BioHarvest Sciences, Inc. Q3 FY2024 earnings call

Company Overview: BioHarvest Sciences is a biotech using Botanical Synthesis to produce plant-based molecules for nutraceutical, cosmetic, pharma, and nutrition solutions. ### Third Quarter Performance: Revenues grew 101% to $6.5M, gross margin reached 57% (1,200 basis point increase) due to manufacturing scale, yield improvements, and cost reductions. Digitization of manufacturing metrics optimized production. ### Growth Model 2025: Balance growth with profitability, targeting adjusted EBITDA profitability at $11-$12M per quarter in the second half of 2025. Focus on three areas: expanding direct-to-consumer product portfolio, R&D for Botanical Synthesis 2.0, and AI for CDMO customers. ### Product Launches: VINIA SuperFood Tea launched, VINIA SuperFood Coffee performing well, with plans for VINIA Pro lineup (chews, hydration solution) targeting active consumers. ### CDMO Division: Offers contract services to industry partners, with signed customers and a pipeline of deals north of $10M in 2025, leveraging Botanical Synthesis advantages.

In the third quarter of 2024, revenues grew 101% year-over-year to $6.5 million, driven by strong VINIA sales. Gross profit increased 157% to $3.7 million (57% of total revenues), a result of increased manufacturing scale, improved yields, and downstream cost reductions. The CDMO division is a growing segment with signed customers and a pipeline of prospective deals. VINIA contributed the majority of revenues, with the product division commercializing VINIA, a red grape-derived nutraceutical, and the CDMO division offering contract development and manufacturing services.

Fourth Quarter 2024: Expected revenues of at least $7.2 million. ### 2025 Targets: Aim for adjusted EBITDA profitability at $11-$12M per quarter in the second half of 2025. CDMO bookings expected north of $10M in 2025, with potential for higher figures in subsequent years.

Risks: Forward-looking statements subject to uncertainties. Air freight expenses and delays in cost-saving measures impacted Q3 margins. Dependence on regulatory approvals for international expansion (e.g., Canada, Asia, Europe) and potential challenges in clinical trial alignments.

Q: What's the strategy to continue increasing retention rates for VINIA?

A: Focus on subscription design, website/user experience, multiple delivery mechanisms (SuperFood Coffee, teas), education on product efficacy and technology, providing multiple entry points for consumers.

Q: What are the long-term goals for the CDMO division?

A: Significant progress in CDMO, with a pipeline of deals north of $10M in 2025, moving from stage 1 to stage 2 in CDMO projects, and building infrastructure including robotics.

Q: What initial uplift in revenue is expected for the hydration project and its distribution?

A: Targets active sporty consumers, plans for clinical trials, distribution in direct-to-consumer and strategic channels (gym-related), premiumizing the product with superior science and efficacy.

Q: How important is international expansion for the company?

A: Health Canada approval already obtained, plans for international shipping to increase revenue by 5-7%, with clinical trials designed to align with key markets (Europe, Japan) for future expansion.

Q: What are the CDMO booking expectations?

A: Targeting bookings north of $20M in the next 12-18 months, with capacity planning for factories in the US to support future growth.