BioHarvest Sciences Inc(BHST) - 2025 Q2 - Quarterly Report

FINANCIAL STATEMENTS Unaudited Interim Condensed Consolidated Statements of Financial Position BioHarvest Sciences Inc.'s financial position as of June 30, 2025, shows increased assets and liabilities, with shareholders' equity shifting to a deficit | Metric | As at June 30, 2025 ($ thousands) | As at December 31, 2024 ($ thousands) | Change ($ thousands) | % Change | | :---------------------------------- | :--------------------------------- | :----------------------------------- | :------------------- | :------- | | Total assets | 27,798 | 25,001 | 2,797 | 11.19% | | Total liabilities | 32,021 | 23,671 | 8,350 | 35.27% | | Total Shareholders' equity (deficit) | (4,223) | 1,330 | (5,553) | -417.52% | | Current Assets Category | As at June 30, 2025 ($ thousands) | As at December 31, 2024 ($ thousands) | Change ($ thousands) | % Change | | :------------------------ | :--------------------------------- | :----------------------------------- | :------------------- | :------- | | Cash and cash equivalents | 3,727 | 2,390 | 1,337 | 55.94% | | Trade accounts receivable | 1,614 | 1,116 | 498 | 44.62% | | Other accounts receivable | 858 | 695 | 163 | 23.45% | | Inventory | 4,127 | 3,655 | 472 | 12.91% | | Total current assets | 10,326 | 7,856 | 2,470 | 31.44% | | Current Liabilities Category | As at June 30, 2025 ($ thousands) | As at December 31, 2024 ($ thousands) | Change ($ thousands) | % Change | | :--------------------------- | :--------------------------------- | :----------------------------------- | :------------------- | :------- | | Trade accounts payable | 3,421 | 3,525 | (104) | -2.95% | | Other accounts payable | 4,503 | 3,609 | 894 | 24.77% | | Deferred revenue | 990 | 906 | 84 | 9.27% | | Lease liabilities | 1,454 | 772 | 682 | 88.34% | | Loans | 4,722 | 3,905 | 817 | 20.92% | | Liability for Agricultural Research Organization | 1,552 | 1,140 | 412 | 36.14% | | Accrued liabilities | 463 | 401 | 62 | 15.46% | | Total current liabilities | 17,105 | 14,258 | 2,847 | 19.97% | Unaudited Interim Condensed Consolidated Statements of Loss and Other Comprehensive Loss For H1 2025, BioHarvest Sciences Inc. reported a net loss of $6,418 thousand, an improvement from prior year, driven by revenue growth | Metric | Three-months ended June 30, 2025 ($ thousands) | Three-months ended June 30, 2024 ($ thousands) | Six-months ended June 30, 2025 ($ thousands) | Six-months ended June 30, 2024 ($ thousands) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Revenues | 8,515 | 6,027 | 16,375 | 11,371 | | Cost of revenues | 3,429 | 2,925 | 6,694 | 5,266 | | Gross profit | 5,086 | 3,102 | 9,681 | 6,105 | | Total operating expenses | (6,901) | (4,878) | (13,215) | (9,305) | | Operating loss | (1,815) | (1,776) | (3,534) | (3,200) | | Finance expenses (income) | 2,226 | 378 (1,467 income) | 2,807 (49 income) | 4,117 | | Net loss and comprehensive loss | (4,080) | (687) | (6,418) | (7,268) | | Basic and diluted loss per share | (0.24) | (0.04) | (0.37) | (0.48) | - Revenue increased by 44.01% to $16,375 thousand for the six months ended June 30, 2025, compared to $11,371 thousand in the prior year period[6] - Gross profit increased by 58.58% to $9,681 thousand for the six months ended June 30, 2025, from $6,105 thousand in the prior year period[6] Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit) Shareholders' equity shifted from positive to a $(4,223) thousand deficit by June 30, 2025, primarily due to comprehensive loss | Metric | As at December 31, 2024 ($ thousands) | Six-month period ended June 30, 2025 ($ thousands) | As at June 30, 2025 ($ thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------------------- | :-------------------------------- | | Balance, December 31, 2024 | 1,330 | - | - | | Share based compensation | - | 316 | - | | Warrants extension | - | 549 | - | | Comprehensive loss for the period | - | (6,418) | - | | Balance, June 30, 2025 | - | - | (4,223) | - The Company's shareholders' equity decreased by $5,553 thousand, moving from a positive balance of $1,330 thousand at December 31, 2024, to a deficit of $(4,223) thousand at June 30, 2025[7] - A 35-for-1 share consolidation was approved by shareholders on May 27, 2024, and became effective on June 3, 2024[35] Unaudited Interim Condensed Consolidated Statements of Cash Flows For H1 2025, BioHarvest Sciences Inc. saw a net cash increase of $1,353 thousand, driven by financing offsetting operating and investing uses | Cash Flow Activity | Six-months ended June 30, 2025 ($ thousands) | Six-months ended June 30, 2024 ($ thousands) | YoY Change ($ thousands) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | :----------------------- | | Net cash used in operating activities | (2,883) | (2,536) | (347) | | Net cash used in investing activities | (1,272) | (2,155) | 883 | | Net cash provided by financing activities | 5,508 | 4,490 | 1,018 | | Increase (Decrease) in cash and cash equivalents | 1,353 | (201) | 1,554 | | Cash and cash equivalents at the end of the period | 3,727 | 5,168 | (1,441) | - Cash used in operating activities increased by $347 thousand, from $2,536 thousand in 2024 to $2,883 thousand in 2025[10] - Cash provided by financing activities increased by $1,018 thousand, from $4,490 thousand in 2024 to $5,508 thousand in 2025, primarily due to proceeds from loans[10] NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - GENERAL This note details BioHarvest Sciences Inc.'s operations, technology, business units, going concern status, and war impact Description of the Company and its operations BioHarvest Sciences Inc. is a Canadian biotech company, listed on Nasdaq, using its Botanical Synthesis Platform for products and CDMO - BioHarvest Sciences Inc. was incorporated on April 19, 2013, in British Columbia, Canada, and is publicly listed on Nasdaq (BHST) and various German stock exchanges (8MV0)[11][13] - The Company utilizes its proprietary Botanical Synthesis Platform Technology to grow active ingredients from plants at an industrial scale, offering high concentrations, solubility, and bioavailability without genetic modification or environmental impacts of traditional agriculture[16] - BioHarvest Sciences operates two business units: the Products Business Unit (Nutraceuticals and Cosmeceuticals) and the CDMO Services Business Unit (Contract Development and Manufacturing Operations for plant-based active molecules)[17][24] Going concern Accumulated deficit and negative operating cash flows raise substantial doubt about the Company's going concern ability - The Company has an accumulated deficit of $102,836 thousand as of June 30, 2025, and generated negative cash flows from operating activities of $2,883 thousand for the six-month period, raising substantial doubt about its ability to continue as a going concern[18] - Management plans to fund near-term activities through capital fundraising, debt instruments (convertible, short-term, and long-term loans), and future revenues[19] War in Israel Company operations in Israel face geopolitical risks, with no material impact reported to date - The Company's principal operations and most key employees are located in Israel, which has experienced ongoing conflicts, including war with Hamas, Hezbollah, and recent hostilities with Iran[20][21][22][23] - As of the issuance date of these financial statements, these events have had no material impact on the Company's operations[23] NOTE 2 - BASIS OF PREPARATION Interim financial statements adhere to IFRS and IAS 34, consistently applying prior annual policies, with no material impact from new IAS 21 - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards) and IAS 34 Interim Financial Reporting[25] - The significant accounting policies applied in the annual financial statements as of December 31, 2024, are applied consistently in these interim statements[26] New IFRSs adopted in the period Amendments to IAS 21 on exchangeability were adopted, with no material effect on financial statements - The Company adopted amendments to IAS 21, "The Effects of Changes in Foreign Exchange Rates" (Lack of Exchangeability), effective January 1, 2025, which introduce requirements for assessing currency exchangeability and estimating spot exchange rates[27][28] - These amendments have had no material effect on the unaudited interim condensed consolidated financial statements[28] NOTE 3 - LEASES The Company leases Israeli facilities and equipment, recognizing right-of-use assets and liabilities, with recent extensions for Yavne and Rehovot - The Company leases facilities in Israel (Rehovot and Yavne) and certain property and equipment, with all leases accounted for by recognizing a right-of-use asset and a lease liability, except for low-value assets or leases of 12 months or less[29][31] - On January 16, 2025, the Yavne manufacturing facility lease was amended until September 2025, with two 6-month extension options that the Company believes will be exercised[29][30] - On June 1, 2025, the Rehovot laboratories and offices lease was amended until May 2028, with an option for partial or complete early termination, which the Company believes is probable[32][33] NOTE 4 - SHARE CAPITAL As of June 30, 2025, BioHarvest Sciences Inc. had 17,333,430 common shares outstanding, reflecting RSU issuances, warrant extensions, and a 35-for-1 consolidation | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Common shares issued and outstanding | 17,333,430 | 17,327,716 | - On June 10, 2025, the Company issued 5,714 common shares in lieu of vested RSUs[34] - The Company extended the expiry dates of 493,239 Early Conversion Warrants and 257,143 Major Investor Warrants on April 11, 2025, and 9,794 Early Conversion Warrants on June 3, 2025, by an additional 24 months in connection with new loan facilities[35] | Warrants Outstanding (June 30, 2025) | Exercise Price | Expiry Date | | :----------------------------------- | :------------- | :---------- | | 261,031 | $7.77 | October 30, 2025 | | 257,143 | $7.77 | October 30, 2027 | | 150,978 | $11.52 | December 28, 2025 | | 724,904 | $7.77 | October 30, 2025 | | 453,597 | $7.77 | October 30, 2027 | | 131,279 | $7.77 | December 22, 2025 | | 49,436 | $7.77 | December 22, 2027 | | Total | 2,028,368 | | NOTE 5 - SHARE BASED COMPENSATION For H1 2025, BioHarvest Sciences Inc. recognized $316 thousand in equity-settled share-based compensation, with options decreasing and some warrant expiry dates extended | Metric | Six months ended June 30, 2025 ($ thousands) | Six months ended June 30, 2024 ($ thousands) | | :-------------------------- | :------------------------------------------- | :------------------------------------------- | | Equity settled compensation | 316 | 328 | | Options Activity | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Options outstanding at beginning of period | 1,902,090 | 1,807,456 | | Forfeited | (16,310) | (14,119) | | Options outstanding at the end of the period | 1,885,780 | 1,902,090 | | Weighted Average Exercise Price (end of period) | $6.33 | $6.30 | | Weighted-average contractual life (end of period) | 6.03 years | 6.80 years (June 30, 2024) | - On April 11, 2025, the expiry date of 64,986 warrants, accounted for as share-based compensation, was extended by an additional 24 months in connection with new loan facilities[40] NOTE 6 - LOANS BioHarvest Sciences Inc. has various loan facilities, including short-term loans, Convertible Loan A, and new investor notes, totaling $1,677 thousand and $3,925 thousand respectively, plus $1,733 thousand for unclosed facilities | Loan Category | As at June 30, 2025 ($ thousands) | As at December 31, 2024 ($ thousands) | | :-------------------- | :--------------------------------- | :----------------------------------- | | Current loans | 4,722 | 3,905 | | Non-current loans | 5,262 | - | | Total Loans | 9,984 | 3,905 | Short-term loans The Company secured $1,677 thousand in 12-month short-term loans from private investors, bearing 16% or 20% annual interest - During the six months ended June 30, 2025, the Company borrowed $1,677 thousand in short-term loans from private investors[41] - These loans bear annual interest rates of 16% (monthly payments) or 20% (payment at term end) and have a 12-month term[41][45] | Metric | Six-month period ended June 30, 2025 ($ thousands) | | :------------------------------------ | :------------------------------------------------- | | Proceeds from drawing loans | 1,677 | | Accrued interest recognized in Profit or loss | 420 | | Repayment of principal and interest | (1,305) | | Balance as of June 30, 2025 | 4,166 | Unconverted portion of Convertible loan A An unconverted portion of Convertible Loan A, totaling $556 thousand, is immediately due and accrues 9% annual interest - As of June 30, 2025, an unconverted portion of Convertible Loan A, totaling $556 thousand (including principal and accrued interest), was due for immediate payment[43] - The Company accrues 9% annual interest on the due amount until it is fully repaid, and lenders can demand immediate payment at any time[42] Returning investor notes The Company received $3,925 thousand from new returning investor notes with varying interest rates and extended warrant expiry dates - During the six months ended June 30, 2025, the Company received $3,925 thousand from new loan facilities (returning investor notes), bearing interest rates of 5%, 10%, and 12% per annum over a 24-month term[46][47] - As additional compensation, the Company extended the expiry dates of 503,033 Early Conversion Warrants, 257,143 Major Investor Warrants, and 64,986 warrants held by lenders for an additional 24 months[48] | Metric | Six-month period ended June 30, 2025 ($ thousands) | | :------------------------------------ | :------------------------------------------------- | | Proceeds from drawing loans | 3,925 | | Recognition of debt discount | (549) | | Amortization of debt discount | 59 | | Accrued interest recognized in Profit or loss | 90 | | Balance as of June 30, 2025 | 3,501 | Funds received for new loan facilities that were not yet closed The Company received $1,733 thousand for a new convertible loan facility, bearing 8% annual interest, with conversion options after 12 months - During the six months ended June 30, 2025, the Company received $1,733 thousand for a new convertible loan facility that had not yet closed[54][55] - This facility will bear 8% annual interest over a 36-month term, with lenders having the option to convert into common shares after 12 months at a discounted market price, subject to floor and ceiling prices[52][55] | Metric | Six-month period ended June 30, 2025 ($ thousands) | | :------------------------------------ | :------------------------------------------------- | | Proceeds from drawing loans | 1,733 | | Accrued interest recognized in Profit or loss | 28 | | Balance as of June 30, 2025 | 1,761 | NOTE 7 - RELATED PARTIES TRANSACTIONS This note details transactions and balances with related parties, including key management, showing increased management fees and accrued interest for H1 2025 - Related parties include the Company's CEO, CFO, Chairman of the Board, and Directors[56] | Compensation of Key Management Personnel (Six months ended June 30) | 2025 ($ thousands) | 2024 ($ thousands) | YoY Change ($ thousands) | YoY % Change | | :------------------------------------------------ | :----------------- | :----------------- | :----------------------- | :----------- | | CEO Management fees | 402 | 204 | 198 | 97.06% | | Chairman of the Board Management fees | 314 | 231 | 83 | 35.93% | | CFO Management fees | 103 | 15 | 88 | 586.67% | | Directors Management fees | 107 | - | 107 | N/A | | Share based compensation to CFO | 3 | - | 3 | N/A | | Related Party Balances (As of June 30) | 2025 ($ thousands) | 2024 ($ thousands) | | :----------------------------------- | :----------------- | :----------------- | | Due to the CEO | 258 | 29 | | Due to the Chairman of the Board | 741 | - | | Due to the CFO | 259 | - | NOTE 8 - OPERATING SEGMENTS BioHarvest Sciences Inc. operates two segments: Products (nutraceuticals/cosmeceuticals) and CDMO Services, with Products generating significantly higher revenue and North America as the dominant market Segment description The Company operates two distinct segments: Products (nutraceuticals/cosmeceuticals) and CDMO Services - The Company has two operating segments: the Products business unit (focused on nutraceuticals and cosmeceuticals) and the CDMO Services business unit (offering contract development and manufacturing for plant-based active molecules)[63][68] Segment information Segmental data for H1 2025 and 2024 details revenues, cost of revenues, R&D, and segment loss for Products and CDMO Services | Metric (Six months ended June 30, 2025) | Products ($ thousands) | CDMO Services ($ thousands) | Total ($ thousands) | | :-------------------------------------- | :--------------------- | :-------------------------- | :------------------ | | Revenues | 15,741 | 634 | 16,375 | | Cost of revenues | 6,439 | 255 | 6,694 | | Research and development | 1,891 | 691 | 2,582 | | Segment loss | 2,973 | 561 | 3,534 | | Metric (Six months ended June 30, 2024) | Products ($ thousands) | CDMO Services ($ thousands) | Total ($ thousands) | | :-------------------------------------- | :--------------------- | :-------------------------- | :------------------ | | Revenues | 11,221 | 150 | 11,371 | | Cost of revenues | 5,159 | 107 | 5,266 | | Research and development | 1,824 | 298 | 2,122 | | Segment loss | 2,724 | 476 | 3,200 | Entity wide disclosures Geographical revenue breakdown shows North America as the primary market, with significant growth in both Israel and North America | External Revenue by Location (Six months ended June 30) | 2025 ($ thousands) | 2024 ($ thousands) | YoY Change ($ thousands) | YoY % Change | | :-------------------------------------- | :----------------- | :----------------- | :----------------------- | :----------- | | Israel | 1,603 | 1,059 | 544 | 51.37% | | North America | 14,772 | 10,312 | 4,460 | 43.25% | | Total | 16,375 | 11,371 | 5,004 | 44.01% | Additional information about revenue No single customer accounted for 10% or more of total revenue for the periods ended June 30, 2025 and 2024 - There is no single customer for which revenue amounts to 10% or more of total revenue for the three and six months ended June 30, 2025, and 2024[71] NOTE 9 - SUBSEQUENT EVENTS Subsequent to June 30, 2025, BioHarvest Sciences Inc. received an additional $750 thousand for a new convertible loan facility - After June 30, 2025, the Company received an additional $750 thousand as part of a new convertible loan facility[72]