BHST

• Strategic Milestone Update

  • Secured the company's first ever CDMO manufacturing and supply agreement for a rare premium fragrance ingredient with a UAE-based customer, ahead of the prior outlined schedule. The 20-ton delivery commitment is projected to generate $20 million to $30 million in revenue for BioHarvest across 2027-2028, with limited production starting in H1 2027. BioHarvest holds exclusive manufacturing rights for the initial 2027-2028 term, and management projects long-term revenue of $180 million for the first five years of production.
  • Completed stage one of a multistage saffron development agreement for nutraceutical and culinary applications, triggering advancement to a $1.125 million stage two focused on scaling bioreactor production. BioHarvest retains 25% ownership of the developed saffron composition in addition to future manufacturing rights.
  • Expanded the existing joint development collaboration with strategic partner Tate & Lyle to cover multiple plant-based sweetener molecules, up from the original single compound scope.

• Strategic Priorities (Next 12-18 Months)

  • Shift core focus from proving platform application breadth to monetizing already developed/advanced-stage molecules, converting high-value opportunities into recurring manufacturing revenue, royalties, and driving toward profitability.
  • Continue growing the direct-to-consumer VINIA business for healthy, profitable expansion.
  • Prioritize careful cash management to avoid the need for additional equity-based funding.
  • Target consolidated EBITDA breakeven in 2027.

• Operational Updates

  • Received a $1.4 million non-dilutive grant from the Israel Innovation Authority (the second IIA grant awarded in 2026) to integrate machine learning, data science, and digital sensing into plant cell culture development workflows, with the long-term goal of building the world's largest cell bank for valuable and endangered plant species.
  • For VINIA, implemented a 20% price increase for new subscription customers starting from their second order (first price change since 2021) with no material negative impact observed to date. The company is shifting brand messaging to improve conversion and lower customer acquisition costs, and will launch a new single-dose product format in September 2026 to improve conversion among younger consumers and deepen retention.
  • The health professional affiliate channel continues to grow, and a new strategy targeting fitness and recreational clubs is being rolled out to drive future growth at lower acquisition costs.

• Full-year 2026 total consolidated revenue guidance is revised to $37 million to $40 million, down from the prior guidance of $42 million to $48 million.
• Full-year 2026 consolidated EBITDA loss is projected to be $3 million to $5 million, compared to the prior expected loss range of $3 million to $4 million. The narrower loss projection reflects improved CDMO profitability that offsets product business downward revisions.
• CDMO 2026 revenue guidance is tightened to $4 million to $5 million from the prior $4 million to $6 million range, with full-year EBITDA loss guidance significantly reduced to $1.5 million to $2.5 million from the prior $4 million to $5 million range.
• VINIA D2C 2026 revenue guidance is revised to $33 million to $35 million from the prior $38 million to $42 million range, with EBITDA guidance revised to a loss of $1.5 million to $2.5 million from a prior projected gain of $0.5 million to $2 million.
• Management reaffirms its target of achieving consolidated EBITDA breakeven in 2027.

For Q2 2026 (all figures in USD):

1. CDMO Services Business Unit: Revenue for full-year 2026 is guided to $4 million to $5 million, down from the prior $4 million to $6 million range. Full-year EBITDA loss is projected to be $1.5 million to $2.5 million, a significant reduction from the prior $4 million to $5 million expected loss. This shift reflects a strategic focus on high-value projects rather than pursuing a larger volume of lower-value opportunities.

2. Products Business Unit (led by the VINIA direct-to-consumer business): Full-year 2026 revenue guidance is revised to $33 million to $35 million, down from the prior $38 million to $42 million range. Full-year EBITDA is now projected to be a loss of $1.5 million to $2.5 million, compared to prior guidance of a $0.5 million to $2 million gain. The underlying D2C business remains stable, holding approximately 95,000 active customers with 2% year-over-year and 2% quarter-over-quarter growth as of Q2 2026.

• Direct-to-consumer VINIA business faces double-digit media cost inflation on platforms like Meta, driven by increased advertiser competition for the same target audience, which pressures customer acquisition costs and profitability if unaddressed.
• Large-scale commercial manufacturing for the new fragrance contract is dependent on staged capacity expansion, and limited existing capacity restricts near-term revenue generation from the agreement.
• Some contract terms (including royalty structures for the fragrance agreement) are still under negotiation, creating uncertainty around the final margin and revenue structure for the partnership.
• Relying on internally generated cash to fund capacity expansion creates execution risk if manufacturing ramp or revenue growth does not meet projected timelines.

Q: Analyst Matt Hewitt asked whether fragrance production can start during stage two of saffron development (expected to complete end of 2026) or must wait for completion, and when revenue will be recognized from the fragrance contract. / A: Rakib explained that after the low-risk stage one completion, BioHarvest will begin commercial production for the fragrance in smaller bioreactors while stage two is ongoing, rather than waiting for full stage completion. Revenue will be recognized starting in H1 2027, with scaling to larger bioreactors in mid-2027 and most 20-ton production occurring in 2028 at the new expanding facility. Hewitt followed up asking about retail expansion for VINIA, and Rakib confirmed retail discussions are ongoing in the U.S. and internationally and are not a competing priority with CDMO growth. Total length is under 2000 characters.

Q: Analyst Sean McGowan asked why CDMO revenue guidance was tightened despite the new large fragrance contract, and what the strategy shift means for the company's other developed plant products like pomegranate and olives. / A: Rakib clarified that the tightened revenue range is a deliberate resource allocation choice: management is focusing on high-value opportunities like the fragrance contract rather than chasing a higher volume of lower-value projects. For other developed plant products, the company will no longer launch new consumer products itself beyond VINIA; instead, all existing developed plant molecules will be offered as ready assets to CDMO customers to speed up time to manufacturing and revenue. Total length is under 2000 characters.

Q: Analyst Sameer Joshi asked whether the fragrance customer or product name can be disclosed, and whether the contract can be extended beyond 2028. / A: Rakib confirmed that a non-disclosure agreement prohibits disclosing the customer and product name at this time, as the parties have agreed to keep the program in stealth mode ahead of market launch. He noted that BioHarvest is the exclusive manufacturer for the 2027-2028 term, and due to the unique nature of the technology, it is highly likely the contract will be extended for multiple years beyond 2028; management still stands by its long-term projection of $180 million in revenue over the first five years of production. Total length is under 2000 characters.

Q: Analyst Nicholas Sherwood asked what payment structure to expect for the fragrance contract, and how the expanded Tate & Lyle collaboration will likely develop. / A: Rakib explained that royalty terms are still under negotiation, and BioHarvest holds a 20% ownership stake in the fragrance business that will factor into overall returns; even without finalized royalties, the high margin of the product delivers healthy profitability. For the Tate & Lyle sweetener collaboration, the long-term plan is for Tate & Lyle to build its own large-volume U.S. manufacturing facility, with BioHarvest licensing technology and collecting royalties, which avoids capex requirements for BioHarvest aligning with its cash preservation strategy. Total length is under 2000 characters.