BHST

Good morning, and welcome to the BioHarvest Sciences First Quarter 2026 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. As a reminder, this conference is being recorded. I will now hand the call over to Dory Kurowski of LifeSci Advisors. Please go ahead.

Greetings, and welcome to the BioHarvest Sciences First Quarter 2026 Financial Results Conference Call. With us on the call this morning are Dr. Zaki Rakib, Chief Executive Officer, Bar Dichter, Chief Financial Officer, and Ilan Sobel, Director of the Board and Co-founder. 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. BioHarvest Sciences undertakes no obligation to update them. With that, I would like to turn the call over to Dr. Zaki Rakib, Chief Executive Officer of BioHarvest Sciences.

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 two 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 two 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?

Thank you, Zaki, and good morning, everyone. I will provide you with a succinct review of our financial results. A full breakdown is available in our SEC filings and in the press release that crossed the wire before market open 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, aligned 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 totals $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 deposit as of March 31st, 2026, totaled $20.2 million, compared to $3.4 million as of March 31st, 2025. I would like now to pass the call back to Zaki.

Thank you, Bar. As we announced on April 29th, in accordance with our new 2-lens approach, a leadership transition was put in place to optimize the performance of the two 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 set up to a simultaneous multi-project development organization. The successes announced recently in all of our four 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 I and now with the stage II 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 multi-stage development program. This phase of the process is considered stage I, 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 II 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 II 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 II Agreement, BioHarvest retains 20% ownership of the compositions developed, creating a long-term royalty stream. The major principle 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 of plants with multiple health attributes to its active components such as crocin, picrocrocin, and safranal. We have partnered with them to develop and commercialize saffron-derived botanical compounds using BioHarvest's patented Botanical Synthesis platform.

Yesterday, we announced the completion of stage I of a multi-stage development program with Saffron Tech. As a result of the successful completion of stage I, BioHarvest has subsequently moved to stage II under this development agreement to generate enough material expected to support future sustainable pre-commercial testing of saffron. The successful completion of stage I, 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. 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. 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 number two 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 of 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 one-time 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-$42 million with adjusted EBITDA profit of $0.5 million-$2 million. I would 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?

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 periods.

As expected, this significantly reduced overall marketing investment in the first two months of the quarter, which directly impacted near-term revenue growth. In March, we began scaling investment again behind a revised marketing mix. This included a strategic reduction in our reliance on TV and a greater shift toward 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 three years.

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 three years. Now I'll turn the call back over to Zaki.

Thank you, Ilan. 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 ingredient, and consumer health companies actively seeking next generation innovation partners. At the conference, we conducted approximately 30 highly meaningful meetings over three 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 Sciences 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 profiles, sustainability advantages, and defensible innovation into the marketplace. Overall, the conference significantly reinforced our confidence in the growth potential and strategic positioning of BioHarvest Sciences 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 Sciences 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 US 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?

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Sameer Joshi with H.C. Wainwright. Your line is open. Please go ahead.

Thank you. Hey, good morning, good afternoon, Zaki, Bar, and Ilan. Thanks for taking my questions. 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 multi-billion 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.

Thanks, Sameer Joshi, actually, right? Maybe I'll take the opportunity to share something with everyone on the call and I'll address your questions directly. You know, 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 the beautiful color of that substance. Really, I was very encouraged, and I just wanna 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 multi-billion dollars 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. 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. One of the things about saffron, as you know, is really addresses a lot of areas, cognition, ADHD, PTSD, among other things.

What we're doing now is, as we analyze the results, we're looking for the possibility of having multiple compositions, Because as you know, there are, and I mentioned that in my speech earlier about the three major ingredients. Interesting enough, the ratio between these ingredients may target, depends on which ratio, you could target one indication better than the other. We're gonna 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 stage II so that we can have enough samples, so we start doing some possible trials.

My goal is to start manufacturing the product the second half of next year in tandem with the factory that we're building, as you probably know. 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, it's 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. That's kind of the approach we have and the timeframe that we have in mind. I will probably need another quarter before I can tell you which indication we're likely to be focusing on.

Understood. You know, this was helpful and, the saffron target is really a well-chosen target. Congrats on that.

Thank you.

Touching on the CDMO pipeline, so to speak, I know you gave a outlook of around $12 million-$14 million, and there will be some of it, a meaningful portion from intercompany VINIA. The rest of that outlook, does it include two or three or four additional, sort of relationships that you would be announcing between now and the end of the year?

The answer is yes. We on purpose segregate between the third party, call it, or revenue, which is service for 2026. It's all service, all development, right? The production, which is internally right now, and hopefully in 2027, we're gonna produce not just VINIA, but other substances. In 2026, we guided for $4 million-$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 know that we're doing four molecules right now in simultaneously. At least 3-4 additional projects, allow me to call them projects, and these will be across the next three quarters, including this quarter. Of course, we'll announce them as soon as we sign the appropriate agreement.

Our pipeline now calls for a minimum of 3-4 new projects that will go in. Interesting enough, some of them might be from an existing substance. You know, part of the assets of the CDMO, and I think I'll 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. Basically more of a de-risking. As you know, stage I in our development with the Botanical Synthesis process is a stage with a little riskier. By bringing to the market or bringing to the customers something that has already been de-risked, 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 four different substances in our new factory.

Sounds really good. Thanks for that color, Zaki. Just one more question on B2C actually. 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?

Thank you, Sameer. When it comes to the DTC business and from a new product perspective, I first wanna 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. I think that's, you know, 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, that's pretty quick and the ramp-up's going really well. The consumer feedback is really overwhelming. The reviews are 4.7 out of 5, from now, you know, 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 VINIA 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, you know, we're talking multi-billion-dollar category just on Amazon. Our rankings are improving day by day on Amazon. What's amazing about this product, which we don't have in the rest of our business, is there's a seasonality curve.

As we now are 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 gonna significantly drive the second half of the year for us. Very, very encouraging on Blood Flow hydration. 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. 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 electrolytes 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." 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 to the marketplace, we will again double down and 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. 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 a, as its, fair share representation increases of the total supplements, pie. That we will bring into the marketplace in the 3rd quarter. As I said in the last earnings call, you know, we are targeting a number of, you know, multi-billion dollar categories that we will leverage our VINIA Blood Flow dilation and delivery system on to be able to really deliver a 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, you know, breakthrough products to the marketplace.

Understood. Thanks for that color, Ilan. As Zaki also highlighted, the VINIA is a adjuvant and can be combined with even saffron when that product comes online. Looking forward to that. May I squeeze one more on the financials? I think you have hired some new business development persons or team for CDMO. Should we expect the SG&A or marketing expenses to slightly increase as the next three quarters unfold?

The answer is no. No, that's been.

Just modest.

That's no, that's a very modest increase as a result of hiring. In fact, I did have last year. It's actually a replacement of someone that I had last year. It's actually not even a new additional.

Okay

Person in overall in the budget. No. I mean, for purpose of what we're trying to do this year, there will be no increase in the marketing costs for the CDMO.

Understood. Good. Thanks for taking my questions. Congratulations on all the progress, and good luck.

Thank you so much. Thank you.

Your next question comes from the line of Nicholas Sherwood with Maxim Group. Your line is open. Please go ahead.

Hi. Thank you for answering my question. You know, kind of looking at the CDMO business, how are you evaluating your pipeline of opportunities on who you wanna add? You know, 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, you know, trying to keep things broad and, you know, make sure that you're not putting everything into one basket, you know, looking at these pipeline of opportunities? You know, how should we think about your thought process?

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, you know, fragrances as well as nutrition. Each one has its own characteristics. 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're happy with what we do now with the Tate & Lyle, you know, 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 the volume.

I'd say our sweetest spots are in the nutraceutical and the area of fragrances. Really, this breakthrough in fragrance is going to create an increased pipeline in that area. Those are interesting because on the nutraceutical, it's kind of mid volume, really good margins and speed to market, meaning those don't require long cycles of regulatory approvals to bring to market. That shrinks, once we're crossing phase II, trials can be conducted, so the cycle is shorter. The fragrances is even shorter from a regulatory, and they bring in great margins. Those are the spots where I believe the pipeline is converging faster. We are a little more selective.

We're trying to gravitate our attention to those two markets. 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 on development, as well as where we think the pharma opportunities in terms of manufacturing. Now, we're not saying no to pharma, but we're a little bit more selective in timing of bringing them in. What you will see more likely in the next few quarters would be more nutraceutical and call it cosmetics in general. Then progress that we would be making in the area of nutrition with Tate & Lyle, you'll be hearing more about it in the next couple of quarters.

Okay. Kind of a follow-up question on the cosmetics, scent agreements. You know, do you think you'd be doing more of these through your current partner, and then they would potentially be, you know, along with you selling the product onto, you know, whether it be a house or do you think you'll be kind of going directly to some of these larger, you know, brands that are creating, you know, whether it be like a perfume or, you know, a scent and a lotion? You know, like, how should we kind of think about?

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. It's really not just what people buy in the store in terms of spray or perfume. It's more than perfume. The partner that we have has an approach of more likely B2B, and then, you know, some lined up companies that would be buying what we produce.

As you know, we're at 80/20, so 80% is owned by the partner, 20% is owned by BioHarvest, which will increase our stream of revenue. I believe that this fragrance can start getting into the market in the second half of next year. I don't think we're gonna have a lot of capacity initially, requirement to support that effort because in the sampling, in the market, et cetera.

You'd see a mix of businesses that will be taking the raw material that we'll 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 what we produce to serve the fragrance industry top brands that are looking into this particular fragrance ingredient, and name it, and they're all looking into that particular source. Unfortunately, I will 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, you know, hitting the Western market recently with many designers, major designers basically adding it to the line of fragrance products.

Understood. Thank you for that, gentlemen. My last question is, you know, I know that it was presented as a, you know, very long-term opportunity, you know, a couple of years out. What sort of interest have you seen in the plant-based exosome extraction, you know, breakthrough that you announced last year? Just kind of give us as many details as you can on, you know, that, how that's developed.

A great question. It's actually not so much of long term. This is part of the CDMO assets. We are in the midst of testing now quantitatively, the exosomes that we have. We do produce exosomes. Not only do we produce exosomes, but we produce them at commercial quantities in our bioreactors. Now we're in the process of characterization of the content of those exosomes to decide which markets they best serve. Exosomes are not, you know, as we study better what they can do. By the way, I mean, for plant-based exosomes, we need to call them something different. They're called extracellular vesicles. Those extracellular vesicles and the content that they will have may target even dietary supplements.

We can decide for the case of VINIA, do we wanna double down and have additional dietary supplement that are based on red grape but with various ingredient. I think we did talk about viniferin as one of the ingredients that is very interesting and/or to go after the topical markets with those exosomes 'cause, you know, exosome have the advantage of better penetration of the skin, just because of their size, about one over 100th of a cell size. We're weighing our opportunity based on the results, and hopefully in next quarter, by this time that we do our earning 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 downstream processes. You know, our exosomes are kind of a benefit. We're getting them as gravy out of the media, right? When we dry our material, we have a lot of media 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. We certainly would be able to speak about it next quarter more from a quantitative standpoint of the what does it mean, what would a 1 mg of that material contain in terms of viniferin, and then talk more about when can we bring this to market and what would be the best vehicle to do that.

I would just add that it's a very important asset that the CDMO has. Now when we engage with 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. With that, they also have the potential of developing one of these extracellular vesicles in addition. It's like a 1 + 1, which makes our CDMO proposition to customers extremely compelling when you think about the initial stage I costs and the ability to really drive significant value for our customers.

Yeah. I'm looking forward to hearing more. Thank you for answering all my questions. I'll return to the queue.

Your next question comes from the line of Matt Hewitt with Craig-Hallum Capital Group. Matt, your line is open. Please go ahead.

Good morning. 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. You've got 3-4 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 turned into actual business.

Actually, in terms of, there are two 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 simultaneously yet. I now have the ability to select which projects are better to bring in this quarter, next quarter, and the one after, right? If we look at 3-4, which I have in the bucket, let's say, for the remainder of the year, I may reorder them in a way where one of the 3-4 would be the one from Barcelona. Actually, you'd be surprised that there's a faster conversion of the through the Barcelona meetings as to the urgency of people want to differentiate themselves.

I would say probably one of those Barcelona opportunities would be with one of the already pre-developed molecule that we have. As you know, we have a series of molecules that we've already had developed, that would be a faster process, that's why I can sign those deals a little faster because I have de-risked, especially the first stage, which is the cell bank. I would say Barcelona contributes one out of those four, the rest are part of the pipeline that exists. The others from Barcelona can be put into the pipeline that can start creating more projects into 2027 and beyond.

Got it. Maybe a question regarding the new marketing strategy. Given that, you know, January, February, you were kind of tweaking some of the go-to-market strategy there. March, you went, you know, kind of initiated the new strategy. What are some of the initial feedbacks or metrics that you were tracking in March, and how does that shape up for the rest of the year? Thank you.

Ilan?

Yeah, sure. Thanks, Matt. When we looked and we stepped back and we looked at, you know, what the mission was for the team, we were very, you know, 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 Grüns by Unilever for $1.2 billion. Happened the last four weeks. You have a ratio of lifetime value to cost of acquisition of 3:1. This is like the sweet spot. 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 wanna be best in class.

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 500,000 customers and from, let's say, $35 million of revenue with the ambition to get north of 100 million. Matt, not to do it, you know actually two days ago, so today's Thursday, so on Tuesday was our five-year anniversary of entering into the U.S. business. In the five years, you know, we built a significant business, number one resveratrol polyphenol brand in the U.S. We don't wanna take, for the next milestone, which is that 100 million, we don't want it to take another five years. No ways.

That's part of me stepping into this role to build the architecture and the blueprint to be able to go from $35 million-$100 million fast. Really, really fast. 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 gonna see us coming out with a much stronger offer in the marketplace to improve conversion and then improving the critical flows of email signups, post-purchase flows and really optimizing our broader ability to retain customers.

We have a very high retention levels, but we wanna do better. 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 II, which will be implemented in the first of June, where there will be even more fundamental changes that we're making, not just in the marketing mix, but actually in what hits the consumer, which I'm really excited about, and we believe will have significant impact on our overall conversion.

Got it. Thank you.

Your next question comes from the line of Sean McGowan with Roth Capital Partners. Your line is open. Please go ahead.

Thank you. Hello, everybody. 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 I to stage II for not just Saffron Tech, but for, you know, any of those businesses? You know, what happens financially there?

Phase I normally is in the vicinity in terms of contract size of half a million dollars. Entering phase II is normally a contract between $1 million and $1.5 million, depends on the molecule. Then there's another $1 million to $1.5 million in stage III. Overall, we're doing our best to try to shrink development within 24 months from zero to get finalized stage III. When you finish stage III, you're basically ready to go into production. That's how the way you should be looking at it, phase II, $1 million to $1.5 million, phase III, $1 million to $1.5 million.

What happens to expenses during that transition?

When completing phase II, meaning 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 de-risking the proposition. Normally, stage I is the riskiest. We haven't seen anything in the past that shows that stage II, if you have stage I, if you cross stage I, you can do stage II. Then you have the final. End of stage II, you know what the final product is. You know exactly what the COA is going to be. You know 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 II. And normally people making their mind about the move from So, for example, you see that between completion and stage I and signing an agreement on stage II, sometimes it's a matter of a few weeks. I expect between stage II and stage III, maybe a little longer, maybe a month or two, or maybe even three months lag between the two. What the good news is, we're able, before the end of a stage, we're able to provide some material so people can start doing some tests and not necessarily waiting until the end. What we optimally is we wanna make sure that people can move as fast as possible between one stage and another.

Thank you. That's very helpful. 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?

The new manufacturing facility you're talking about, Sean?

Yes. Yeah.

Yeah, yeah. We are looking at starting to produce in the second half of next year, which means that I still will run in parallel the two facilities. Ultimately, the goal is down the road because the new facility is a more efficient facility. Hopefully, you're gonna see that in terms of gross margin, et cetera. Sometime in 2028, we're looking at reducing capacity in the first facility in favor of increasing capacity in the second facility. We're starting to add capacity in the second half above what we have in the 1st one in the second half of next year.

Okay. In terms of cash flow and investment, I thought there'd be more investment reflected in the cash flow as well.

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. We're optimizing a few areas and so that what we have can suffice to be to complete 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, you know, 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 faster requirement for capacity.

That would, to me, would be good news, and that would be something that we would be able to finance in different ways. 'Cause remember, CDMO manufacturing would be done under contracts. It's not a D2C situation, but it would be done under contract. Ilan, do you?

Yeah. Sean, I just wanted to add that, you know, the focus of the team now, and this is something that Zaki's, you know, 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.

New layers of technology. 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, etc. You should start to see that CapEx build in the second quarter and third quarter of this year.

Okay. Thank you. That's very helpful. My final quick question maybe for Bar is, when will the SEC filing hit? 'Cause I don't see it yet in.

I- On the website or on the SEC.

It should be out very soon.

Okay. Thank you very much. Best of luck.

Thank you.

Thank you, Sean.

There are no further questions at this time. I will now turn the call back to Dr. Zaki Rakib for closing remarks.

I'm gonna say what I said earlier in the call. I smelled success, I saw success, and 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 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, etc. Once again, I wanna thank everyone here and looking forward to our next earning in August, I guess.

Yeah, August 14th.

Yeah. Thanks, everyone. Enjoy the rest of the day.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the BioHarvest Sciences Fourth Quarter and Year-End 2025 Earnings Call. [Operator Instructions] I will now hand the call over to Justin Meiklem, Head of Investor Relations. Please go ahead.

Greetings. With us on the call are Dr. Zaki Rakib, Chairman; Ilan Sobel, Chief Executive Officer; and Bar Dichter, Chief Financial 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 40-F, 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 now turn the call over to Ilan Sobel, Chief Executive Officer. Ilan?

Thank you. I want to thank you all for joining us on today's call. For those of you who are new to our story, BioHarvest's North Star is to discover, develop, manufacture and democratize life-changing compounds from plants that will positively impact the health and wellness of hundreds of millions of consumers and preserve the planet for generations to come. We are a leader in Botanical Synthesis, a process that utilizes our patented non-GMO platform to produce plant-derived compounds with greater potency than the plant without having to grow the plant itself. Importantly, we required the plant just once to be able to identify the cells in the plants that produce these critical phyto nutrients. Utilizing these cells, we conduct hundreds of experiments with our technology, optimizing the environmental conditions and food that we feed the cells to be able to get the cells to mirror and magnify the levels of the phyto nutrients they produce versus the plant. We then scale the production and elicitation of these cells in industrial scale bioreactors to produce highly soluble, bioavailable and efficacious final material in a short period of time. Our technology allows us to improve nature with the power of our science and create innovative, unique and active molecules and compounds that we can produce with unique consistency, economic viability and commercial protection. We can use these compounds in our own proprietary products or to partner with key customers, which serve high-value markets in the pharmaceutical, nutraceutical, cosmetic and fragrance and nutrition sectors. BioHarvest today operates through 2 distinct but highly complementary business units, our direct-to-consumer products division, led by our flagship VINIA nutraceutical platform, and our CDMO services division, where we partner with third parties to develop novel plant-based compounds using our proprietary Botanical Synthesis technology. These 2 businesses represent the company's dual growth engines and provide BioHarvest with multiple pathways to revenue growth and long-term shareholder value creation. Given their different operating models, capital requirements and stages of financial maturity, we are managing the business through a 2 lens framework designed to optimize performance, capital allocation and strategic execution across both divisions. This structure reflects the way we have operated the company since late fourth quarter 2025. And beginning in 2026, our manufacturing center of excellence will be incorporated into the CDMO organization. This will further align our manufacturing capabilities under a single platform serving both our direct-to-consumer products, business and our external CDMO partners. Importantly, while both divisions are positioned as growth engines, there are at different points in their development. We expect the D2C business to achieve profitability in 2026 while continuing to invest behind growth and customer acquisition. In parallel, we believe the CDMO business has the potential to accelerate meaningfully in 2026 and beyond, supported by continued investment in technology capabilities and commercial infrastructure to unlock its full value potential. Now turning to the fourth quarter. We are pleased to report that our fourth quarter revenues were $9.1 million, falling within our guidance range, up 25% year-over-year. This impressive result was due to a record number of sales orders that came in from our core consumer products business that generated over $3 million in sales just for the month of December 2025, a record month. Revenues were $34.5 million for the year, up 37% from the previous year. Our gross margins were 58% for the fourth quarter, up 100 basis points compared to the same period last year, and 59% for the year, up 400 basis points compared to last year. While the ongoing conflict in the Middle East has understandably raised concern, BioHarvest's research and manufacturing operations are operating continuously without any interruptions. Recent airspace closures have affected commercial traffic, but cargo flights have gradually resumed, and we are meeting supply chain obligations and remain fully committed to meeting our product supply obligations to our partners. However, as the situation is constantly fluctuating, we, of course, continue to monitor developments closely. Before I go deeper into defining our achievements and focus areas for 2026, I'm going to hand over to Bar to share more details on the financial performance. Over to you, Bar.

Thank you, Ilan. Good afternoon, everyone. I will provide you with a sustained view of our financial results. A full breakdown is available in our SEC filings and in the press release that crossed the wire before market closed today. Please note that all figures are in U.S. dollars unless stated otherwise. Revenues for the fourth quarter of 2025 increased 25% to $9.1 million, within management's guidance. The increase was largely due to the growth in the VINIA franchise, which exceeded 85,000 active users as of March 2026. Gross profit increased 27% to $5.2 million or 58% of total revenues in the fourth quarter of 2025 as compared to $4.1 million or 57% of total revenue in the same year ago quarter. The increase in gross margin was primarily driven by the benefit of revenue mix, in case manufacturing scale and improved manufacturing yields. Total operating expenses for the fourth quarter totaled $6.3 million as compared to $5.8 million in the same year ago quarter. The increase in operating expenses was primarily due to an increased marketing spend and higher expenses from the CDMO service division. Total operating expenses shrunk on a percentage of revenue to 70% as compared to 80% of revenue in the same year ago quarter. Net losses for the fourth quarter of 2025 totaled $2.2 million or $0.10 per basic and diluted share as compared to a net loss of $3 million or $0.17 per basic and diluted share for the same period last year. Adjusted EBITDA and non-IFRS measure totaled $0.5 million as compared to an adjusted EBITDA loss of $1.8 million for the same year ago quarter. Cash and cash equivalents as of December 31, 2025, totaled $23 million as compared to $2.4 million as of December 31, 2024. I would like now to pass the call back to Ilan.

Thank you, Bar. Let's now turn to talk about the performance of our VINIA business. We continue to see strong growth in our core business, with our website, vinia.com, continuing to do the heavy lifting and delivering approximately 80% of our revenues, with over 90% of these revenues being highly valuable subscription revenue. Amazon sales, which comprised approximately 20% of our sales revenue, continued to also be a strong contributor for growth in our business. I'm also extremely proud to announce that given the full year revenues of $30.6 million for our D2C business in the U.S.A., we have achieved the total position of being the #1 Resveratrol polyphenol brand in the United States of America based on estimated market sizing utilizing Nielsen IQ 2025 market projections for total U.S.A. for Resveratrol nutritional supplements and beverages and Amazon sales data for Resveratrol nutritional supplements. This is a major achievement for us as a company, given the fact that we have achieved this major achievement in less than 5 years from entering the U.S. market. And today, collectively with Israel, we have more than 85,000 active users of the VINIA brand. VINIA's leadership position is driven by its clinically demonstrated ability to increase arterial dilation, improving blood flow and enabling enhanced delivery of oxygen and nutrients throughout the body. This mechanism of action addresses what many medical experts increasingly recognize as one of the most foundational elements of human health and performance, efficient blood flow and oxygen delivery. Given the recognized importance today by medical experts on arterial health and blood flow and the inimitable characteristics of our VINIA compound, we believe that we have developed a best-in-class blood flow transportation system in the body to make other synergistic nutrients work harder. This, we are seeing as a major asset, which we will utilize in 2026 to accelerate the growth of our direct-to-consumer business. I want to turn our attention now to talk about one of our major focus areas for 2026, our VINIA BloodFlow Hydration launch, which we officially launched on December 3 to the U.S. market with a very differentiated promise of providing American consumers with electrolyte powering cells through better blood flow delivery. Let me explain for a moment how important that is. There are a myriad of electrolyte drinks that currently exist in the market today for hydration. But it's important to understand that water and electrolyte alone are not enough. Without blood flow, the water and electrolytes have nowhere to go. VINIA significantly increases arterial dilation, enhancing blood flow and improving the delivery of fluids, electrolyzed oxygen to our body organs, tissues and trillions of cells. VINIA acts as an amazing blood flow transportation system across our 60,000 miles of arteries, veins and capillaries for any nutritional ingredients, in this case, electrolytes, to better reach the body's trillions of cells due to the ability to increase blood flow and oxygen via increased arterial dilation. We have been very encouraged by the first 16 weeks of our BloodFlow Hydration launch. So now I'd like to share some specific facts that highlight why we believe we have a category disruptor in our hands, given its category differentiation anchored in our core strategy of delivering superior science, superior efficacy and superior taste. Since launch, our VINIA BloodFlow Hydration has achieved the following key results, which give us the confidence that we have a high-performing category disruptor in our hands, which requires further investment to realize its key potential. One, VINIA BloodFlow Hydration is now the #2 contributor to incremental new customer sales with 15% of new customer revenue year-to-date on vinia.com, ahead of all other categories except capsules. Two, VINIA BloodFlow Hydration has achieved a verified rating of 4.8 out of 5 via vinia.com after more than 90 reviews. And three, VINIA BloodFlow Hydration has achieved a rating on Amazon of 4.9 out of 5 after approximately 50 Amazon reviews across all flavors and variety packs. This is currently one of the highest rating of any top 100 electrolyzed products on Amazon. Given these very positive early signals over the past 16 weeks and the approximate 50% premium we have been able to command versus key market leaders, we will accelerate direct marketing dollars behind VINIA BloodFlow Hydration to capture our fair share of this $17 billion category in North America. VINIA BloodFlow Hydration plays an important role for us to be able to broaden the age demographic of our core customer base. Today, our customer base is skewed towards our super senior consumers. These are consumers who are above the age of 65. We have identified that VINIA BloodFlow Hydration is able to appeal to this consumer base, but also, importantly, has significant traction with our [ super seeker ] customer, age 35 to 65, who is looking for better longevity options to support their aging process. And more specifically, our super active consumer, who is aged 20 to 35, who are looking for a hydration solution that is more performance-based. Accordingly, we have spent a large part of Q1 adjusting our marketing mix away from traditional TV aimed at our super senior consumer, which has been the lion's share of our marketing spend dollars in the past, and moved this to digital channels such as Facebook, Instagram, YouTube and now, we have recently opened our TikTok shop so as to more effectively recruit our important younger super seeker and super active consumer segments. This shift to digital media channels also provides us with an opportunity to improve our cost of customer acquisition versus our previous heavy reliance on TV. We are currently utilizing Q1 to best optimize our marketing mix to deliver the step change in growth we expect in Q2, driven by scaling VINIA BloodFlow Hydration and its ability to appeal to a much broader consumer audience with the expectation to drive aggressively, new customer acquisition in Q2 at a lower cost of acquisition. I want to talk now about our second major focus area, which I termed as a big bet during our previous quarterly update in November last year and is also becoming a strategic asset for the company: our health professionals, our Health Pros channel. This initiative, where we are acquiring critical health-driven opinion leaders with large social media followings to advocate and sell VINIA to their social media followers, is really starting to scale. The initiative has gained significant traction over the past 90 days, and we are starting to see the positive effects of scaling these opinion leaders. Right now, we have partnered with 250 Health Pros, and we will be adding approximately 25 to 50 Health Pros per month. This channel, for example, in the month of March, has delivered more than 10% of incremental new customer revenue, and we expect it to be an important contributor to future new customer revenue as this marketing channel continues to scale. Further, this month, we kicked off a consumer challenge for our BloodFlow Hydration product on March 17, together with all our Health Pros. And as of today, more than 1,300 consumers have signed up to our 30-day BloodFlow Hydration challenge, and we are seeing amazing results across social media with consumers posting their results every day, highlighting their increase in physical activity when partnering with VINIA BloodFlow Hydration. In 2026, we will continue to leverage this powerful fact that VINIA is a best-in-class nutrient delivery system for ourselves, given its ability to significantly increase arterial dilation, improving blood flow and the delivery of targeted synergistic active ingredients to our body's organ tissues and cells. Accordingly, our goals for this year are to leverage this insight to drive aggressive premiumization of our business by targeting relevant multibillion-dollar synergistic revenue pools in the nutraceutical industry, where we believe our blood flow delivery advantage, combined with high-performing synergistic active ingredients, will be category disruptors and will enable us to increase key financial metrics such as revenue per month and gross profit margin delivery. These opportunities, we are terming VINIA Plus opportunities, where we are considering entering multibillion-dollar categories combining VINIA with a synergistic nutraceutical ingredient and leveraging our consistent strategy of superior science, superior efficacy and superior taste to bring meaningful differentiated premium products to the market to win consumers' choice in these categories. VINIA Plus our past marketing categories that we are considering entering include the multibillion-dollar greens category focused on gut microbiome health, the cellular health category and the Omega 3 [ CoQ10 ] heart health category, as well as a number of other categories. The company will share more information about its plan to launch VINIA Plus premiumized product over the course of the next few months. Let me now excitingly turn to our CDMO business. As a reminder, our contract development and manufacturing organization, or CDMO business, was formally created in Q2 of 2024. Along with the consumer products side of the business, they form our 2 growth engine strategy that we believe warrants a 2 lens approach. The distinction between our products direct-to-consumer business from our B2B CDMO business reflects the operational reality of how we manage the company today and has already resulted in a meaningful acceleration in the CDMO performance, as will be highlighted to you all shortly. Under this model, the CDMO operates as a fully integrated business unit, including R&D, manufacturing and business development. This organization alignment has significantly improved execution speed, focus and accountability. Investments in this unit can now be tracked more effectively in terms of ROI. Since its creation, CDMO has evolved beyond the traditional model of service to what can be best described as forming strategic partnerships with each of its customers versus just more transactional R&D-based relationships. This shift reflects the collaborative nature of our engagement, where we often participate in long-term value creation, including royalties, and in certain cases, ownership in developed compositions which we may in the future commercialize and bring to market using our direct-to-consumer e-commerce platform. It also reflects the additional set of skills added to the unit capabilities that include AI-driven molecule discovery. From a financial perspective, the CDMO side of the business generated approximately $2 million in third-party revenue in 2025. If we also include internal manufacturing of VINIA powder supply to our products business, total activity would have been approximately $9 million in revenue, demonstrating the scale of manufacturing infrastructure already in place. As a reminder, our development program under the Botanical Synthesis process for new molecules or compounds ranges from $2 million to $3 million and spans 18 to 27 months. It is divided into 3 stages, where the first stage, Stage 1, is the creation of the cell bank that is needed for the subsequent stages, Stage 2 and Stage 3. In Stage 2 and 3, cells are propagated in small- to large-scale liquid medium bioreactors. Stage 3 completion signifies the readiness for the industrial or commercial manufacturing. Right now, we are working on multiple high-value projects on the CDMO side of our business. Specifically, we are advancing quickly all active development programs for third parties, each focused on a unique plant-based composition targeting multibillion-dollar end markets. These are: 1 program in nutraceuticals with *Saffron Tech, a pioneering revolutionizing advanced cultivation methods for *saffron, one of the world's most valuable and health-promoting mechanicals to develop saffron-derived botanical compound; 2 programs in nutrition, including the previously announced collaboration with Tate & Lyle, a leader in natural sweeteners; 1 program in the multibillion-dollar fragrance and scents market with a prominent UAE investment group to develop a plant-based fragrance compound derived from a plant that is under significant threat due to overharvesting and habitat losses. Whilst we have made strong progress across all 4 projects, I want to spend a little time highlighting the biological breakthroughs we have recently achieved in our fragrance program, which was announced earlier today. Our CDMO division has successfully completed Stage 1 of a multistage development program for a rare scent producing plant used in the global fragrance and scents industry. The program is being conducted under contracts signed approximately 1 year ago with a prominent UAE-based investment group and represents what BioHarvest believes to be the first ever successful creation of a stable cell culture for this rare and endangered fragrance-related plants. This milestone positions BioHarvest to enter the growing particular premium scent and fragrance segment, estimated to represent a $12 billion market opportunity, at least. 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 is growing across the Middle East, Asia and luxury Western perfume market. The development was achieved using BioHarvest's proprietary Botanical Synthesis platform technology, which enables the production of rare plant-derived fragrance compounds without the need to cultivate or harvest the original plant, which, in fact, is classified as an endangered species and typically grows only in highly specific regions of Southeast Asia. The rare molecules responsible for the scent and aroma of this particular plant, including sesquiterpenes and chromones, was successfully identified in the Stage 1 cell culture, with molecular profiles closely matching those found in the original plant. This achievement demonstrates the ability of BioHarvest's platform to replicate highly complex plant-based fragrance compositions that include, but not limited to, the terpenes family of molecules previously considered extremely difficult or impossible to reproduce sustainably. I want to reiterate that under the terms of the agreement, BioHarvest retains 20% ownership of the compositions developed through this multistage program, creating a long-term royalty driven economic model as development advances towards commercialization. This structure aligns with BioHarvest's evolution from a traditional CDMO to a partner development and manufacturing organization, or what we like to call a PDMO, where the company participates directly in downstream value creation. With the successful completion of Stage 1, we are ready to move to Stage 2, where cells stored in a proprietary cell bank will be propagated in liquid medium to generate significant biomass. This biomass is expected to be available for pre-commercial testing within 6 to 9 months, with full development and industrial scale manufacturing anticipated within 12 to 18 months. For the pharmaceutical program, which commenced in 2024 in which the company announced Stage 1 completion in 2025, the company has completed the first step of the 3 steps within Stage 2. Given the long cycles in the development of pharmaceutical programs, further research is being conducted to determine the optimal next steps within Stage 2 in order to best meet the customers' FDA-driven requirements. With our 2 lens focused approach and the success that we are seeing in progressing our projects, we are heavily investing in improvements of further CDMO capabilities, including AI-driven development tools to optimize development time lines, improve success rates and build a library of synthesizable plant-based molecules. To further accelerate pipeline conversion, we added a new Vice President of Business Development in early March, strengthening our commercial capabilities and customer outreach, and we are proactively investing in the development of additional biological assets to expand our portfolio of opportunities for current and future partners. Independent of specific contracts, BioHarvest is advancing a pipeline of highly sought-after plant-based molecules through early and mid-stages of its proprietary Botanical Synthesis process, thereby derisking and accelerating potential customer programs. This growing portfolio already includes assets that have progressed beyond Stage 1 such as basket derived. PGG derived from pomegranate and selected polyphenols from blueberry as well as emerging capabilities in plant-based extracellular vesicles, otherwise called exosomes. By building this library of partially developed biological assets BioHarvest is positioning CDMO to offer faster development times, lower risk profiles and differentiated value propositions to partners across the nutraceutical, pharmaceutical and cosmetic and fragrance markets. Ladies and gentlemen, 2025 was a defining year for BioHarvest. We delivered strong execution across both of our growth engines, scaling our core consumer business, reinforcing VINIA's category leadership and building meaningful momentum in our CDMO platform through strategic partnerships and important development milestones. At the same time, we strengthened our balance sheet, expanded our customer base and entered 2026 with the capital and capabilities and structure to support our next phase of growth. Looking ahead, we believe BioHarvest is exceptionally well positioned. The early performance of VINIA BloodFlow Hydration, our expansion into more efficient and diversified customer acquisition channels and the growing strategic value of our CDMO platform give us increasing confidence in our ability to accelerate growth and create meaningful long-term value when using our 2 lens model to optimize strategic decisions across our direct-to-consumer and CDMO business units. We are entering this next chapter with momentum, with focus and a clear path to building a larger and stronger company. With our platform, our products, our partnerships and capital in place, we believe BioHarvest is entering 2026 in its strongest position yet. Thank you very much for your time. We will now open the call to questions.

[Operator Instructions] Our first question comes from the line of Anthony Vendetti with Maxim Group.

So it seems like the CDMO business is really starting to develop. And with this new contract on the fragrance business, it seems like it's just adding to what you did in '25 on the pharmaceutical side and on the Tate & Lyle side. So maybe, Ilan, if you could just give us a little more detail. You did mention a little bit about the pharma company. Can you give us a little more detail around how the Tate & Lyle contract is going and expectations for that particular contract in '26?

Sure, Anthony. I'm going to firstly just kind of take it up a level of abstraction to emphasize how happy Zaki and I are in the significant progress that we've made over the last 4 to 6 months in the CDMO. And a big part of that has been anchored in structuring the organization so that we're allocating resources in a way that those resources are fully dedicated to the respective business units. So now our R&D organization is 100% focused on working on the CDMO. And boy, it's amazing to see what focus can do. And secondly, as we look at the 2 lens model and really start to make conscious decisions by -- given the fact now that we're really running as 2 separate businesses and we're able to really understand the cost structure and the financial performance of these businesses, we're able to, therefore, ensure that we're allocating resources in the right way and making the right investment decisions. And we've started that investment process towards the end of the fourth quarter, continued in the first quarter. And we're seeing major, major dividends with the team really knocking the ball out of the park with some of these milestones, where really, we're breaking biological barriers and unlocking the ability to be able to capture value in multiple billion-dollar categories. I'm going to ask Zaki to go into a little bit more detail across some of the projects so you understand the momentum that we have across this part of the business and why we're so eager to continue to lean in and invest more in this business in building critical capabilities and specifically as well, with the manufacturing organization now coming underneath the CDMO. It makes perfect sense. If you think about it, the manufacturing business should be inextricably linked into the CDMO given that just the name, contract development and manufacturing organization. And as a result of that synergy as well, we are seeing significant progress and are making the required investments in manufacturing, in AI, in ensuring a computer vision, in developing an elicitation center of excellence. And these investments, we're starting to see pay off. And they will continue to pay off in 2026 and be able to drive really nonlinear growth as we move into 2027. Zaki,over to you to give a little bit more texture around the specific projects.

Sure. Thanks, Ilan. You've covered a lot of the ground already. So I thank you for that. So just wanted a little bit of background to -- for you to be able to scope, I guess, your question is, how do you analyze the success we've had in the various projects where -- that are undergone within the CDMO organization. So we -- plant molecules can cover multiple industries, the 4 industries we cover, the nutrition industry where we have 2 molecules currently in development. We have the fragrance, which is part of the overall cosmetics and beauty. And then we have the pharma, the projects you mentioned earlier. And we have a nutraceutical project with the saffron. So those are the major projects that are going inside the CDMO organization besides the assets we continue to build. So we advance our own molecules so that when we go talk to a customer, we can offer them a more advanced stages. Ilan mentioned earlier during the call, the 3 stages of development. Each stage within itself is divided into various steps, and each stage carries a certain revenue target. So as you try to model the overall project between 18 and 27 months, $2 million to $3 million is the -- was the NRE, the revenue that we can see. The beauty of the diversification across multiple industries is that some -- is the profile of risk/reward. Some of the projects like in pharma may take more time, but ultimately, because of the high margins that they carry, would provide a lot of reward on the back end of the project, meaning the manufacturing stage where we expect to start even in the latter part of 2027, the second half of 2027, we are expecting to start manufacturing some of the molecules or compounds that we are currently -- that are currently in development. So every time 1 crosses 1 stage and moves to the next one, you need to keep in mind is that it advances us and gets us closer to the commercialization. Or from our end, it would be the manufacturing phase. So if -- I want to give you a quick update on all the various projects. While we have already announced on the pharma side that we've crossed Stage 1 and we have actually recognized revenue associated with some elements of Stage 2, typical to pharma, there's this time where it's more research that is done on both ends, be it the customer as to try to make sure that the adjustments are made to comply with all the FDA regulations and whatnot is required. This is very typical. We're not surprised. We expect to go through that, will take some time. That has been factored in as we look at the revenue projections, both for 2025 and obviously, for 2026 and beyond, as you will be seeing it later. I think it's included in our news release on what we're guiding for 2026. So when we look at the fragrance projects, what's really nice about it is that we completed Phase 1 at a record time from the time we got the source material. Although we signed the agreement earlier, usually, the time starts from when we receive the source material from which we developed the cell culture. We expect it to be running much faster, and we expect it to reach within the next 6 months, so the second stage, which carries a higher revenue than Stage 1, subsequently Stage 2 and then -- 3, sorry, and getting into production. Ilan mentioned the unique breakthrough, first time ever anyone develops a stable culture [ 8 ] molecule like the sesquiterpenes and chromones and whatnot. This is really -- we feel very, very happy about it. On the saffron, we've also made a lot of progress. We're inching closer to the completion of Stage 1. And that also would be something that would move faster, and we expect to see some early production of it in the latter part of 2027. On the nutrition side, we've also made a lot of progress getting really closer to the completion of Stage 1. So we really are -- Stage 1 is also the riskier part because the ability to develop and store a cell bank of stable cell culture is representing the highest risk in the process. Not the shortest time, but the highest risk in the process. And basically, what we're having is a 100% success in any molecules that we have really touched so far. That also brings lot of internal confidence. And also as we display that confidence to our customers, we expect that more of what we look at in the pipeline to converge faster. So I hope that gave you a bit of an overview of where we stand with the various projects and what we expect in the next -- especially 2026, the progress that would be further made.

Your next call comes from Matt Hewitt with Craig-Hallum Capital Group.

Congratulations on the progress last year. Maybe first up, obviously, a lot of updates on the CDMO side with your various partners there. What does the pipeline look like on that side? Is that something that you expect to continue to build? Or do you feel like now is a good time to maybe pause a little bit, focus on kind of helping and shepherd some of those programs to the commercial stage or through the manufacturing stage before you start to build on that more?

Zaki, why don't you go ahead, and I'll come in and lean in if I want add anything.

Sure. I mean, you get the answer once you analyze the financials and the guidance to understand that we are actually doing both. We continue to invest in the infrastructure. We need an infrastructure to be able to address multiple projects simultaneously. And even with the existing projects, what we found is that by improving the infrastructure we have, we can advance those projects faster which is very important in our business, improving margins, improving the execution time, getting the customer more engaged, more excited. Ultimately, customers want to see new ideas coming to fruition and getting commercialized much faster or faster cycles. And what we -- what will take place in 2026 is infrastructure, continuing to build it. Which, like I said, serves in both ability to absorb more projects, which means part of the work we expect to do in 2026 is work on the pipeline. Part of it is converging some of the projects that we have been in discussion with some of the candidates on the pipeline, and some of which is actually seeking new partners by the end of the year. So between the various activities on the existing pipeline or expanding it, that's why we guided -- in the year 2026, we provided guidance of $4 million to $6 million in revenue coming out from external customers. That would be doubling -- or actually between doubling and tripling the revenue. So that gives you an idea. And when we came up with this number, it's a mix of projects that exist today that advance mostly to Stage 2, and then new projects coming in into Stage 1, all of which are going to be taking advantage of an improved infrastructure that we started focusing on late last year, as the R&D team that was in place was mostly busy completing all tasks relative to the product side and moving, transferring its knowledge to the manufacturing organization so that they have the independence of working on the process for the manufacturing. So that's how -- what's taking place right now.

And just to add to that, Matt, that we've made a really conscious decision, a conscious decision in doubling down, leaning in, as I call it, and investing heavily in the CDMO. Because we've seen really strong results in multiple areas which unlock significant opportunities in multi -- multiple billion-dollar categories. And like now is the time to invest. And that investment, we believe that we're going to be making in 2026 and you see it based on the adjusted EBITDA guidance that we've given, is going to pay big time dividends as we move into '27 and '28 because we've got to scale the infrastructure. And there are specific areas of competitive advantage that we believe are inimitable areas of competitive advantage that we layer on to our core Botanical Synthesis technology that we are super enthusiastic and excited about and want to really build these centers of excellence so that we can increase the traffic, increase the success rate and really start to scale the CDMO. If you go back to the North Star of the company, we've always said that the direct-to-consumer business is really the validation of the power of the technology. But as we look to build this business into a multibillion dollar revenue business, it's the CDMO and the manufacturing scaling and the industrialization of plant cell biology which is going to build us to be that global leader in plant cell biology that we want to be, touching the lives of tens of millions or hundreds of millions of people ultimately. And this is the time to be courageous. And this is the time to lean in. And we're doing this, and we have full support of our Board. And Zaki -- and kudos to Zaki and his team and the R&D team that have really given us the confidence to be able to double down and know that we're going to get a really strong ROI on that investment.

Understood. And then maybe shifting gears with my second question. You noted in your prepared remarks that you've made a shift in your marketing for VINIA, specifically looking to expand into some of the younger cohorts. And I'm just curious, that started here this quarter. How long will it take for you to determine if some of those new changes are having the effect or the desired effect that you had hoped for?

Thanks. It's a great question. It's actually interesting. When you look at BloodFlow Hydration, this is kind of like the ace in our hand. Because as you saw in the chart that I shared during my prepared remarks, you see the BloodFlow Hydration has an ability to appeal to all 3 of our consumer segments or cohorts. And so we really started to see, when we look at who our consumer is, that younger consumer come in, which is being driven by BloodFlow Hydration. But also, BloodFlow Hydration is very well accepted in that older cohort. So we've got this ace that allows us to kind of bridge and an amazing product that has unique differentiation. And it's very -- well, we're finding as well, it's very simple to understand the power of BloodFlow Hydration. Because when you say to consumers very clearly without BloodFlow Hydration, there's nowhere to go. And ultimately, what we're providing are electrolytes powering cells through better blood flow delivery. And people get it. They go, oh, okay, we realize like, electrolytes is not enough. Fluid is not enough. It's how you transport those fluids and electrolytes to the entire body to be able to really go deep into yourselves. So this has given us the ability now to shift the mix out of TV. And it's not like we're stopping TV. We're just -- we're starting this migration. Hydration is our ace, our catalyst to be able to do this. We'll have more catalysts coming over the course of the next 3 to 6 months as part of our premiumization strategy. But this is a product now that -- Hydration is a product that we started to see great progress on TikTok. We just started TikTok scaling, I would say, in the last couple of weeks, and we're seeing amazing videos being actually produced by TikTok influencers because they get it. People get it. They're understanding the proposition. They understand that it's unique, and they understand it's relevant to a TikTok audience, which is a younger audience. Similarly for Facebook and Instagram, as we go after those super seekers. So my expectation is the migration is going to take us, as we start to sharpen the messaging, optimize. And as my VP of Sales, Jared says, we're tuning. We're tuning YouTube. We're tuning Facebook. We're tuning Instagram and optimizing the mix so that we're getting to the best cost of acquisition. We started to do it very significantly in the month of March. We'll continue in April. And I think by the end of the second quarter, we would have really started to be able to optimize that marketing mix powered by BloodFlow Hydration. And you'll start to see a number of other products that are going to piggyback on top of that. They're going to help us scale their business towards that younger consumer base. And importantly, at a much higher revenue per month per customer, which is what we're going after.

Your next call comes from Sean McGowan with ROTH Capital Partners.

A couple of questions here. So what can you tell us about your expectations for the phasing of revenue this year, like per quarter, especially now on the last day of the first quarter? What can you tell us how we should expect that to play out?

Yes. So I actually -- I knew you were going to ask that question, Sean. I know you pretty well by now. Okay. Look, I mean, basically, we see revenue growth in 2026 being nonlinear to -- in order to achieve the guidance. And for us, Q1 is a critical quarter to make the required changes in the mix in line with our 2 lens model. And therefore, we see Q1 having more moderate growth versus previous year. And then we start to really accelerate the growth as we unlock the benefits of the incremental investments and capabilities that we're building, both on the direct-to-consumer business and on the CDMO business. And so Q2 and beyond, we're really -- you'll start to see a bit of a multiplier effect as a result of the actions that we took in Q1. And so you can kind of start to see how that build goes from Q1 to Q2 to Q3 and Q4. And again, it's not going to be totally linear. You'll start to get a bit of a multiplier effect as you go into the second half of the year. Also, when you layer on the additional activity -- I talked about the premiumization strategy that we're bringing to market, and we're going to start to share more of that over the next, let's call it, 90 days. And once you start to understand the premiumization strategy, you'll start to see how the second half has significant activity in it. And that activity also is going to help to drive that multiplier effect as we move into Q3 and Q4 with a really, really strong end of the year.

That's very helpful. A couple of other questions on guidance. What can you tell us about your expectations for the gross margins in each of the segments compared to last year?

Yes. Look, I think what we're going to see -- I'll talk about the direct-to-consumer side of the business. From the direct-to-consumer side of the business, we're also investing heavily on the manufacturing side. We're investing heavily in manufacturing efficiencies. Always, Q4 and Q1 is a little bit more challenging because you've got seasonality challenges there, higher transportation costs. But my expectation is -- similar to what I shared on revenue, you'll start to see basically, gross profit margins continue to get better through the year with the benefits of scale, with the benefit of process optimization that we're driving. This will be a little bit more linear as opposed to the revenue. But we -- you're anchoring now, 59%, 60%, and we'll start to see that move up let's call it, 0.5 point each -- 0.5 point to 1 point each quarter as we try and move up to the 64%, 65% mark as an aspiration. But obviously, we're modeling and trying to be a little bit more conservative as we look to under promise and overdeliver. And then obviously, on the CDMO, you have a little bit more lumpiness just given the nature of deals and getting deals signed at the end of quarters, beginning of quarters. I think the CDMO is a little bit more challenging to predict. But definitely, as Zaki said, we see a lot of deals moving from Q1 into -- sorry, from Stage 1 into Stage 2. And that's going to be ultimately happening in second quarter and third quarter. So you'll start to see the benefits of that, plus new deals dropping basically in the second and third quarters. And the pipeline is looking really good. And each time we make announcements like we made today on breakthrough capabilities, I mean, I just -- it's very hard for, I guess, the investor community to understand the magnitude of the breakthrough of the R&D team with what they've been able to do with these unique molecules, the sesquiterpenes plus the chromones. It's a major, major breakthrough. And what this does is it starts to now unlock many other opportunities which can really derive significant demand from the marketplace. So bottom line is you'll start to see on the CDMO, those benefits coming through, but it will continue to build in Q2, Q3 and Q4.

Okay. And then to dovetail on that comment about investments in CDMO, I would assume that you would like us to infer that these investments being made that result in the EBITDA losses are a sign of optimism for the future and not a problem, right?

100%. And as I said before, it's a conscious decision that we're making. And you'll see it just when you look at -- and we'll talk about it more when we do our one-on-ones, and look at the modeling from an R&D expense. I mean, these are expenses that are going in to build capability in critical areas that we have seen already, the ability to win in, and we want to double down, build centers of excellence. And we know that these different centers of excellence, whether it's in AI, whether it's in process engineering on the manufacturing side, whether it's in computer vision that we'll be talking more about, which we think is a real breakthrough for us. Or a center of excellence that we're building in elicitation methods, which is such a critical part of our business. These are anchor, anchor capabilities that really help build a moat, a further moat, I should say, around Botanical Synthesis technology. And ultimately, we feel like now is the time we -- the team has done enough in the last 6 months to show us the potential of what we can do and the optionality that we can build for this business and for our investors. And now is that time to double down and to seize the opportunity. The investor community will see the benefits from this over the next 90 days, 180 days and beyond because there's a lot going on.

Your next question comes from the line of Susan Anderson with Canaccord Genuity.

I was curious, I guess, as you continue to roll out new products, how should we think about your marketing expenses as a person to sell, particularly as you move on TikTok and other social media platforms. I guess, should we expect it to grow? Or should we expect it to continue to be similar to what we saw this year?

So when you look at specifically on the direct-to-consumer business, Susan, we've been looking at like basically total sales and marketing, around about 46%, 47%. We should see similar levels. It should -- there should be some efficiency coming quarter-on-quarter. Importantly, those efficiencies are going to come from basically mix. And for example, the Health Pros that we talked about a little bit earlier on the call really helps drive that mix because it's a very, very efficient way to be able to acquire customers. And we've seen that now. We've spent 12 months building the infrastructure, the capabilities, the end-to-end computerized -- the whole digitized system from onboarding a Health Pro, all the way to paying them their commissions each month, educating them. And we see it in this month of March, literally 10% of our incremental customer base came from Health Pros. And those Health Pros are going to scale as we bring in more and more mega Health Pros in their communities. And so as we navigate and we drive a better mix through the different channels like Health Pros, that starts to drive greater marketing efficiencies and will plow the majority of those efficiencies back into investing in marketing to continue to grow the business. Because that's what our 2 lens model is telling us to do, keep on growing the business, get to scale, increase the adjusted EBITDA. This year is a start, getting into positive adjusted EBITDA territory and then to continue to grow that. But there will be efficiency benefits. It's not going to be drastic, but they will be sharpening of the pencil, efficiency benefits that we can use to drive more leverage to the bottom line.

Okay. Great. And then I guess on a fragrance front, it sounds like the timing of a potential product is like 12 to 8 months out, per the release, I guess. So should we think about that as like late '27, early '28? And I guess the same thing with Saffron. And then, I guess, in between that, think about continued VINIA rollout, such as the hydration and other products and then also new CDMO products?

Correct. So when you think about catalysts, firstly, on the manufacturing perspective, with the specific fragrance that we've talked about, plus Saffron, and just as Zaki articulated, the amount of progress the team have made in a short period of time. Basically, second half of '27 is realistic to actually start manufacturing and starting to move the revenue, getting into really the scaling and the major revenue component. As we start to look at VINIA, the [ premiumization ] strategy, we will start to share more detail. And yes, there are a number of big bets that we're making, going after major multibillion-dollar categories with uniquely differentiated propositions, anchoring in the fact that we have the best nutrient delivery system in the world because of our ability to increase arterial dilation and basically, that being the blood flow carrier of each of those nutrients to be able to actually perform better in the body. And so as we selectively and surgically go after these categories in a way that drives premiumization for our business, you'll start to see a very clear growth strategy that can really take us from a business today that's looking, as we've discussed, 38 -- basically moving from $38 million to $42 million on the D2C business, but really driving exponential growth as we go into 2027 because of the breadth of product line that we bring into the market across multiple categories.

There are no further questions at this time. I will now turn the call back to Ilan Sobel, CEO of BioHarvest Sciences, for closing remarks.

Thank you, Kara, and thank you, everybody, for joining us today and for your continued support. I hope you feel after the discussion that we've had and the significant progress that we've demonstrated that we're entering 2026 with great momentum with focus and a very well articulated strategy that we know how to execute and operationalize in order to drive growth across both of our business units. And we look forward to continuing to create value for our shareholders in the quarters ahead. And I'd like to wish everybody a happy Passover and a happy Easter over the next couple of weeks, and safe travels.

That concludes today's call. Thank you for attending, and you may now disconnect.