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…

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…

[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…

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.