controls directly, rather than increasing customer-acquisition spending amid higher media costs. Rakib said VINIA had approximately 95,000 active customers, up 2% from both the prior year and the first quarter. The company implemented its first VINIA price increase since May 2021 in June, raising prices by as much as 20% for new subscription customers beginning with their second order. Rakib said the company had not seen a material impact from the change. BioHarvest also plans to introduce VINIA Daily Chews in September and said it continues to pursue retail opportunities in the U.S. and internationally. BioHarvest Sciences Inc is a biotechnology company that specializes in the development and commercialization of plant-based active ingredients through proprietary cell-culture technology. By growing undifferentiated plant cells in controlled bioreactor environments, the company aims to produce full-spectrum phytonutrients and botanical compounds that are difficult to obtain through traditional farming methods. This approach is designed to deliver consistent, high-purity extracts with reduced environmental impact and supply-chain variability. The company's product portfolio focuses on applications across the cosmeceutical, nutraceutical and health-and-wellness markets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "BioHarvest Sciences Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Secured the first-ever CDMO manufacturing and supply agreement for a rare premium fragrance, significantly ahead of the previously outlined schedule. Transitioning strategy from proving the breadth of Botanical Synthesis applications to selectively converting high-value opportunities into recurring manufacturing revenue and royalties. Reallocated capital and management focus from the direct-to-consumer (D2C) business toward manufacturing capacity build-out and the growing CDMO division. Attributed the D2C revenue guidance reduction to deliberate spending discipline in response to double-digit media inflation on platforms like Meta. Implemented a pricing increase of up to 20% for new subscription customers starting with their second order to improve unit economics without material impact on retention. Leveraging existing developed molecules (olive, pomegranate, blueberry) as CDMO assets to accelerate time-to-market for strategic partners. Utilizing non-dilutive funding from the Israel Innovation Authority to integrate AI and machine learning into biological development workflows. Targeting consolidated EBITDA breakeven in 2027 while managing cash to avoid future equity-based funding rounds. Projecting the new fragrance agreement to generate $20 million to $30 million in revenue during the 2027-2028 time frame, with limited production starting in H1 2027. Anticipating a significant reduction in full-year CDMO EBITDA loss to a range of $1.5 million to $2.5 million due to high-value project prioritization. Planning the launch of single-dose VINIA Daily Chews in September 2026 to drive conversion among younger audiences and deepen customer retention. Developing a long-term licensing model for high-volume products like sweeteners, where partners build their own facilities while BioHarvest collects royalties. Revised total 2026 revenue guidance downward to $37 million to $40 million from the previous $42 million to $48 million range. Acknowledged significant media inflation as a headwind for the D2C business, necessitating a shift in brand messaging and acquisition strategy. The fragrance contract includes a 20% ownership position in the business profit, though specific royalty percentages remain under negotiation. Capacity expansion for 2028 will be staggered and funded through generated cash rather than upfront heavy capital expenditure. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed they will bypass the traditional Stage 3 scale-up by starting commercial production in smaller bioreactors in H1 2027. Revenue from product sales will be recognized starting in the first half of 2027 rather than waiting for the completion of the larger facility in 2028. The tightening of the CDMO revenue range reflects a decision to focus on high-value projects like the fragrance program rather than chasing a high volume of smaller opportunities. This focus is intended to accelerate the path to manufacturing and sustainable profitability. BioHarvest is pursuing a model where large-volume partners like Tate & Lyle build their own facilities, with BioHarvest providing technology transfer in exchange for royalties. This strategy is designed to minimize BioHarvest's capital expenditure and cash consumption for high-volume nutritional products. BioHarvest is currently the exclusive manufacturer for this specific fragrance raw material and expects the relationship to continue multi-year. Management reiterated a projection of $180 million in revenue from this fragrance molecule over its first five years of manufacturing.

Phathom Pharmaceuticals, Inc. (PHAT) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of a loss of $0.06. This compares to a loss of $0.79 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +100.00%. A quarter ago, it was expected that this company would post a loss of $0.17 per share when it actually produced a loss of $0.18, delivering a surprise of -5.88%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Phathom Pharmaceuticals, which belongs to the Zacks Medical - Biomedical and Genetics industry, posted revenues of $74.27 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.71%. This compares to year-ago revenues of $39.5 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Phathom Pharmaceuticals shares have lost about 29.8% since the beginning of the year versus the S&P 500's gain of 6.9%. While Phathom Pharmaceuticals has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Phathom Pharmaceuticals was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.11 on $93.24 million in revenues for the coming quarter and $0.09 on $335.37 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Biomedical and Genetics is currently in the top 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, BioHarvest Sciences Inc. (BHST), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 11. This company is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents a year-over-year change of +13.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. BioHarvest Sciences Inc.'s revenues are expected to be $9.88 million, up 15.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Phathom Pharmaceuticals, Inc. (PHAT) : Free Stock Analysis Report BioHarvest Sciences Inc. (BHST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Vancouver, British Columbia and Rehovot, Israel--(Newsfile Corp. - July 28, 2026) - BioHarvest Sciences Inc. (NASDAQ: BHST) (FSE: 8MV0) ("BioHarvest" or the "Company"), a leader in Botanical Synthesis technology and sustainable plant-based molecule development, today announced that it will report its second quarter 2026 financial results before the market opening on Tuesday, August 11, 2026. The Company will host a conference call and webcast at 8:00 AM Eastern Time to discuss the results and provide an update on business operations. "As I approach my first 100 days as CEO, I look forward to presenting our second quarter results and providing additional insights into our 2026 strategy and growth plan," said Chief Executive Officer Zaki Rakib. "I invite our shareholders and members of the investment community to join us on August 11 as we discuss our progress, our strategic priorities, and the opportunities we see ahead." Second Quarter 2026 Earnings Call The earnings call webcast will be broadcast live, and attendees are encouraged to register via the webcast link at least 10 minutes prior to the call to ensure timely participation. The webcast recording will be available for replay on the Company's website within the Investor Relations/Events & Presentations section. About BioHarvestBioHarvest (NASDAQ: BHST) (FSE: 8MV0) is a leader in Botanical Synthesis, leveraging its patented technology platform to grow plant-based compounds, without the need to grow the underlying plant. BioHarvest is leveraging its botanical synthesis technology to develop the next generation of science-based and clinically proven therapeutic solutions within two major business verticals; as a contract development and manufacturing organization (CDMO) on behalf of customers seeking novel plant-based compounds, and as a creator of proprietary nutraceutical health and wellness products based on its botanical synthesis technology. To learn more, please visit www.bioharvest.com. Forward-Looking Statements Information set forth in this news release might include forward-looking statements that are based on management's current estimates, beliefs, intentions, and expectations, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements are inherently uncertain and actual results may be affected by a number of material factors beyond our control. Readers should not place undue reliance on forward-looking statements. BHST does not intend to update forward-looking statement disclosures other than through our regular management discussion and analysis disclosures. Forward-looking statements include those set forth in the Risk Factors section of the Company's Securities and Exchange Commission (SEC)'s filings which can be found within the Investor Relations section on the Company's website, or on the SEC's website at http://www.sec.gov. BioHarvest Corporate Contact:Dave Ryan, VP Investor Relations(604) [email protected] Investor Relations Contact:Chuck Padala, Managing DirectorLifeSci [email protected] To view the source version of this press release, please visit https://www.newsfilecorp.com/release/306896

Image source: The Motley Fool. Thursday, May 14, 2026 at 8 a.m. ET Chief Executive Officer — Zaki Rakib Chief Operating Officer — Bar Dichter Co-Founder, Board Director — Ilan Sobel Need a quote from a Motley Fool analyst? Email [email protected] Zaki Rakib: Thank you, Dory, and thank you all for joining us this morning. BioHarvest Sciences is an industrial plant cell culture biotech company and a leader in Botanical Synthesis, which is a patented non-GMO platform technology that industrializes what nature otherwise does slowly and produces high-value plant-derived compounds and botanical compositions without growing the plant itself. Using proprietary plant cell biology, elicitation technologies, AI-driven development and industrial scale bioreactors, BioHarvest creates highly consistent, bioavailable and patent-protected precision botanics or compounds possessing enhanced potency and purity compared to the original plant, along with the characteristics for commercial scalability. The platform has already demonstrated significant commercial validation through VINIA, BioHarvest's flagship Blood Flow health product, while also serving as the foundation of the company's rapidly expanding CDMO business across pharmaceutical, nutraceutical, nutrition, cosmetic and fragrance markets. With more than $100 million invested in its platform technology, 15 patents, multidisciplinary scientific capabilities as demonstrated in various clinical publications and proven industrial scale manufacturing, BioHarvest has 2 businesses representing its dual growth engines: The D2C business that has already generated cumulative VINIA-based sales of close to $100 million; and the CDMO business that is well positioned as a strategic partner for next-generation plant-based innovation across the nutraceutical, pharmaceutical, cosmeceutical and nutrition industries. These 2 businesses have different operating models that have compelled the operating changes we have recently communicated. The two-lens framework for managing the company is designed to optimize performance, capital allocation and growth execution. As such, and as announced last quarter, we will be reporting revenues and operations with this two-lens approach. With this, Bar will provide a more detailed summary of our numbers for this quarter. Bar? Bar Dichter: Thank you, Zaki, and good morning, everyone. I will provide you with a simple 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. Revenues for the first quarter of 2026 increased 8% year-over-year to $8.5 million from $7.9 million in the same year ago quarter. Cost of revenue was $3.5 million compared to $3.3 million for the same period last year. Gross profit in the first quarter of 2026 is $5 million or 59% of total revenue as compared to $4.6 million or 58% of total revenue in the same year ago quarter. Sales and marketing expenses totaled $4.1 million for the first quarter of 2026 compared to $3.7 million for the same period last year. General and administrative expenses totaled $1.4 million for the first quarter of 2026, in line with the same period last year, but reduced on a percentage of revenue basis to 16% as compared to 18% in the same year ago quarter. Total operating expenses for the first quarter were $6.9 million compared to $6.3 million for the same quarter last year. The increase in operating expenses was primarily due to increased marketing spend and higher expenses for the CDMO Services division. Net losses for the first quarter of 2026 totaled $2.6 million or $0.11 per basic and diluted share compared to a net loss of $2.3 million or $0.13 per basic and diluted share for the same period last year. Adjusted EBITDA loss, a non-IFRS measure, totaled $1.2 million, aligned with previous period last year. Under the two-lens approach, the adjusted EBITDA loss for the CDMO services division is $904,000 and $286,000 for the Products division for the first quarter of 2026 compared to $953,000 and $235,000 in the same year ago quarter, respectively. Cash and cash equivalents, together with bank deposits as of March 31, 2026, totaled $20.2 million compared to $3.4 million as of March 31, 2025. I would like now to pass the call back to Zaki. Zaki Rakib: Thank you, Bar. As we announced on April 29, in accordance with our new two-lens approach, a leadership transition was put in place to optimize the performance of the 2 businesses. This transition reflects BioHarvest's strategy of maximizing the value and efficiencies of its Botanical Synthesis platform. Prior to the transition, I was able to convert the R&D group from a one project at a time setup to a simultaneous multi-project development organization. The successes announced recently in all of our 4 projects that have been advancing in parallel are the fruits borne by this conversion. The consolidation of manufacturing, quality control, quality assurance and regulatory affairs under a unified leadership as part of this transition will allow for the future production of multiple compounds simultaneously in the new facility scheduled to operate in the second half of 2027. The need for that has become even clearer with the completion of Stage 1 and now with the Stage 2 contracts that we announced for both the fragrance and Saffron projects. In my new role as CEO, I plan to utilize my decades of executive leadership experience and proven track record of growth performance to enable high shareholder value creation. Ilan's focus as Co-Founder and a member of the company's Board of Directors is on growing the D2C business. With his decades of experience in the fast-moving consumer goods or FMCG sector, he will guide the implementation of high-yield marketing initiatives as well as entering the retail sphere for augmenting the online sales. Turning now to the CDMO business. This past quarter in March, we announced completion of what we believe to be the first ever successful stable cell culture development of a rare scent-producing plant used in the global fragrance industry as part of the multistage development program. This phase of the process is considered Stage 1, where a stable cell bank of a unique cell culture-based composition containing rare molecules was successfully produced. Notably, this particular scent is widely regarded as one of the most valuable fragrance raw materials in the world with premium grades commanding prices exceeding tens of thousands of dollars per kilogram and demand growing across the Middle East, Asia and luxury Western perfume markets. On Tuesday, we announced that our CDMO division signed a $1.2 million Stage 2 contract as part of this development program. Importantly, these milestones collectively bring BioHarvest closer to entering the growing premium fragrance segment estimated to represent a $23 billion market opportunity within the global $58.9 billion scents and fragrances industry. Stage 2 means that we have crossed the tallest technological hurdle of this development. It also means that we can be ready for production in the second half of 2027 in tandem with the manufacturing capacity increase due to the commissioning of the second factory. Importantly, under the terms of the Stage 2 agreement, BioHarvest retains 20% ownership of the compositions developed, creating a long-term royalty stream. The major principal of the partner firm, which is a prominent United Arab Emirates-based investment group, has said that they will be soon initiating a commercialization program to bring the product to market in the second half of 2027. We expect this contract to serve as a catalyst for engaging additional potential customers in other future fragrance programs using BioHarvest's Botanical Synthesis platform. We believe that the unique scalable capability of our technology significantly expands the addressable market opportunity for our CDMO division and further strengthens our long-term royalty-driven growth strategy. Like our fragrance program, our collaboration with Saffron Tech is a prime example of our Botanical Synthesis platform can redefine the economics and accessibility of high-value compounds we call precision Botanics, that I explained earlier. Saffron Tech is a company pioneering advanced cultivation methods for Saffron, one of the world's most valuable and health-promoting botanic. As you may know, it's among the most researched plants with multiple health attributes to its active components such as crocin, picrocrocin, safranal. We have partnered with them to develop and commercialize Saffron-derived botanical compounds using BioHarvest patented Botanical Synthesis platform. Yesterday, we announced the completion of Stage 1 of a multistage development program with Saffron Tech. As a result of the successful completion of Stage 1, BioHarvest has subsequently moved to Stage 2 under this development agreement to generate enough material expected to support future sustainable pre-commercial testing of saffron. The successful completion of Stage 1, the most crucial stage for advancing the program resulted, in the creation of a stable saffron cell bank using BioHarvest's proprietary Botanical Synthesis platform. This means that the cell cultures we developed demonstrated the molecular profile of the key active ingredients naturally found in saffron, that I just mentioned, including crocin, picrocrocin and safranal, compounds widely associated with saffron sensory characteristics as well as its scientifically researched health attributes. This is yet another important validation of the power and versatility of our Botanical Synthesis platform to create sustainable cell banks from scarce botanicals. There are multiple programs we're excited about as well as new prospects and additional advancement being made with other existing programs that we will be able to provide an update about in the coming months. The combination of existing projects and new ones expected to be added before the end of the year will generate a total revenue, as previously guided, between $4 million and $6 million. So despite quarterly fluctuations in CDMO revenue, total CDMO revenue is expected to remain as guided previously. Total CDMO 2026 revenue, including intercompany VINIA production is expected to be between $12 million and $14 million. Total adjusted EBITDA loss for the year, as previously guided, is expected to be between $4 million and $5 million. Now turning your attention to the D2C business. Today, we have more than 90,000 active users of the VINIA brand, supported by recognition from a myriad of medical experts on the importance of arterial health and blood flow. We believe that we have a best-in-class dilation and blood flow delivery nutraceutical, which has the capacity to positively impact the health and wellness of millions of consumers. As you know, we have recently made great strides with our VINIA Blood Flow Hydration product which has experienced rapid consumer adoption and high customer satisfaction ratings, which are the top in its category. To date, VINIA Blood Flow Hydration remains the #2 contributor to incremental new customer sales with 20% of new customer revenue year-to-date on vinia.com and Amazon, ahead of all categories except for capsules. With more than 100 consumer reviews on vinia.com and more than 60 reviews on Amazon for our key variety pack package, VINIA Blood Flow Hydration product has achieved an average rating of 4.7 out of 5, living up to its promise to consumers of delivering superior science, superior efficacy and superior taste. Importantly as well, VINIA Blood Flow Hydration is gaining positive traction in new key scaling channels with TikTok and our Health Pros channel. In Q1, we started implementing significant changes in our marketing and sales approach, aiming at improving the profitability of the D2C business. While it has created a onetime decline in revenue in Q1 2026 compared to Q4 2025, we expect for the remainder of the year a quarter-over-quarter revenue growth with improved metrics such as the ratio of the lifetime value of the consumer or LTV, over customer acquisition cost or CAC. Revenue guidance for 2026 for the D2C business remains ranging from $38 million to $42 million with adjusted EBITDA profit of $0.5 million to $2 million. I'd like now to turn the call over to Ilan to provide additional elaboration on Q1 outcomes related to our D2C business and the 2026 marketing programs that are influencing our outlook for healthy revenue growth in this division over the next few quarters. Ilan? Ilan Sobel: Thank you, Zaki. VINIA delivered modest year-over-year revenue growth in the first quarter. Whilst we are not satisfied with the level of growth delivered in the quarter, we believe that the quarter must be understood in the context of the deliberate steps we took to begin resetting and optimizing our direct-to-consumer growth engine. Q1 was a deliberate period in which we took important actions to better understand, refine and optimize our marketing engine for stronger and more efficient growth over the balance of the year. In January and February, we undertook a comprehensive review of our marketing mix with a clear objective: reduce customer acquisition cost; improve conversion; and better understand the true incremental contribution of our core acquisition channels, including TV, Meta and YouTube. To do this properly, we needed to test channel performance in a disciplined way, including reducing or pausing spend across specific channels during defined time period. As expected, this significantly reduced overall marketing investment in the first 2 months of the quarter, which directly impacted near-term revenue growth. In March, we began scaling investment again behind the revised marketing mix. This included a strategic reduction in our reliance on TV and a greater shift towards digital channels, which better align with where we are taking the VINIA portfolio, particularly with the launch and scaling of VINIA Blood Flow Hydration, our electrolyte product designed to reach a broader and younger consumer base. Q2 will be an important quarter of continued testing, learning and refinement as we continue to aggressively optimize every element of the marketing mix, including channel allocation, creative performance, funnel conversion, our offer structure, media efficiency and our customer retention strategy. Our focus is not simply to spend more, but to spend better as well as to build a more scalable, more diversified customer acquisition engine. As a result, we expect Q2 results to improve versus Q1. However, we believe the full impact of these actions, including the refined marketing mix, new product launches, channel expansion initiatives and positive impact of VINIA Blood Flow Hydration seasonality will be most meaningfully reflected in the second half of the year. On a personal level, as I move into my new role within the company, I remain fully focused on working closely with our highly talented marketing and sales team to deliver the guidance we have provided, while also architecting the next phase of the VINIA growth blueprint, one that we believe can accelerate the brand towards $100 million in annual revenue over the next 3 years. So in summary, Q1 was a reset quarter for VINIA. Q2 will be an important quarter of further testing and optimization, and we expect to see improved results versus Q1. However, we believe the full benefit of the actions we described will be felt in the second half of the year. We believe the actions we are taking are the right ones and that they position VINIA for stronger, more efficient and more diversified growth going forward, while forming the foundation for our ambition to build VINIA into a $100 million revenue brand over the next 3 years. Now I'll turn the call back over to Zaki. Zaki Rakib: Thank you, Ila. Before turning to Q&A, I just want to add how invigorated I am after returning from the Vitafoods Europe Conference in Barcelona. This conference brought together approximately 1,800 exhibitors spanning functional foods, nutraceuticals, ingredient suppliers, finished product companies and CDMOs. Our participation was strategically important since it provided direct access to many of the world's leading nutraceutical, functional ingredients and consumer health companies actively seeking next-generation innovation products. At the conference, we conducted approximately 30 highly meaningful meetings over 3 days with prospective partners and customers. The consistent message we heard and what was visibly evident across the exhibition floor was that much of the industry is currently offering highly similar products and formulations, resulting in an increasing urgency among companies to find genuine innovation and meaningful differentiation. In that context, BioHarvest's Proprietary Botanical Synthesis platform and CDMO business model were repeatedly viewed as a highly differentiated and compelling proposition capable of introducing entirely new plant-based compositions, improved efficacy profile, sustainability advantages and defensible innovation into the marketplace. Overall, the conference significantly reinforced our confidence in the growth potential and strategic positioning of BioHarvest' CDMO business. At Vitafoods, I had the pleasure of having with me our new Head of Business Development, Mrs. Nedira Salzman-Frenkel, who started with us in March. We're very excited to have her with us and want to stress that her appointment underscores our efforts to support BioHarvest as a true strategic partner in collaborative development versus simply a service provider. We plan to participate in similar subsequent events, like the upcoming Bio U.S. convention being held in San Diego in June. In summary, I'm excited about the growth opportunities that lie ahead with BioHarvest, striving for optimum execution in both businesses for the creation of significant shareholder value. With that, I'd like to open the floor to questions. Operator? Operator: [Operator Instructions] Your first question comes from the line of Sameer Joshi with H.C. Wainwright. Sameer Joshi: Zaki, congratulations on your new role, and I'm sure Ilan will be around. My first question is about the size of the market that the saffron opportunity affords you. It seems like it is a multibillion-dollar market. And I just wanted to see what kind of entry you are going to get? What is the actual addressable market that you can supply? Just metrics on the market would be good? Zaki Rakib: Thanks, Sameer -- Josh, actually, right? Maybe I'll take the opportunity to share something with everyone on the call, and I'll address your question directly. A couple of days ago, I had the opportunity to smell success and see success. I smelled the fragrance that we are developing and for which we've made the announcement. And I also saw the saffron with a beautiful color of that substance. And really, I was very encouraged. And I just want to talk about it today and then your question is really enabling me to discuss the saffron in particular because, like you said, it's a multibillion dollar market. The initial focus would be on the dietary supplement segment, basically addressing health-related indications from a nutraceutical perspective, which is, as you know, is a faster to market. The arrangement we have with Saffron Tech would allow for us to be actually becoming an integral part of bringing it to market. So in a way, we would have more control over the speed at which we bring it, or the regulatory approach to it as well as targeting which indication we should go after initially because one of the things about saffron, as you know, is really addresses a lot of areas, cognition, ADHD, PTSD, among other things. So what we're doing now is -- as we analyze the results, we're looking for the possibility of having multiple compositions, meaning -- because, as you know, there are -- and I mentioned that in my speech earlier about the 3 major ingredients. Interesting enough, the ratio between these ingredients may target -- depends on which ratio you could target one indication better than the other. So we're going to put everything into our AI models to try to come up with which combination we think fits better to which market. In terms of time to market and efforts, we expect to soon be done with the Stage 2 so that we can have enough samples, so we start doing some possible trials. My goal is to start manufacturing the product in the second half of next year in tandem with the factory that we're building, as you probably know. And as such, we think towards the end of next year, we should be starting marketing and selling the product as a dietary supplement, most likely to be in the form of a capsule. You may have heard Ilan and he may echo that as well that we're looking at possibly also the combination of saffron and VINIA because VINIA is kind of an adjuvant basically to every dietary supplement you can think of because of its ability to conduct better the substance into your bloodstream. So that's kind of the approach we have and the time frame that we have in mind. And I will probably need another quarter before I can tell you which indication we're likely to be focusing on. Sameer Joshi: No, this was helpful. And the saffron target is really a well-chosen target. Congrats on that. On the CDMO pipeline, so to speak, I know you gave outlook of around $12 million to $14 million, and there will be some of it, a meaningful portion from intercompany VINIA. The rest of that outlook, does it include 2 or 3 or 4 additional sort of relationships that you would be announcing between now and the end of the year? Zaki Rakib: The answer is yes. So I -- we on purpose segregate between the third-party, call it, or revenue, which is service for 2026, it's all service or development, right? And then the production, which is internally right now and hopefully, in 2027 we're going to produce not just Kenya, but other substances. So in 2026 we've guided for $4 million to $6 million, stemming from some of the projects as we advance them and then we can recognize more revenue related to the products that we have. And we -- you know that we're doing 4 molecules right now simultaneously and at least 3 to 4 additional projects, allow me to call them projects, and these will be across the next 3 quarters, including this quarter. And of course, we'll announce them as soon as we sign the appropriate agreement. But our pipeline now calls for a minimum of 3 to 4 new projects that will go in. Interesting enough, some of them might be from an existing substance. We -- part of the assets of the CDMO, and I think I probably need to do better work to clarify it, there are molecules that we are owned by the CDMO part of the business that are in a more advanced stage. So basically, more of a derisking. As you know, Stage 1 in our development with the Botanical Synthesis process is a stage with -- a little riskier. So by bringing to the market or bringing to the customer something that has already been derisked, we can command higher prices to start with. And of course, time to market would be shorter. I mean, hopefully, in 2028, I should be able to produce at least 4 different substances in our new factory. Sameer Joshi: Sounds really good. Thanks for that color, Zaki. Just one more question on D2C actually. So Ilan, maybe you can remind us what is in the pipeline of new product development? And should we expect anything over the next 12 to 18 months to hit the market? Ilan Sobel: Thank you, Sameer. When it comes to the D2C business and from a new product perspective, I first want to just talk about our VINIA Blood Flow Hydration product, which is still a new product. And we've seen really significant success. We're getting on to delivering $1 million in sales of the product since we launched the product in late November. And I think that's quite a significant achievement. We should get to that by the end of May. It's always good to have your first $1 million of a product, and that's pretty quick and the ramp-up is going really well. The consumer feedback is really overwhelming. The reviews are 4.7 out of 5 from now close to 160, 170 verified reviews. Feedback on a consumer level regarding the efficacy and regarding the taste is super strong. And we're very, very bullish about Blood Flow Hydration, and we continue to put more spend behind it and broadening the channels of distribution. We've opened up TikTok. Again, great feedback from TikTok, and we're ramping up quickly in TikTok. Our Amazon business is also ramping up. It's a significant -- we're talking multibillion-dollar category just on Amazon. Our rankings are improving day by day on Amazon. And what's amazing about this product which we don't have in the rest of our business is there's a seasonality curve. And as we're now moving into May, June, July, August, September, this is when it starts to obviously get extremely hot in the U.S., and we literally see significant benefits that we will be able to enjoy as we have the growth of the brand plus the seasonality impact which is going to significantly drive the second half of the year for us. So very, very encouraging on Blood Flow Hydration. And I think it's all anchored in the fact that we have the best nutrient delivery system as a result of our VINIA blood flow dilation and delivery system. And I say that very, very purposefully, we're now coining the -- literally the machine that VINIA puts inside your body, the VINIA blood flow dilation and delivery system, ultimately by dilating your arteries, more blood flow where in the case of our electrolyte product, we're delivering the electrolytes and fluids faster and deeper to all of your cells. And that's why we're getting the feedback from consumers to say, "Wow, efficacy, this is amazing." And obviously, we always are very focused on delivering superior taste, which is anchored in all the consumer research we do before bringing products to market. As we look at new products coming into the marketplace, we will, again, double down focus on Blood Flow Hydration. Secondly, we will be bringing an additional chew product to the marketplace. We have our 2X double chew in the market, targeting elite athletes, which is going very, very well. And now we're bringing a single chew into the marketplace. I'm sure you've seen the chew category is growing like -- is growing significantly as its fair share representation increases of the total supplements pie, and that we will bring into the marketplace in the third quarter. And as I said in the last earnings call, we are targeting a number of multibillion-dollar categories that we will leverage in our VINIA blood flow dilation and delivery system on to be able to really deliver superior efficacy and superior taste in these categories. I talked about some of those categories on the last earnings call. We're now doing a lot of product development. And towards the back end of the year or early next year, we will be bringing one of these breakthrough products to the marketplace. Sameer Joshi: Understood. Thanks for that color, Ilan. And as Zaki also highlighted, so the VINIA is a adjuvant and can be combined with even saffron when that product comes online. So looking forward to that. May I squeeze one more on the financials. I think you have hired a new business development person for CDMO. Should we expect the SG&A or marketing expenses to slightly increase as the next 3 quarters unfold? Zaki Rakib: The answer is no. No. That's been -- that's -- No, that's a very modest increase as a result of hiring. And in fact, I did have last year -- it's actually a replacement of someone that I had last year. So it's actually not even a new additional person in -- overall in the budget. No. And for purpose of what we're trying to do this year, there would be no increase in the marketing costs for the CDMO. Sameer Joshi: Congrats on all the progress. Operator: Your next question comes from the line of Nicholas Sherwood with Maxim Group. Nicholas Sherwood: Kind of looking at the CDMO business, how are you evaluating your pipeline of opportunities on do you want to add -- I know right now, it's like you have an agreement with a food ingredients company with Tate & Lyle, there's a pharmaceutical company, there's a saffron and then there's the fragrance company. Are you looking for -- trying to keep things broad and make sure that you're not putting everything into one basket, looking at these pipeline of opportunities, what -- how should we think about your thought process? Zaki Rakib: It's a great question, and thank you for asking because I mean one of the advantages of BioHarvest technology, fundamentally the Botanical Synthesis, it's agnostic to which industry really. We can serve pharma, nutraceutical, cosmeceutical, fragrances as well as nutrition. Each one has its own characteristics. So for example, nutrition would be the one with the largest volume, lower margins. We don't expect to be active too much in the nutrition space just because capacity constraints until the next factory coming to be commissioned. We are happy with what we do now with Tate & Lyle in terms of the molecule we're developing in terms of where it is right now in the development stage and when we can bring it to market and build volume. I'd say our sweetest spots are in the nutraceutical and the area of fragrances. Really the breakthrough in fragrance is going to create and increase the pipeline in that area. And those are interesting because on the nutraceutical, it's kind of mid-volume, really good margins and speed to market, meaning those are -- don't require long cycles of regulatory approvals to bring to market. So that shrinks. Once we are crossing Stage 2, trials can be conducted. So the cycle is shorter. And then the fragrances is even shorter from a regulatory and they bring in great margins. So we have -- those are the spots where I believe the pipeline is converging faster. And also we are a little more selective. We're trying to gravitate our attention to those 2 markets. And then on pharma, there is a lot of interest. We are trying to be very selective just because, again, where we are in terms of capacity and development as well as where we think the pharma opportunities in terms of manufacturing. We're not saying no to pharma, but we're a little bit more selective in timing of bringing them in. So what you will see more likely in the next few quarters would be more nutraceutical and call it, cosmetics in general. And then progress that we would be making in the area of nutrition would take a while. You'll be hearing more about it in the next couple of quarters. Nicholas Sherwood: Okay. And kind of a follow-up question on the cosmetics scent agreement. Do you think you'd be doing more of these through your current partner and then they would potentially be along with you selling the product on to whether it be in-house? Or do you think it will be -- you'll be kind of going directly to some of these larger brands that are creating, whether it be like a perfume or a scent [indiscernible], like how should we kind of think about...? Zaki Rakib: So the current fragrance that we're talking about has multiple applications. It's a very big market. I think we've sized it in one of those news releases in billions of dollars. Some of it is serving as an incense, and that's billions of dollars in that market as well as ingredients for the fragrance market. So it's really not just of what people buy in the store in terms of spray or perfume. So it's more than perfume. And so the partner that we have has an approach of more likely B2B and then to lined up companies that would be buying what we produce. And as you know, we're at 80-20, so 80% is owned by the partner, 20% is owned by BioHarvest, which would increase our stream of revenue. I believe that this fragrance can be -- can start getting into the market in the second half of next year. I don't think we're going to have a lot of capacity initially requirement to support that effort because -- in the sampling in the market, et cetera, but you'll see a mix of businesses that will be taking the raw material that we provide and then integrate it, either selling it directly for incense purpose or as an ingredient into the fragrance stream, like creating an oil out of the -- out of what we produce to serve the fragrance industry, top brands that are looking into this particular fragrance ingredient and they are, name it and they're all looking into that particular source. Unfortunately, we're not at liberty yet to disclose the name of that ingredient, but it's a well-sold ingredient, and it's part of the luxury fragrance and hitting the Western market recently with many designers, major designers basically adding it to the line of fragrance products. Nicholas Sherwood: Understood. And my last question is, I know that it was presented as a very long-term opportunity a couple of years out. But what sort of interest have you seen in the plant-based exosome extraction breakthrough that you announced last year? And just kind of give us as many details as you can on how that's developed? Zaki Rakib: Great question. It's actually not so much of long term. This is part of the CDMO assets. And so we have -- we are in the midst of testing now quantitatively the exosomes that we have. So we do produce exosome. Not only do we produce exosome, but we produce it at commercial quantities in our bioreactors. And now we're in the process of characterization of the content of those exosomes to decide which markets they best serve. Exosomes are not -- as we study better what they can do. And by the way, I mean, for plant-based exosomes, we need to call them something different. It's called extracellular vesicles. So those extracellular vesicles and the content that they will have may target even dietary supplements. So then we can decide from the case of VINIA, do we want to double down and have additional dietary supplements that are based on grade but with various ingredients. I think we did spoke about [indiscernible] as one of the ingredients that is very interesting and/or to go after the topical market with those exosomes, that exosome have the advantage of better penetration of the skin just because of their size that are 100 of the cell size. So we're weighing our opportunity based on the results. And hopefully, in next quarter, by this time that we do our earnings release, I'll be able to expand on the exosomes from a quantitative market. We're also looking at -- we're now already looking at the -- there is a downstream process. As you know, our exosomes are kind of a benefit. We're getting them as gravy out of the [ mica ], right? As we -- When we dry our material, we have a lot of [ mica ] left that normally we throw. Now we can use it further downstream. So for an industrial process, we need to do some additional downstream work that we're assessing now. But we certainly would be able to speak about it next quarter, more from a quantitative standpoint of what does it mean, what would a 1 milligram of that material contain in terms of [indiscernible] and then talk more about when can we bring this to market and then what would be the best vehicle to do that. Ilan Sobel: I would just add that it's a very important asset that the CDMO has because now when we engage with the customers in this area who are starting a project with us, they have ability to be able to develop a unique molecule at a cellular level. And with that, they also have the potential of developing one of these extracellular vesicles in addition. So it's like a one plus one, which makes our CDMO proposition to customers extremely compelling when you think about the initial Stage 1 costs and the ability to really drive significant value for our customers. Operator: Your next question comes from the line of Matt Hewitt with Craig-Hallum Capital Group. Matthew Hewitt: Thanks for the update. Regarding the Barcelona conference, it sounds like you had some really active dialogue. How quickly would it be before you start to see some contracts come out of that type of an event? I'm just trying to think -- obviously, you've got 3 to 4 more potential CDMO contracts before the end of the year. Is that Barcelona conference, does that create maybe a second tier for early next year? I'm just not sure how quickly those types of conversations turn into actual business? Zaki Rakib: Actually, in terms of -- so there are 2 elements to take into consideration here. My capacity of development, although I have increased it dramatically, but still not -- I can't run 20 projects, done 3 yet. But -- so I now have the ability to select which projects are better to bring in this quarter, next quarter and the one after, right? So if we look at 3 to 4, which I have in the pocket, let's say, for the remainder of the year, I may reorder them in a way where one of the 3 to 4 would be the one for Barcelona. Actually, I would be surprised that there is a faster conversion of the -- through the Barcelona meeting because just the urgency of people want to differentiate themselves. And I would say probably one of those Barcelona opportunities would be with one of the already pre-developed molecules that we have. As you know, we have a series of molecules that we've already had developed, and that would be a faster process, and that's why I can sign those deals a little faster because I have derisked especially the first stage, which is the cell bank. So I would say Barcelona contributes one out of the -- out of those 4 and the rest are part of the pipeline that exists. The others from Barcelona can be put in into the pipeline that can start creating more projects into 2027 and beyond. Matthew Hewitt: Got it. And then maybe a question regarding the new marketing strategy. Given that January, February, you're kind of making some of the -- tweaking some of the go-to-market strategy there, March, you kind of initiated the new strategy. What are some of the initial feedback or metrics that you were tracking in March? And how does that shape up for the rest of the year? Zaki Rakib: Yes, sure. Thanks, Matt. So when we look -- when we step back and we looked at what the mission was for the team, we were very, very focused on driving the metric of cost of acquisition as a ratio to lifetime value. This is really a critical metric that is so important in the business. If you look at the recent acquisition of Gruns by Unilever for $1.2 billion, happened in the last 4 weeks, you have a ratio of lifetime value to cost of acquisition of 3:1. This is like the sweet spot. And we're doing pretty good as it relates to this, but we've got a little bit to go to be able to get into the zone where we want to be best-in-class. And so the work that we're really trying to do now is all anchored in this mission of getting that ratio right and ultimately moving our business to a best-in-class business as a way to move from 90,000 customers to 0.5 million customers and from, let's say, $35 million of revenue with the ambition to get north of $100 million. But Matt, not to do it -- actually, 2 days ago, so today's Thursday, so Tuesday was our 5-year anniversary of entering into the U.S. business. And in the 5 years, we built a significant business under one, resveratrol polyphenol brand in the U.S. But we don't want to take -- for the next milestone, which is at $100 million, we don't want it to take another 5 years, no ways. And that's part of me stepping into this role to build the architecture and the blueprint to be able to go from $35 million to $100 million fast, really, really fast. So the -- that really is the kind of the ultimate key metric. In doing that, obviously, we're working on improving our cost of acquisition, which is based on a number of critical areas from really focusing on specific personas, which we believe are the hero personas that are most relevant to our brand. It's also -- we're working on improving our product messaging, which translates into better creative. You're going to see us coming out with a much stronger offer in the marketplace to improve conversion and then improving the critical flows of e-mail sign-ups, post-purchase flows and really optimizing our broader ability to retain customers. We have a very high retention levels, but we want to do better. And so we're unleashing now. We did some great test and learn in January, February. We saw encouraging results as we moved into March and April. And now we're getting ready for Phase 2, which will be implemented in the 1st of June, where there will be even more fundamental changes that we're making, not just in the marketing mix, but actually what hits the consumer, which I'm really excited about, and we believe will have significant impact on our overall conversion. Operator: Your next question comes from the line of Sean McGowan with ROTH Capital Partners. Sean McGowan: A couple of financial questions. Can you talk a little bit about the -- or remind us of the financial impact of the shift from Stage 1 to Stage 2 for not just saffron, but for any of those businesses? So what happened financially? Zaki Rakib: So Phase 1 normally is in the vicinity of contract size of $0.5 million. Entering Phase 2 is normally a contract between $1 million and $1.5 million depending on the molecule. And then there's another $1 million to $1.5 million in Stage 3. Overall, I mean we're doing our best to try to shrink development within 24 months from 0 to finalized Stage 3. When you finish Stage 3, you're basically ready to go into production. So that's how the way you should be looking at it. Stage 2, $1 million to $1.5 million, Stage 3, $1 million to $1.5 million. Sean McGowan: And what happens to expenses during that transition? Zaki Rakib: So when we -- completing Phase 2 mean I have biomass that not only validates the proposition, but enough to be able to let the customer do whatever trials, perception trials, clinical trials, whatever pre-commercial trials, that would be yet one more big step towards derisking the proposition. I mean normally Stage 1 is the riskiest -- we haven't seen anything in the past that shows that Stage 2 -- if you have Stage 1, if you cross Stage 1 that you're on, you can do Stage 2. But then you have the final -- end of Stage 2, you know what the final product is. You know exactly what the COA is going to be, what the cost structure is and you know the efficacy because you can start sampling, testing, et cetera. We're looking at the difference between having milligrams or grams and having a few kilograms at the end of Stage 2. And then really once the customer at Stage 2 and normally, people start having -- making their mind about the move from -- so for example, you see that between completion of Stage 1 and signing an agreement of Stage 2 sometimes it's a matter of a few weeks. I expect between Stage 2 and Stage 3 maybe a little longer, maybe 1 month or 2 or maybe even 3 months lag between the 2. What the good news is we're able -- before the end of the stage, we're able to provide some materials so people can start doing some tests and not necessarily waiting until the end because what we -- optimally is we want to make sure that people can move as fast as possible between one stage and another. Sean McGowan: And then shifting gears for a second. Can you give us an update on the status of the development of the new plant, both from an operational standpoint as well as a financial standpoint? Zaki Rakib: The new manufacturing facility you're talking about the -- Sean? Sean McGowan: Yes. Yes, yes. Zaki Rakib: So we are looking at starting to produce in the second half of next year, which means that I still will run in parallel the 2 facilities. Ultimately, the goal is down the road because the second -- the new facility is a more efficient facility. Hopefully, you're going to see that in terms of gross margin, et cetera. So sometime in 2028, we're looking at reducing capacity in the second -- in the first facility in favor of increasing capacity in the second facility. But we're starting to add capacity in the second half above what we have in the first one in the second half of next year. Sean McGowan: Okay. And in terms of cash flow and investment, I thought there'd be more investments reflected in the...? Zaki Rakib: We're looking at what we have in our coffers, and we believe we have sufficient funds. We're doing some prioritization and trying to live within what we currently have. So we're optimizing a few areas. And -- so that what we have can suffice to be -- to complete the first -- at least the first step required to start producing. Now we may want to do additional things down the road that may require more capital, and then we'll see where we are in terms of earnings that we produce and the speed at which we need more capacity. My feeling is that the CDMO may actually be the contributor to try to get additional capital towards the second half of next year because of the required -- the faster requirement for capacity. And that would -- to me, would be good news, and that would be something that we would be able to finance in different ways. But remember, CDMO manufacturing would be done under contracts. It's not a D2C situation, but it will be done under contract. Ilan, do you want to add? Ilan Sobel: Yes. Sean, I just wanted to add that the focus of the team now, and this is something that Zaki is spending a lot of time getting into, is we're now finalizing the detailed engineering design drawings. I mean you can imagine it's a very serious undertaking that we are working through here to build this facility. This is the next generation of our technology. We're looking to really bring in a lot of AI and new layers of technology. So the engineering work and the technical design -- detailed technical design work is paramount. We need to get it right. And that's why you're not seeing yet any of the long lead items from a CapEx perspective because we're now working through making some of those tough decisions as it relates to final technologies, final suppliers for specific technologies. There's a lot of testing that's going on across the world with different types of technology that we're looking at bringing into the facility from a harvesting perspective as well as drying, et cetera. But you should start to see that CapEx build in the second quarter and third quarter of this year. Sean McGowan: That's very helpful. And my final quick question maybe for Bar is when will the SEC filing hit? Because I don't see it yet in the SEC? Bar Dichter: It should be out very soon. Operator: There are no further questions at this time. I will now turn the call back to Dr. Zaki Rakib for closing remarks. Zaki Rakib: So I'm going to say what I said earlier in the call, I smell success. I saw success and I was able -- I hope I was able to speak about success. I'm really feeling strong confidence -- high confidence in the prospects of the business on both segments. The latest success in the CDMO have not only technological meanings, but financial meanings. Hopefully, we'll roll those soon with models that will be able to explain to you guys and to the market what they mean and when manufacturing starts kicking in, et cetera. So once again, I want to thank everyone here and looking forward for our next earnings in August, I guess. Bar Dichter: Yes, August. Zaki Rakib: Yes. Thanks, everyone. Enjoy the rest of the day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in BioHarvest Sciences, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BioHarvest Sciences wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. BioHarvest (BHST) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. The company transitioned to a 'two-lens' operating model to optimize capital allocation and execution across its distinct D2C and CDMO business units. Management converted the R&D organization from a sequential project setup to a simultaneous multi-project development engine, enabling four parallel programs. D2C revenue experienced a sequential decline in Q1 due to a deliberate pause in marketing spend to test channel efficiency and refine the customer acquisition mix. The CDMO division achieved critical technical validation by completing Stage 1 for both high-value fragrance and saffron programs, establishing stable cell banks. Consolidation of manufacturing and regulatory affairs under unified leadership is designed to support multi-compound production at the upcoming 2027 facility. Strategic participation in industry conferences like Vitafoods Europe confirmed high market demand for differentiated, sustainable plant-based innovation over generic formulations. Management maintains 2026 D2C revenue guidance of $38 million to $42 million, assuming improved marketing efficiency and seasonality benefits in the second half. The CDMO division expects to add 3 to 4 new projects by year-end, targeting a total 2026 revenue range of $12 million to $14 million including intercompany production. A new manufacturing facility is scheduled to begin operations in the second half of 2027, which will significantly expand capacity for multi-compound production. The company aims to scale the VINIA brand to $100 million in annual revenue over the next three years through channel expansion and new product formats like single chews. Guidance for 2026 adjusted EBITDA loss remains between $4 million and $5 million as the company balances growth investment with operational optimization. Signed a $1.2 million Stage 2 contract for the fragrance project, which includes a 20% royalty stream for BioHarvest on future commercialized compositions. The saffron program moved to Stage 2 to generate material for pre-commercial testing, targeting the multibillion-dollar dietary supplement and nutraceutical markets. Cash position increased significantly to $20.2 million as of March 31, 2026, compared to $3.4 million in the prior year, providing a runway for current strategic initiatives. Management flagged that while Stage 1 is the highest technological hurdle, future production remains dependent on the successful 2027 commissioning of the second factory. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Initial focus will be the dietary supplement segment for health indications like cognition, ADHD, and PTSD, which offers a faster path to market than pharma. Management expects to start manufacturing and selling saffron as a dietary supplement capsule by the second half of 2027. The company is exploring combining saffron with VINIA to leverage VINIA's ability to improve nutrient delivery into the bloodstream. The pipeline currently includes at least 3 to 4 additional projects expected to be signed across the next three quarters. Management is prioritizing 'sweet spot' markets like nutraceuticals and fragrances due to shorter regulatory cycles and higher margins compared to nutrition or pharma. The company is leveraging pre-developed molecules to command higher prices and shorten the time to market by bypassing the riskiest early development stages. The primary focus is improving the Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio toward a 3:1 best-in-class benchmark. A 'Phase 2' marketing implementation starting June 1st will introduce fundamental changes to consumer-facing offers and creative messaging to drive conversion. New product launches, including a single chew in Q3 and a 'breakthrough' product late this year, are intended to diversify the VINIA portfolio. BioHarvest is currently characterizing the content of its extracellular vesicles (exosomes) produced at commercial scale in bioreactors. Potential applications include topical cosmetics for better skin penetration and enhanced dietary supplements. Management views exosomes as a 'one plus one' value proposition for CDMO customers, allowing for unique molecule development alongside vesicle delivery systems.

This article first appeared on GuruFocus. Release Date: May 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. BioHarvest Sciences Inc (NASDAQ:BHST) reported an 8% year-over-year increase in revenues for Q1 2026, reaching $8.5 million. The company's gross profit margin improved slightly to 59% from 58% in the same quarter last year. BioHarvest's CDMO division signed a $1.2 million Stage 2 contract, marking progress in their fragrance development program. The Vinia Blood Flow Hydration product has achieved rapid consumer adoption, contributing significantly to new customer sales. BioHarvest's proprietary botanical synthesis platform is gaining recognition as a differentiated and compelling proposition in the market. Net losses for Q1 2026 increased to $2.6 million compared to $2.3 million in the same period last year. Total operating expenses rose to $6.9 million from $6.3 million, primarily due to increased marketing spend and higher expenses for the CDMO Services Division. The company experienced a one-time decline in revenue in Q1 2026 compared to Q4 2025 due to changes in marketing and sales approach. BioHarvest's D2C business reported modest year-over-year revenue growth, which was below expectations. The company anticipates a continued adjusted EBITDA loss for the year, expected to be between $4 million and $5 million. Warning! GuruFocus has detected 4 Warning Signs with BHST. Is BHST fairly valued? Test your thesis with our free DCF calculator. Q: What is the market opportunity for BioHarvest's saffron project, and how do you plan to enter this market? A: Dr. Zaki Raqib, CEO, explained that the saffron market is a multi-billion dollar opportunity, initially focusing on the dietary supplement segment for health-related indications. The partnership with SaffronTech allows BioHarvest to control the market entry speed and regulatory approach. They aim to start manufacturing in the second half of next year, with potential product launches by the end of next year, possibly in capsule form. The company is also exploring combining saffron with Vinia for enhanced efficacy. Q: Can you provide more details on the CDMO pipeline and expected revenue? A: Dr. Zaki Raqib stated that the CDMO division expects $12 million to $14 million in revenue for 2026, with contributions from both intercompany Vinia production and new projects. They plan to announce three to four additional projects this year, leveraging existing molecules and de-risked assets to expedite market entry and command higher prices. Q: What new products are in the pipeline for the D2C business, and what is the focus for the next 12 to 18 months? A: Ilan Sabel, Director of the Board and Co-Founder, highlighted the success of the Vinia Blood Flow Hydration product, which is expected to reach $1 million in sales soon. The company plans to focus on this product while introducing additional products targeting elite athletes and expanding into multi-billion-dollar categories using the Vinia blood flow dilation and delivery system. Q: How are you evaluating opportunities for the CDMO business, and what industries are you focusing on? A: Dr. Zaki Raqib mentioned that BioHarvest's technology is industry-agnostic, allowing them to serve various sectors like nutraceuticals, fragrances, and pharmaceuticals. They are focusing on nutraceuticals and fragrances due to their favorable margins and shorter time to market. The company is selective with pharmaceutical opportunities due to capacity and development considerations. Q: What is the status of the new manufacturing facility, and how does it impact financials? A: Dr. Zaki Raqib stated that the new facility is expected to start production in the second half of next year, initially running parallel with the existing facility. The new plant is designed for efficiency, potentially improving gross margins. Financially, the company is optimizing resources to complete the first phase of the facility without requiring additional capital immediately. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in BioHarvest Sciences Inc.? Here are five stocks we like better. BioHarvest Sciences reported first-quarter revenue of $8.5 million, up 8% year over year, and kept its 2026 guidance unchanged for both the D2C and CDMO businesses. Cash and deposits rose sharply to $20.2 million from $3.4 million a year earlier. The company is reorganizing around a two-business structure: the VINIA direct-to-consumer segment and the CDMO platform. Management said this should improve capital allocation and execution, while also preparing for a new manufacturing facility expected to begin production in 2H 2027. BioHarvest highlighted CDMO progress in fragrance and saffron, including a $1.2 million stage 2 fragrance contract and completion of saffron stage 1. Management also said it expects more CDMO projects ahead and remains focused on a marketing reset for VINIA to improve customer acquisition efficiency. BioHarvest Sciences (NASDAQ:BHST) reported higher first-quarter revenue and reiterated its 2026 outlook as management detailed a broader reorganization around two business lines: its direct-to-consumer VINIA products business and its contract development and manufacturing organization, or CDMO, platform. The plant cell culture biotechnology company said revenue for the first quarter of 2026 rose 8% year over year to $8.5 million, compared with $7.9 million in the prior-year period. Gross profit increased to $5 million, or 59% of revenue, from $4.6 million, or 58% of revenue, a year earlier. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? Net loss widened to $2.6 million, or $0.11 per basic and diluted share, compared with a net loss of $2.3 million, or $0.13 per basic and diluted share, in the same quarter last year. Adjusted EBITDA loss, a non-IFRS measure, was $1.2 million, in line with the year-earlier period. Cash and cash equivalents, together with bank deposits, totaled $20.2 million as of March 31, 2026, up from $3.4 million as of March 31, 2025. → MP Materials Is Quietly Building a Rare Earth Powerhouse Chief Executive Officer Zaki Rakib said BioHarvest is now managing the company through a “two-lens” framework, separating the operating view of its D2C products business from its CDMO services division. Rakib said the approach is intended to improve performance, capital allocation and execution. Under that framework, the company reported an adjusted EBITDA loss of $904,000 for the CDMO services division and $286,000 for the products division in the first quarter. In the year-ago quarter, those losses were $953,000 and $235,000, respectively. → Micron Investors Face a High-Stakes Moment After the Latest Rally Rakib said the leadership transition announced in April was designed to support the different operating models of the two businesses. He said manufacturing, quality control, quality assurance and regulatory affairs have been consolidated under unified leadership as the company prepares for a new facility expected to operate in the second half of 2027. BioHarvest highlighted progress in its CDMO business, including a fragrance development program and a saffron collaboration with SaffronTech. Rakib said the company completed what it believes was the first stable cell culture development of a rare scent-producing plant used in the global fragrance industry. The company subsequently signed a $1.2 million stage 2 contract tied to the program. Rakib said BioHarvest retains 20% ownership of the compositions developed under the stage 2 agreement, which the company expects could create a long-term royalty stream. Rakib said the fragrance program moves BioHarvest closer to the premium fragrance market, which he described as a $23 billion opportunity within the broader $58.9 billion scents and fragrances industry. He said the company expects to be ready for production in the second half of 2027, aligned with increased manufacturing capacity from its second factory. The company also announced completion of stage 1 of its saffron development program with SaffronTech. Rakib said BioHarvest created a stable saffron cell bank that demonstrated the molecular profile of saffron’s key active ingredients, including crocin, picrocrocin and safranal. During the question-and-answer session, Rakib said the initial focus for saffron would likely be the dietary supplement segment, with potential health-related applications that could include cognition, ADHD and PTSD. He said the company is evaluating different compositions and expects to have more clarity in about another quarter on which indication it may target first. Rakib said BioHarvest expects CDMO service revenue from existing and new projects to total $4 million to $6 million in 2026. Total CDMO revenue, including intercompany VINIA production, is expected to be between $12 million and $14 million. The company also maintained its expectation for total adjusted EBITDA loss of $4 million to $5 million for the year. For the D2C business, Rakib said BioHarvest now has more than 90,000 active users of the VINIA brand. He said VINIA Blood Flow Hydration remains the No. 2 contributor to incremental new customer sales, accounting for 20% of new customer revenue year-to-date on vinia.com and Amazon, behind only capsules. Ilan Sobel, director of the board and co-founder, said first-quarter VINIA revenue growth was modest and below the company’s expectations. He characterized the quarter as a “reset” period, during which BioHarvest reviewed its marketing mix and reduced or paused spending across certain channels to better understand customer acquisition costs and conversion. Sobel said the company began scaling investment again in March with a revised marketing mix that reduced reliance on television and shifted more toward digital channels. He said BioHarvest is focused on improving the ratio of customer lifetime value to customer acquisition cost, along with creative performance, offer structure, funnel conversion and retention. The company maintained its 2026 D2C revenue guidance of $38 million to $42 million and adjusted EBITDA profit of $500,000 to $2 million. Sobel said BioHarvest expects second-quarter results to improve from the first quarter, with the full impact of the marketing changes expected to be more visible in the second half of the year. In the Q&A, Sobel said VINIA Blood Flow Hydration was approaching $1 million in sales since its late-November launch and that the company expects to add a single chew product in the third quarter. He also said BioHarvest is working on additional products in large categories that would use what he described as the VINIA blood flow “dilation and delivery” system. Analysts asked management about the CDMO pipeline, including whether 2026 guidance includes additional relationships. Rakib said BioHarvest expects to add at least three to four additional projects over the next three quarters, including the current quarter, and will announce agreements when signed. Rakib said the company is being selective in evaluating CDMO opportunities. He described nutraceuticals and fragrances as the “sweetest spots” because of their margin profile and speed to market, while noting that nutrition opportunities generally require larger volumes and that pharmaceutical opportunities may have longer cycles. Management also discussed the planned new manufacturing facility. Rakib said BioHarvest expects to begin producing in the new facility in the second half of 2027 and initially run it in parallel with the existing facility. He said capital expenditures should begin to build in the second and third quarters of 2026 as detailed engineering work and supplier decisions progress. Rakib said the company believes it has sufficient funds for the first step required to start producing at the new facility, though he noted that additional capital could be considered later depending on capacity requirements, particularly for CDMO manufacturing under contracts. BioHarvest Sciences Inc is a biotechnology company that specializes in the development and commercialization of plant-based active ingredients through proprietary cell-culture technology. By growing undifferentiated plant cells in controlled bioreactor environments, the company aims to produce full-spectrum phytonutrients and botanical compounds that are difficult to obtain through traditional farming methods. This approach is designed to deliver consistent, high-purity extracts with reduced environmental impact and supply-chain variability. The company's product portfolio focuses on applications across the cosmeceutical, nutraceutical and health-and-wellness markets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "BioHarvest Sciences Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.