BioHarvest Sciences Inc. (CNVCF) Q2 Marketing and Performance Update Call Transcript

BioHarvest Sciences Inc. (OTCQB:CNVCF) Q2 Marketing and Performance Update Conference Call June 22, 2023 2:00 PM ET

Company Participants

Justin Meiklem – Investor Relations

Ilan Sobel – Chief Executive Officer

Brian Cornblatt – Chief Medical Officer

Conference Call Participants

Justin Meiklem

So welcome to the Q2 Marketing and Performance update. Ilan is on screen. Our CEO, Ilan Sobel will be hosting today’s meeting. And just a few things, it is being recorded, and we will share it later this evening on social media and email. Also we will have a question-and-answer session at the end. We’ll try to get as many questions as possible. If we don’t cover all of your questions, you can email me [email protected] and we will give you a satisfactory response ASAP. And then also Chief Medical Officer, Brian Cornblatt is on the call. We’re probably just on audio. Brian is actually traveling to Toronto for the big collision concert — conference next week. So if you’re in Toronto and you’d like to meet, I’ll be there as well. And Ilan is traveling to London, England next week to speak at a big nutraceutical conference.

Ilan Sobel

Justin, it’s underwhelming not seeing you.

Justin Meiklem

It’s good. It’s a break for everybody. Hopefully when you speak Ilan, you’re going to go to full screen here when you present.

Ilan Sobel

Yeah, I haven’t. I will share. Yeah. Let’s try. Let me see. Let’s just do that. We’re going to start in two minutes. Justin, we’ve got 53 participants. I think we should wait a couple more minutes. Let me just check this screen. Sharing is working. Okay. And just tell me, Justin, how does that work? Does that look good?

Justin Meiklem

Perfect.

Ilan Sobel

All right. Great. Okay.

Justin Meiklem

Yeah. And people you can put in sorry, people, everyone. You can start answering your questions at any time and I’ll be summarizing them throughout the call.

Ilan Sobel

Justin I say we start right as we get to 9:05. So another like 75 seconds. All right.

Justin Meiklem

Sounds great. Ilan, maybe share your screen so people can see. As they come in that they’re in the right spot.

Ilan Sobel

Me a second. Okay. That’s great. Okay. I reckon we rock and roll. Justin?

Justin Meiklem

Yeah, absolutely. Everyone, thank you. Brian and I are actually off screen for this, but welcome to the Q2 Marketing and Performance update. I’m your behind the scenes host, Justin Meiklem and today’s session is going to be hosted by our CEO, Ilan Sobel. Good evening, Ilan.

Ilan Sobel

Good evening, everybody. Looking forward to this update today.

Justin Meiklem

Yeah, very exciting times. We also do have Dr. Brian Cornblatt on the call. He’s going to be here for the question and answer session. And again, for everybody, you can start submitting questions at any point. If we don’t answer your question to your satisfaction, just email [email protected] and I can get you a more detailed response afterwards.

We are recording and so if you want to share this or review it later this evening, it should be ready and shared on social media and email by tonight. So without further ado, I’m very excited to introduce our globe-trotting CEO, Ilan Sobel.

Ilan Sobel

Thank you, Justin, and hello to everybody. I’m really looking forward to tonight’s discussion. We’ve got a lot of, I think, really exciting news to share with everybody off the back of the announcement that we made yesterday.

And also after a very successful seven, eight days in the US that I had with critical meetings with partners and a lot of product development work that we were able to complete very successfully. Tonight’s presentation, we’re going to, you know, as always, just need you to look at the forward-looking statements and just have a quick read through that please. You all can read much faster than I can talk.

And with that, we’ll commence. So basically, we’re going to just very quickly just ground everybody recap on our strategy. I’ll then spend a little bit of time on the Q1 performance update, and then I’m going to spend most of the discussion on the — a number of the major actions that we are taking to move the company to scale and ultimately profitability, which is our major focus.

And then we’ll have some time for Q&A. Okay. So let’s first start with the recap on strategy. Look, what’s really exciting, and I see this more and more as I’m engaging with the outside world, with investors, with a number of bankers as well, investment bankers. We as a company and what we are doing, all of us together with our shareholder partners, we really at the cutting-edge intersection of three of the largest trends that are taking the world by storm.

Clearly, health and wellness, specifically following post-COVID, the power of biotechnology, and then obviously the importance of sustainability. And we’re really at the heart of this, which is super exciting because we’re demonstrating, you know, significant thought leadership in this area as we really lead the whole area of plant based, leveraging the power of the plant and bringing the power of the plant to people as part of our leadership of botanical synthesis and more to come in this area.

When we look at our key strategic pillars, as we’ve discussed before, we have the nutraceutical pillar and we have our pharmaceutical pillar. Tonight’s discussion, we’re going to focus on our nutraceutical pillar, and I’m going to spend some time taking you through how we are mining the gold in our technology.

I always said when I came to this company three years ago, I actually celebrated my three year anniversary about two weeks ago and wow, it’s gone so quickly. It’s been an amazing journey. But I always said that, you know, BioHarvest really was like — it was like an R&D gold mine. And this gold mine just had this most amazing R&D and it was all about bringing this R&D to the market.

We’ve done it with VINIA and we’re busy scaling that as our core product. And tonight we’re going to talk about how we really take that to the next level as we look at disrupting a number of billion dollar categories with the power of our superior science, superior taste and ultimately superior efficacy.

And that’s all anchored in our technology. So it’s going to be a fun ride and I think you’ll be really excited with the work that we’re doing and what we’re going to be bringing to market in the next 12 months. So let’s first touch on Q1 performance. Overall revenue for Q1, you know, as we start to scale the business, we saw a three-fold increase in overall revenues. You’ll see we’re now reporting revenues as opposed to sales orders.

Given the unique mix that we have and the size and sheer magnitude of the business and the importance of subscriptions. So we see now basically Q1, Q1 having a three times increase overall. When we look at the US, it was a fantastic quarter for the US, nearly a five times growth hitting that just under $1.7 million in revenue.

So really there’s a lot of momentum in the business and we see that also in little Israel, which is an important barometer for our business. You know, Israel is now three years, pretty much three years old. It’s a more mature business. We grew the business, in fact, 38%. When you look at shekel to shekels, it’s 23% when we reported in US dollars because there was a quite significant devaluation of the Israeli shekel to the dollar.

But when we look at shekel to shekel, we saw a 38% increase in first quarter ’23 versus fourth quarter of ’22. Importantly, as we are so focused on driving the business to profitability by the end of the year on a cash operating level is to start to see a significant improvement in our gross profit margins.

And we start to — started to see this with increased manufacturing scale. And this obviously for myself and Ilana, our new CEO in the business, and in fact all of the leadership team is a major, major focus for us to drive the gross profit margins. And obviously, you know, we have an aggressive revenue target of guidance that we’ve given of 17 plus million. This is still achievable. But obviously, as you can see, it requires continued momentum build and a step up in the second half of the year as we start to increase our marketing activities.

And I’m really looking forward to closing the second quarter in a few days’ time after, you know, overall solid performance, continued momentum and then continuing that momentum into the third and fourth quarter, but taking it up a significant notch as we start to look really at driving very, very hard at that very aggressive target of 17 million.

But we, you know, we don’t set easy targets. We should be setting very challenging targets and we’re going to do what it takes to get there. I’m going to now spend some time on the major actions that we are taking to move the business to scale and profitability.

So you’ve probably seen this model before. I introduced you to it, last meeting. And the model is a model which really helps us understand where we need to be focusing as a management team, as a leadership team, and in the transparency that we always have with our shareholder partners.

I always like to take you through really what I’m taking my leadership team or what we’re working through on a week to week basis. So the model is obviously it’s all about for us, we’ve got to optimize revenue management and then there’s just ruthless, relentless cost management in the business.

And by optimizing revenue management with a maniacal focus on cost management, we will get to that break-even point and then obviously start to really generate the significant profits that we believe that our technology and that we as a biotech company can deliver in the future based on the power of the technology that we have and our ability to operationalize that technology.

So let’s first talk about on the — start on the revenue management side, where I’m going to be spending most of my time tonight talking about the importance of channel scaling and product scaling.

All right. So channel scaling. We’ve talked about the importance of not just relying on vinia.com as our website. As you know, we’re advertising on TV, so we fill the top of the funnel and we’ve got to make sure that we are present where people like to go and shop the different channels that they like to shop.

So obviously Amazon for us is king. We’ve started now in the last literally four weeks in Walmart.com as well as pushed into eBay as well through a partner. I’m going to spend tonight talking a little bit about the Amazon success that we’re having because obviously Amazon is such an important powerhouse in the US.

As people start to understand a unique product proposition, they then start to look for it either by going first to Google and then directly to the website or directly to the website, or if they’re Amazon shoppers, they go just directly to Amazon to go in there and to learn more about the product.

So on the Amazon side, we added Subscribe and Save in early May. Now, I think it’s important for everybody to understand that in we were out of out of stock in Amazon up until the literally the third week in March. So actually it was like record time that Amazon gave us the permission because they could see significant velocity that they gave us permission to move, to subscribe and save.

And we have the ability now to and we’re driving a 10% saving for people to go onto a subscription program. So that’s helped us significantly grow our Amazon business. And then in addition, what we’ve done to increase the number of SKUs that we’re bringing and the choices to consumer and to provide them better value, we’ve added our 60 SKU, our two month SKU at 88.95 into the overall mix.

So as you can see here, the consumer has a choice of a one month, 30 count to 49.95, $1.67per capsule or they can go to the 60 count at 88.95 but roughly $1.50 per capsule. Wow. We’ve had amazing results on Amazon and I really want to thank my Amazon team that are really very, very focused on driving Amazon to be a critical channel for us.

Since we came back into stock in 2023, which was that at that middle of March, we have sold more than 4,000 orders, 4,337 orders, and that equates to roughly $220,000 in revenue. Our average units per order is 1.2. So we’re seeing many people buying multiples. What’s important to understand is that we’ve only spent roughly $7,000 in marketing on Amazon so far.

So what you see happening here is that a lot of the Amazon business is coming from the TV spending that we have across the broader TV networks with people then moving into Amazon. When people are in Amazon, we have spent that $7,000 to make sure that we’re bringing them to our products.

And what we’re seeing is a ROAS, which is a return on advertising spend of roughly 9.65. And what that means is for every dollar we spend, we’re getting back in revenue $10, which is amazing. We were working methodically to scale the business in a way that.

At best, we’re doing what it takes to maintain that kind of ROAS as you scale the business, your ROAS traditionally does come down. But at that kind of level, if we come down to six or seven, it’s still, you know, a fantastic result from a return on investment perspective. We also see a number of repeat buyers coming back with a very short period of time. 25% of our repeat of our buyers are repeats and that’s without subscription. So that’s a very strong metric.

And Q3, we’re now getting prepared to really start to scale Amazon and increase our spend as we go after specific keywords as well as specific other players in the category that we’ve seen an ability to take a significant amount of business from. So overall, you know, we’re priming ourselves as we scale into the second half of this year to continue aggressively with what we’re doing. That’s working top of the funnel, moving into Facebook and Google to drive greater conversion.

And we’re seeing continue to see fantastic conversion rates from the work that we’re doing and then making sure we have a really, really strong Amazon there to catch people who are those hard core Amazon users and then branching out into your walmart.com eBay’s et cetera. Great. I’m now going to talk about product scaling where we’ve seen a lot of excitement. I’ve had a lot of connection points with investor partners in the last 24 hours since the announcement and all very encouraging and very, very exciting.

And I’m going to spend some time now dimensionalizing and breaking down a little bit of the detail that we went through in the press release yesterday. So first of all, before I go into the detail, we celebrated last month, two years in the business in the US. Now, granted, the first 15 months were very much putting out just dipping our toes in the water because we couldn’t scale the business yet because we didn’t have our manufacturing facility up and running.

As you know, in September, we hit the accelerator button and we started to push the marketing and that’s when we started to see the significant growth. But we have at the end of the day, really hit some major milestones in achievements. We have more than 2435 real verified reviews with a rating of 4.7.

These include our Amazon reviews as well, which are continuing to build. And that’s really an amazing result given the activity that we’ve had. When you look at it over the last 24 months, we’ve sold $8.26 million of VINIA, VINIA revenue. That equates to roughly 170,000 bottles of VINIA and 7.25 million capsules consumed.

And as I said to somebody in the last, that’s 7.2, 5 million bottles of red wine equivalent of based on the piceid resveratrol. And you can imagine we’ve done that utilizing our 1000 square meter facility. And you would think if that was coming from real vineyards, you can just imagine how much land that would be required for that.

So just kind of a plug for the quantumness of the sustainability advantage that we bring. So with these achievements, we understand our customers or consumers really well and want to spend some time just articulating the four core consumers that we are every single day connecting with in order to purchase our VINIA brand.

Okay, great. I hope we’re doing well. I don’t have any emoticons. So I don’t know how you guys are feeling, but I hope you’re feeling as good as I do right now. Okay. So the first consumer I want to talk about, which today is a big part of our business we call problem solvers.

These are people normally 50 plus. Their motivation is they have today pre-existing blood flow related challenges and they are looking for solutions now to improve their overall quality of life as it relates to challenges that are derived from having blood flow challenges across their overall bodies. They’re very, very problem solution oriented. And these we call problem solvers.

The next consumer that we’re continuously focused on is what we call proactive, preventative people. These are people I still fit in this group just that are 35 to 50. They realize that, you know, life is not eternal. They focused on doing what it takes to maximize their longevity. They want to live to 100. They want to enjoy life to the max.

They do understand and they well-educated and they understand that blood flow is king for an overall functioning of the healthy body. They also understand on the importance need, as you get older, to do what it takes to reduce any type of damage to your overall cells. And they’re looking for signs. They’re very discerning. They’re looking for signs. They’re looking for clinical results.

They can smell BS when they see it. And they’re all focused really on optimizing their individual longevity. These are our proactive, preventative consumer. The third group is more of a collective group of what I call we call our professional integrative medicine specialists. These are medical doctors, chiropractors, naturopathy, osteopaths, homeopaths, nutritionists, 35 plus highly qualified.

Their motivation at the end of the day, they’re looking at the best conventional and complementary medicinal solutions that are evidence based that can solve the core issues of their patients. They’re always look first to natural supplements, which have efficacy and clinical support to give their patients before going other routes. They appreciate clean label.

They don’t want any fillers and no solvents, right. And that’s why VINIA has really resonated so strongly with this audience, given the science, given the cleanliness of our product and obviously the superior efficacy that we have grounded in clinical trials.

And then the last target that we’ve seen really good traction on in the last eight months and really kudos to AJ and Jared that have led this effort with elite athletes and this group we were kind of calling out athletes, pro athletes, but also those wannabe athletes and weekend sports warriors that have big dreams.

These are normally people 16 to 35. Their motivation is we want to be the best at what we do. We’re looking for that extra edge. That extra 1% to 2% can make a huge difference in their performance when you’re at this level. They today and it’s amazing because they all work with nutritionists.

They’re so educated specifically as it relates to their physical and mental performance. They understand that increased blood flow and better oxygen and nutrient delivery can really deliver this edge. And it’s critical part of the functioning and that blood flow is a real anchor in their performance.

They only want the best. They trust what their coaches and what their nutritionists recommend. And this is an area that we’ve got heavily involved in by connecting with the coaches and the nutritionists and then driving it to the athletes. So these are the four consumers, consumer groups that, you know, we believe have the greatest opportunity for us as we start to look at growing our business.

We are making great inroads with these consumers, with our superior science and our superior efficacy. The opportunity to optimize and go big here is significant. And this is what we’ve seen because really up until now, we’ve just been like tippy toes as it relates to the marketing spend and the marketing dollars and our ability to have the channels to reach these consumers.

Well, it’s now time to change as we really start to scale the business. And what this means is that in the next 12 months, you know, we’ve built a $8 dollars plus business from pretty much one skew and we’re going to go from one skew to ten skews. And we’re going to be doing this leveraging the power of VINIA as the base to develop unique formulations and delivery systems to deliver best on the needs and the lifestyle of these specific focused consumer groups.

And we’re going to be doing this with superior science, with superior taste, and ultimately with superior efficacy. And in doing this, we’re going to go from one category that we operate in to five categories that we operate in and are going to be disrupting with our unique superior science, with superior taste, because taste is king as well as superior efficacy. So now let me break this down and help you understand what this means for us in the next 12 months.

The first category we’re going to disrupt and leverage the power of VINIA with is the coffee category linked to really what is a cultural delivery system for Americans, which is basically the single drip coffee, which ultimately today is led by Keurig. And we’re going to be targeting our proactive consumers as well as our problem solvers because they are heavy coffee consumers in the space.

Just to give you some perspective. 38 million coffee Keurig, I should say, Keurig machines in the US in 2022, 41% of US homes have a single serve brewer. The remarkable figure when you think about it, 28% of USA workplaces have a single serve brewer. And when you look at the size of the prize here, just to dimensionalize it, if I look at the US market or I should say the North American market and the European market, it’s 62 billion pods.

Yes, 62 billion pods of coffee. That’s a 27, literally north of $27 billion. Significant, significant opportunity and growing. Obviously, we’re not targeting all of that. We’re being very focused on two key areas functional coffee and also decaf coffee in pods.

When we look at functional coffee, we see that functional coffee roughly represents about 500 million pods across US and Europe, of which probably, you know, 40% to 50%, let’s say 250 million pods is in North America. When we look at decaf and decaf, it’s kind of like, you know, the small little giant that’s waiting out there to be given a little bit of attention.

10% of Americans drink decaf exclusively, and there’s another 10% of Americans that drink both decaf and regular. So if you look at the size of the prize of decaf, it’s probably a 6 billion pod opportunity across US and Europe. Again, let’s say 40% to 50%. So let’s, you know, basically say it’s like a, you know, 2.5 billion opportunity in the US of A. So this demonstrates the significant opportunity that we have to go in and disrupt each of these coffee market segments.

Let’s talk about how we’re going to do that. So what we’ve been working very closely and we’ve found an amazing partner out of Seattle, the home of coffee called Joe’s Garage. Joe’s Garage are probably one of the top three co-manufacturers of specialty coffee in the USA.

And we’ve had a fantastic experience working with Chris Mackenzie and the team there in developing on our critical formula, which is all around superior science, superior taste and superior efficacy in order to disrupt the market. I spent some time in Seattle. This is, you know, on the right hand side, you see some of their raw specialty coffee. And here it’s going through the roasting, the roasting process. It’s amazing to see beautiful, beautiful factory.

We spent a lot of time on the sensory side making sure that we have the best tasting formula versus our core competitor, which is [indiscernible]. And as you can see, we had a significant taste testing session while I was there. And on the left hand side, you see the raw coffee beans that we’re using, these very 100% Arabica specialty coffee grade together with the VINIA in the middle. You see how it’s all blended together.

And here we see, Justin, even though we can’t see him on the TV screen, we see him here on the picture actually helping me with some of the sensory work and overall taste evaluation with Dave, who is a member of our board as well.

We’ve really worked hard to come up with a superior taste, leveraging our superior science and superior efficacy. And these what you see here is our work in progress packaging. It’s for illustration purposes only. There’s a lot of marketing work we’re doing to really make sure that we nail it because this is so critical part, but starting to get there.

But we are going to deliver superior taste proposition. We have a product that has 100% Arabica specialty grade. It’s a custom blend. It’s low acid, which is very important. It’s small batch artisan roasted in Seattle in the home of coffee, handcrafted from high altitude. Importantly, responsibly sourced and keto friendly. The competition in order to provide the energy are utilizing MCT oil, turmeric, D3 and B vitamins.

And as a result they’ve laced their product with cinnamon. You can see they right here are full bodied flavor with cinnamon. The cinnamon is there is ready to mask a lot of the challenges you have in the flavor profile from the MCT oil, the turmeric and the D3 and B vitamins. In our case, we’re driving that energy from blood flow.

There’s no need for maskers and we really believe we have a superior taste and we’re going down the path, obviously, to quantify this with quantitative blind taste tests to make sure that what we launch is superior because we want to go out and launch on a superior taste platform as well as superior efficacy.

Talking about superior efficacy. Our efficacy is clinically grounded. It’s backed by human clinical trials. We’re going to be driving that energy that decaf consumers they need, but are so fearful for that energy coming from caffeine because they are so concerned about the caffeine driven crash or kick or kick or crash, I should say.

And we’re delivering through blood flow that 12 hour sustained release inside their pod. And we’re obviously going to be focusing on key claims anchored in our heart health claims, also talking about the ability to explain how we drive the increased blood flow through increased dilation of arteries and the fact that this drives significant improved physical energy and mental alertness as a result of more oxygen and nutrients going to the overall, you know, the brain, and the body tissues and cells.

So this is how we’re going after the decaf space. Super exciting. It’s a sleeping giant, you know, they often say the opportunity of being, you know, a big fish in a small pond, in a way, in the scale of things, decaf is, you know, 10% of the coffee market. But that 10% is huge.

And if we hit a home run in the decaf market by giving that decaf consumer, that from a lifestyle perspective needs the physical energy and mental alertness. But they can’t get it from coffee because of the caffeine. And now we’re able to deliver it through the coffee delivery mechanism.

This can be a game changer and that’s what we’re trying to do here to really build leadership in the decaf market from an overall pod perspective. In addition, we’re going after regular coffee drinkers. This, as you can see, is more of a blood flow driven super energy coffee. We’re still working on the final branding here.

What’s unique about this is you’re getting all the benefits of caffeine, plus you get that extra energy which is derived from blood flow. You’re getting that extra physical energy and alertness. And again, that energy is not an energy kick or an energy crash. It’s that 12 hour sustained release energy that you get on top of, that kick you’ll get from your caffeine that you’re consuming inside this product.

So again it’s a very interesting model that we’re going to provide consumers around how we’re giving them that long-term energy. You get the kick from caffeine and then VINIA basically maintains that energy through the day, and that’s obviously anchored in all of our research of taking one capsule of VINIA every single day for 90 days. In our clinical trials, we’re able to get that significant increase in dilation of arteries, which drives the increased blood flow and energy.

So hopefully with that you have the same sense of optimism and excitement around how we’re using superior science, superior taste and ultimately superior efficacy to deliver significant value to the consumer and to disrupt what are today massive categories because they’re so ingrained in the overall consumer lifestyle of Americans.

Okay, great. I’m going to move on now to talk about, the other major focus of us, of ours, I should say, which is going after those athletes and weekend warriors and those wannabe athletes, as well as providing more choices for our integrative medicine specialists to be able to provide their patients based on the different needs.

And this in this case, we’ve looked at our branding strategy and felt that we needed to have a brand that was anchored in our VINIA essential equity, but really spoke to what the athlete is looking for. And that’s why we’re going to be launching the VINIA Pro line-up. This really is born deep in what we’ve seen with key grassroots activity.

And as you know, the work that we did with Joe Murphy, with all the NFL combine athletes and seeing the impact that, you know, VINIA was having on their overall performance and how the nutritionists really started to understand that this is a critical part of their overall eating and supplement regime that they need to have to really be competitive and to raise their overall performance.

Ladies and gentlemen, today we’re in a very unique situation where we have as a result of word of mouth. And the results that people these athletes are getting on VINIA. Everyday we’re being approached by different athletes, coaches as well as sports nutritionists to partner with different institutions, different teams, different individuals on actually providing them with VINIA being part of their overall training and regime in order to improve their performance.

You know, as you know, we sponsored a number of players in the NFL draft that all got drafted. And I think I’m going to have great careers over the next few years. We have two rising NCAA stars that are looking for a breakout year this year. And you see Dallas Grant at the top and Matt Bedford below. We also have, you know, major coaches here, Robert Steeples from LSU, actively working together with us.

And you know, frankly, we’re working with the major sports agencies like Wasserman, ISE, Exos and 3 Strand, and this is how we have right now 200 plus NFL athletes who are utilizing VINIA during the training camps that they’re on right now. In addition to this, you know, we’ve got rising stars like Baron Davis from the Denver Broncos, a line-backer that is set to have an amazing season this season coming up.

And then an Olympic athlete, an Olympic swimmer, Michael Andrew, who is looking to really set a record as far as the 50 meter freestyle is concerned. And in addition to these, you know, hard core professional sports athletes, we also have people that we’re working in partnering with like Gary Brecher, who’s a very famous biohacker, a well-respected longevity expert that are really now starting to understand the power of VINIA as it relates to the different treatment regimes that they have.

So super, super exciting. And, you know, we’re starting to get that street credo. And with that street credo, it allows us to really be bold, to punch hard. And I’m really proud to introduce to you today what is our VINIA Pro line-up. We have the VINIA Pro blood flow, athletic formula.

We have the VINIA Pro blood flow and plant based protein formula and then the VINIA Pro blood flow and energy hydration system. And I’m going to spend a little bit of time on each of these respective unique propositions that we’re looking to bring to the market in Q1 with coffee coming into the market. As I’ve said previously, we want to sell our first pods in the market before Christmas of this year.

So I think it’s important first, before I go into and I don’t mean to tease you before I go into each of the products to kind of just share a little bit about, you know, the mechanism of action here of why we believe we have that superior science, superior taste, and specifically the superior efficacy.

And what we’ve learned is that performance is all anchored in blood flow. You’ve heard me say this a few times already tonight. Blood flow is that crucial edge that separates athletes from their competition and VINIA serves as the critical component in their routine. Why? Because it plays a pivotal role in increasing their blood flow.

And with that increasing blood flow, you have more circulation of vital nutrients and oxygen to their cells, their tissues and their muscles, whilst at the same time that blood flow is eliminating waste for the expedited active recovery.

So this holistic approach that VINIA delivers for the athletes can drive a significant improvement in the overall performance, giving them the extra advantage that they need to excel, and it becomes an indispensable addition to their training regime. So with understanding that on how all the pieces come together.

We also making sure that we have all the right quality based credentials in being NSF certified sport. This is critical because even today there are many teams that want to use our VINIA, but are unable to because we need to have this NSF certified sport verification, which is a critical part of the assessment to ensure that there’s no violation of any anti-doping laws.

So basically we’re starting the process right now with the organization, the NSF organization, and this is critical because it’s accepted and mandated by Major League Baseball, National Hockey League, Canadian Football League, also NFL, NBA, PGA, and on and on and on.

It’s a critical marker for us to have wherever possible on our products. And that’s something we’re very, very focused on getting before we launch in the first quarter across as many of our product line as possible.

Obviously, we’re working with co-packers. In some cases it might be a little bit challenging, but we believe that across these three lines, at least two of them, we maybe three, but at least two will be NSF certified sport.

Question-and-Answer Session

A – Justin Meiklem

Hey, Ilan. We just had a question about certification. Our products are produced, you know, obviously a very novel and unique way. Does organic would that ever come into play with, with VINIA when you’re talking about certified organic.

Brian Cornblatt

The whole notion of organic, it’s interesting and it’s a much bigger discussion. The whole notion of organic is a little bit challenging because like organic, when you think about organic organizations, they always think about the ground and we don’t grow in the ground. We grow in bioreactors.

So there’s a bit of education that we have to do with the third-party certified organic organizations. It’s something we will get to. We just haven’t seen it as a priority, but we have to educate them because they like they have an agricultural model, right? That’s the way I think.

So this is work that we need to do. You know, I would say, Justin, we get maybe, you know, one question on organic that comes up every three months. It’s not a major driver for us. But, you know, again, that’s why it’s lower in the priorities. But this NSF certified sport is obviously very important for us to be validated and get into the critical teams that we want to be obviously partnering with.

Justin Meiklem

Perfect. Thank you.

Brian Cornblatt

No problems. Okay. So now I want to talk about our poor product, obviously, which is the blood flow athlete formula. So what we found is that the current dosage that we’re using for top athletes has been roughly it’s about two capsules per athlete. You have some athletes that may take more, but it’s mostly two capsules per athlete, which contains 12mg of piceid resveratrol.

So we’ve kind of settled on the pro dosage. We’re going to be able to settle on 50mg of piceid, resveratrol. And this is something that we can produce with our new drying system. We’re able to get much higher levels of piceid and we can do this with two capsules.

The claims will be focused on giving you that extra performance edge and then two critical claims which are around improving physical energy, performance and mental alertness because of the increased blood flow, delivery of oxygen and removal of toxins.

And importantly, as we started to see as a result of what happened in the NFL season last year, the importance of heart health, it’s on the mind of every single coach. Supporting heart health by improving blood flow and delivery of oxygen is so important. So this is where the key focus will be for us as we look at launching this product.

It’s the athletic formula. It’s two and a half times stronger than the existing call it baseline formula. Again coming back to my superior science, superior taste and superior efficacy. We’re utilizing this as we go to disrupt the protein bar market.

The North American protein bar market is worth $2.5 billion and is growing at a CAGR of roughly 7%. We will have one capsule of VINIA in each bar, plus 15g of plant based protein. The bar itself will be a 70 gram bar, will be 240 calories. It will be positioned as a dietary supplement because we’re able to position it as a dietary supplement. And we will start off with two flavors chocolate and peanut butter.

The claims will be focusing on increasing blood flow and improving protein delivery to the body’s tissue cells and muscles. What’s critical when you’re an athlete, you’re eating a protein bar. You need to have that fast acceleration of the protein to your actual muscle cells. And with more blood flow, we’re able to deliver on that.

In addition, we’re able to remove the waste products and toxins from the muscles and cells to support recovery. And then in addition, because it’s VINIA, it’s increasing the physical energy performance. I have here, ladies and gentlemen, the two bars this year is the chocolate bar. Okay. And here I have the peanut butter bar. Okay. Justin, tell me, are you seeing this? Okay. So what I’m going to do.

Justin Meiklem

100%.

Brian Cornblatt

I’m actually pretty hungry. I haven’t eaten dinner.

Justin Meiklem

We’ll open up in the Q&A when you’re full screen. We’ll go back and look at them too.

Brian Cornblatt

Yeah, I want to everybody to see this beautiful, sensuous middle that we have with the protein. It’s very delicate. It tastes really it tastes amazing. It was super exciting. It was very, very tough. R&D challenge. And our partners at Food Pharma did an amazing job. And you can see here the protein inside. You see the rich chocolate layers. Okay. So this is this is the chocolate. And I’m going to show you now the peanut butter. Okay. You can see the peanut butter looks a little bit different. A little bit lighter. It doesn’t have that that same darkness as a result of the chocolate. And this is the peanut butter. And just to give you some perspective on what the bar looks like, I know I cut it, but, you know, it’s we’re talking about a 70 gram bar. So it’s a serious bar, right? Okay. How’s that, Justin?

Justin Meiklem

That looks good. Does that do the job? I should be definitely not a hand model.

Brian Cornblatt

We’re going with the coffee.

Justin Meiklem

Sorry. Let me just get this down.

Brian Cornblatt

Not at all. Yeah, the one thing I comment is I was able to join Ilan in a taste testing with the coffee. And it was like being in an exam because I knew he wanted me to pick the right one as my favorite. But the interesting thing is the vanilla is it doesn’t affect the taste. It’s not obviously VINIA, which I was surprised.

Ilan Sobel

So that’s a really good point because VINIA from an overall sensory perspective, what we call in the industry, the Organoleptic performance is amazing. So it does not affect the other flavors and the other components of the whether it’s the beverage or the bar. So that’s why it’s a very versatile material that we can use.

All right. Let me put these bars away. Okay. Now I want to talk to you about how we’re using superior science, superior taste and superior efficacy to go after the electrolyte beverages segment. This is a big segment. That we’re focusing here on the powdered beverage segment, which is where we can play best given the nature of our product.

And basically what we see here is two major players. We have LMNT as well as Liquid I.V. You look at the size of Liquid I.V, they’re a monster. They have 100,000 reviews on for one of their SKUs on Amazon. Same thing for LMNT. Thousands and thousands, 20,000, 30,000. When you add all their flavors together and they really are our major players from what we estimate anywhere from like, you know, $6 million to $7 million a month each just on Amazon.

On the one side of the sensory continuum, you have super salty. LMNT, which is very salty because it has 1000mg of sodium, literally. It’s like you’ve tasted you’re drinking water from the from the Dead Sea. On the other side, you have liquid. That’s super sweet because they add significant amount of sugar, 11g of added sugar.

We with our unique hydration system, our blood flow energy hydration system, that’s going to have 400mg of VINIA, about 600mg of sodium, 200mg of potassium and 85mg of magnesium. Fits perfectly with a very balanced taste. And again, go back to my model. Superior efficacy, Superior science, Superior taste and superior efficacy.

And we’re looking at landing this at the 10 to 15 calorie mark per stick. We also like with everything we’re going to quantitative taste test to make sure we’re beating our competition. But we believe from the work that we’ve done so far that we have really, really strong formulations.

So North American markets with roughly $15 billion. This is the total hydration electrolytes market. The powder piece is at least a couple of billion dollars at least. At least you have, like I said, 400mg of VINIA.

Our electrolytes are all organic. Our for example, our potassium is coming from coconut water. It’s powdered coconut water. So we’re using the best the best of electrolyte systems. In addition, we’re using a very unique magnesium that when the magnesium is actually connects to the water, mixes with the water, it produces five milligrams of hydrogen upon mixing with the water.

And there’s been a lot of research done on how hydrogen is really acts as an important mechanism for recovery for athletes. So we’ve been able to figure out how to get the magnesium to work in this product and to actually you actually see and I’ll do this the next time we meet with the final formulations, I’ll do the demonstration to actually show you this effect, which is very cool, where you actually see the hydrogen build up in the bottle as you mix it.

And therefore when the actual athlete consumes it, they’re getting the benefits of not just VINIA. Not just the organic electrolytes, but also roughly five milligrams of hydrogen. So it’s a very, very differentiated proposition that we’re bringing into the market here. And we are you know, when you look at it in the context of the current players, we really feel we have significant disruption to go after these big monsters.

These guys are huge, huge players and we have superior science with our VINIA. We have the added benefits of the hydrogen, we have organic premium electrolytes that we’re utilizing. And as a product sensory experience, it tastes really good. And we’re looking at flavor pool, watermelon, mango. I’ve got I’ve got here a whole bunch of samples. Now I’ve just come through my sample pool here.

I’ve got fruit punch. We’ve got orange, we’ve got lemon, we’ve got raspberry, we’ve got Asahi, we’ve got a pink lemonade, a mango and a berry and a grape. And we also have our raw VINIA flavor. In fact, our raw VINIA flavor is excellent. It mixes very well. And that’s another option that we bring.

Now, we’re not going to be launching 15 flavors. We will choose the best, probably four flavors and bring four flavors in sticks to the marketplace. Super exciting disruption, superior science, superior taste and superior efficacy that is going to deliver something really, really unique to actual athletes or wannabe athletes. And you can literally see and feel the overall impact of that product and what you’re consuming, ultimately being a major disruptor of the category.

So, you know, these category disruptors, what’s exciting is, you know. We — using VINIA as the core. So there’s really minimal R&D investment. Our R&D investment is more just around things like stability, making sure we’re not losing resveratrol and then partnering with these amazing partners that we have in each of these categories.

But what it allows us to do is to broaden our addressable market, to include broader ages and lifestyles. We’re able to, for sure, accelerate top line growth. It obviously is leveraging our existing capital base from a manufacturing capacity perspective. What’s important is we’re premium rising, so the dollars per unit are going higher.

Somebody told me when I was a kid working in a delicatessen when I was 14 years old, in order to earn money back in the days when I just immigrated to Australia, my boss said his name was Brett. He said to me, Ilan, he’s an Aussie. He said, Ilan, you don’t bank percentages, you bank dollars. So importantly, we’re able to increase the dollars we’re earning per unit here. So it’s helping us from a premiumization perspective.

We’re also going to be increasing our marketing efficiency, lots of opportunities to cross-sell and ultimately all translating into improved bottom line performance and cash flow performance. So that kind of finishes the product scaling chapter. Wow, I’ve gone long. It’s like an hour. Okay, Justin, I have another ten minutes. Is that okay?

Justin Meiklem

Absolutely. Yeah, of course.

Ilan Sobel

Good. So now I want to talk to you about, obviously, what we’re continuing to do on the marketing optimization side, which is obviously a huge focus for us as we look to reduce our cost of acquisition of customers. We did see our cost of acquisition come down 13% in the first quarter versus 2022.

And we’re focused on continuing to drive that cost of acquisition down as low as it can go. Obviously for us to do that, we’re now working on a surgical focus on mainstream TV. We’re targeting a number of other channels and shows, and through big data we’re able to optimize where to place our two minute or 92nd commercials and really making sure that we’re optimizing every single dollar with these commercials with the testimonials.

To continue with the content work. We know because we know that content really is a game changer. People are just looking for so content and are hungry for content. I was interviewed in the Rosenberg Report, which is a major TBN show. This will be aired in. We’re just finalizing the dates as we speak.

It’s going to be in the next probably two to three weeks and that will be obviously popped into for sure a few hundred thousand households. And we know when we do these programs, we get significant conversions of customers into purchasing the product. In addition, Brian and I were in Miami last week, I think it was, yeah, it was last week.

We spent a fantastic day with Gary Brecher, who I mentioned before, who is really an amazing thought leader in the area of longevity. And Gary has his own podcast and we will be featuring one podcast with Bryan, one podcast with myself. And he has extensive reach. He has really developed a huge following.

And again, this is definitely going to help bring an understanding of the power of by harvest, the power of our technology, the power of our leadership in botanical synthesis, and how we’re leading this movement of change, and obviously culminating in the power of what VINIA is able to do as it relates to its different functional benefits.

Moving now to cost management. I thought it would be great to share with you just an update on our manufacturing scaling. Ladies and gentlemen, shareholder partners, I wish to introduce to you our new premium premier drying machine here in Germany. The machine is finished.

Last week the team went over and we did our final acceptance test where we had excellent functioning of the overall product. We right now and you can see it, it’s a machine for sure. Just given what it can do. Just give you a sense of the size you have. You have one of our engineers and you can see how big the machine is that there is the opening cavity. It looks like a big safe where the cells go in in order to be dried. This machine right now is literally being taken apart, put into a container and is being shipped to Israel where it will be basically installed in our facilities.

And the focus now is for this, where it will be basically installed in our facilities. And the focus now is for this machine to be producing material starting beginning of fourth quarter. So coming to the end now, I hope you’ve enjoyed the strategy, the plans to operationalize everything that we’re doing to disrupt these categories in the nutraceutical space.

How we’re able to edge our weight and push our shoulders and our elbows outside of just the pure dietary supplement nutraceutical area into other categories and really drive disruption with superior science, superior taste and superior efficacy. Broaden out our target audience so we can really scale the power of our technology, really unleash the power in this gold mine that we have, and ultimately driving the revenue line, getting us quickly to the break even, and the benefits of profitability and ultimately positioning us in the best possible way.

Now, this is just one phyto medicinal composition. In the context of VINIA that can, you know, just the gravity. We hit one home run in what I’ve shared with you now. This takes us to really opportunities of getting to that aspiration of a multi-billion, multi-billion dollar biotech company.

You take a brand like Celsius, it’s a beverage brand where literally three years ago you blinked, you couldn’t see it. They came out into the market. Got strong consumer engagement and consumer preference, had an interesting, you know, initial proposition and today is valued at $11 billion on the New York Stock Exchange.

So you know. We have a good strategy. It’s now focused on executing our strategy. What you see today is what we can do on VINIA. There’s more. There’s more coming, but I’ll save that for later. We’ve shared, I think, enough today. Um, but just think, you take this and you look at what we’re going to do on our olive sales.

And the magnitude of actually doing similar, similar playbook on our olive cells and on our pomegranate cells and then the rest of the pipeline of products that we have, leveraging the power of the plant kingdom here, which is going to take us to that aspiration of being $1 billion biotech company.

Our shareholder partners have been patient. You know, it takes time to build these capabilities. We’re getting there. We’re not there yet, but we have a clear strategy. We’re now focused on operationalizing the strategy. And I have enormous confidence in the strategy and my leadership team and the broader organization to be able to execute this and really start to get some significant, significant runs on the board on top of what we’ve already delivered as a business up until now.

So thank you for sharing this journey with me, and I’m looking forward to moving down the operationalization of this journey with all of my shareholder partners over the next six months. Thanks, Justin. Over to you.

Justin Meiklem

Awesome, man. Yeah, Let’s go. If you can go full screen here so that you can be in the spotlight. And thank you and we do have Brian and again, for everybody who’s anybody in Toronto, Brian’s there next week speaking at the collision conference.

Brian Cornblatt

We haven’t put out a news release on it. I’ve got somebody complaining that they hadn’t heard about you being in London, England. So we’re probably going to put out a news release on that one, too. But what’s the name big conference you are speaking at next week Ilan put out a news release on that one, too. But what’s the name of the big conference you’re speaking at next week, Ilan?

Ilan Sobel

So I’m actually being invited by Jefferies Investment Bank, which is a top healthcare biotech investment bank. And I’ve been asked to I’ll be speaking on a panel. The conference really is focusing on innovation in the nutraceutical industry. And I was I was really quite chuffed and humbled that they’d invited us.

You know, if you look at the peers that I’m going to be up with, these are all $100 million plus, plus, plus, plus companies. And it’s good to be, you know, part of their company. And I’m looking forward to it very much. It’s going to be on Tuesday, all day Tuesday.

Brian Cornblatt

Yeah, excellent.

Justin Meiklem

And think maybe the first question we’ve had some and you did speak to it at the end about, you know, our investor journey and shareholder value like speaking about Jefferies. On company valuation. And then how do you how do you think people are asking about whether, you know, analyst coverage, institutional conversations? How do you see like the path to profitability and increasing revenues resulting in institutional involvement?

Brian Cornblatt

Look. I think what we’re going to start to see in the next six months is active engagement by institutions in our strategy. What’s going to be important, Justin, is once we hit the ground and we execute in the marketplace, once we start to see traction, I think it’s going to bring I believe it’s going to bring tremendous interest.

We’re already seeing today banking institutions. I got contacted by a banking institution yesterday that wants to talk, a major player that wants to talk to us around our technology and the applications of our technology.

So, you know, people are starting to it’s been you know, we’ve been, you know, at this at this journey now for three years. And, you know, it takes time. And I think what we’re starting to see is that as the world also starts to really focus on our swim lane in the context of going back to basics, going back to nature, going back to the plant, there’s really one company out there that has the capabilities at scale with unique R&D capabilities from a plant tissue culture perspective to unleash the secrets of cellular plant technology and then to be able to scale it in a way that we can scale.

There’s only one company and that’s us that can do that. So, you know, I really believe that that interest is starting to get peaked. We have to deliver more runs on the board to get that peak to the next level. But it’s coming and we can I can feel that it’s coming because I see it from the inquiries that come in. But the next six months are critical for us.

Justin Meiklem

Yeah. Speaking about timing, maybe if I could just ask you some timing questions here, and then I’ll ask Brian a question. So one question. You talked about protein bars, coffee, hydration. maybe just the order that you see those going to market and the timing, the timing potential timing of each.

Brian Cornblatt

Yeah, sure. So basically we’re focused from a commercialization perspective on getting coffee out before Christmas. I want to sell on Amazon and our website before Christmas. The first pods of VINIA coffee. Um, we will run that play and then basically in the second quarter we will launch a green tea with VINIA because we believe there’s a whole tea lineup.

That’s why you see me talk about five categories. Also teas in addition to coffee. Okay. The VINIA Pro lineup we will bring to market in the first quarter and we’ll, you know, bring the three products ideas to bring the three products to the marketplace very, very closely together because we want to execute them together so we can go to the athletes and we can say, okay, here are your options.

This is what you can have as your core supplement. And then you can in addition to that, you’ve got your hydration solution, your protein solution, right? So that’s how we’re basically thinking about it.

Justin Meiklem

Yeah. Thank you. And then, yeah, another few questions about the drawing technology that I hadn’t actually seen. The huge one. How about the sort of the timing, do you think, for that big machine to be online?

Brian Cornblatt

As I said, it’s, you know, I was working on the plan today with Ilan. We’re expecting to get finished product from that starting the first week of October.

Justin Meiklem

Okay. And the so we talk about the break even targets. Do you still see a path for that to happen in in 2023?

Brian Cornblatt

Yeah, absolutely. Look, it’s a target and it’s not an easy target, right. You know, CEOs that set themselves or have boards that set themselves are given easy targets. I mean, I don’t think that happens anymore, right. It’s an aggressive target. It’s a target that frankly, you know, I think about how we get there, you know, in the wee hours of the night when I’m still awake.

And we’re very, very focused on getting there. What’s critical now is to finishing off the second quarter and to, you know, take that momentum and to ramp it up another level. Um, that ramping up is going to be driven by more marketing investment.

And we have some interesting, interesting announcements that will be made, you know, in the future in that area and how we’re doing that in a creative way and also obviously supported by the supply chain as the increased demand is, you know, is able to sync with the supply chain.

So it’s an audacious target, you know, but we’re focused on it and I’m not going to let go of it until we see the end of the third quarter, and we see where we get to because really third quarter is what counts, you know? We had a good start to the year. I believe we’ll see continued momentum. And then, like I said, we got to just ratchet it up significantly for the third quarter.

And similarly on the — on the financial side, we’re very focused on that. The whole team is focused on that, and we’re going to do what it takes to hit that, that target in the fourth quarter. If we hit it, amazing. If we miss it, it’ll be very, very disappointing, but we’ll get it in the first quarter of next year. But that’s — this is how we’re gearing ourself performance-based organization, everybody, everybody has that target on their heads in my leadership team. Whether you’re Dr. Yochi, CTO, she has objectives that linking with their target as does Dr. Brian and as do you, Justin, right?

Justin Meiklem

Yeah.

Ilan Sobel

And I think we can speak for that on how focused we are as a leadership team on getting there. But these are not an easy target. It’s not a slam dunk. There’s a ton of work. Last year, when we said we were going to do between 5 million and 6 million, this time of the year, I kind of felt the same way. I’m like, we’re going to have a big second half, right? And we pulled it off. So, we’re going to do whatever it takes to pull it off, and hopefully, we’ll get there and worst case, we’ll take another quarter.

But at the end of the day, it’ll be disappointing. I will be very disappointed, but at the end of the day, we’re building fundamental capabilities, right? And it’s all about building the right capabilities, executing with excellence, and ultimately going to take us to that end point of being a serious player in the biotech industry able to play in nutraceuticals, in pharmaceuticals and there’s a few other areas that we will be talking to our investor partners on in the next few months.

Justin Meiklem

Yeah. Fantastic. A lot of people excited about the SKUs, the additional products, one more question before I go to Brian, sorry. I don’t know the answer to this. So you’ve spoken about future VINIA being more accessible in Asia or Europe or Canada. These new products, will they each most likely be available in these different markets at the same time that VINIA — the VINIA encapsulated will be or might that be different?

Ilan Sobel

I think it’s a couple of things. Especially the sequencing will start first with VINIA because you have to build the brand. You have to build the anchor. The anchor is VINIA, the supplements, right? If you don’t have that anchor, what’s amazing now is, like, if people don’t know about VINIA, but they see a hydration product. They’ll go and search VINIA. They’ll go — they’ll see, wow, this is a supplement. Look at the science, and now they’ve gone into hydration, right?

If you look at LMT, where did they come from? They didn’t come from science. If you look at liquid IV, where did they come from? They didn’t come from science, right? So, where you start is critical, so we have to build that franchise and build their credibility as we go into other markets. Canada and as well as, obviously, the Asian markets that we’ve spoken about. So that phasing is very, very important to kind of build the anchoring, the credibility of the efficacy and of the science.

And then over time, you can start to branch out into other categories. And, please god will have the success in some of these launches. And then we can, pick and choose what we want to put into different markets. The Japan market is a major hydrogen market. So I think, like, it’s a major electrolyte hydrogen market. I know that based on my coke days. And so that product could be very interesting, but I would want to launch my supplement first. And at least give it, 12 months, 18 months and then bring in that extension. So the sequence seems very, very important strategically.

Justin Meiklem

Yeah. That’s interesting. Hey, Brian. Is your microphone on?

Brian Cornblatt

It is. It’s a pleasure to be with you again today.

Justin Meiklem

Yeah. Absolutely. Hey, Brian, just one question. A couple weeks ago, you presented the clinical trial approach in our road map. So there are a few questions about any updates and whether the trials that you’ve talked about what might actually be underway as opposed to being in planning state right now.

Brian Cornblatt

Sure. And I can talk about two of the trials in particular. The first one that I alluded to last time MS optic neuritis study that we’re going to be doing. I can share that since that presentation, we’ve secured the lab for the biomarker analyses. We’re actually, right now, almost finalized the IP contracting, and that’s going to be completed. We hope by, say, first week or two of early July. And then after that, it takes a couple weeks. We just have to finalize our protocol. We’ll get that off to an institutional review board, also known as IRB. They’ll review it.

And then once we get the green light and stamped, approval. Well, I’ll go and do some site visits, and we’ll train the research team, and we’ll hopefully start recruiting pretty soon. So my gosh. I hope by the next time we have this presentation, I might be able to come back and share with you all that maybe we have our first patient or participant underway. But, let’s keep our fingers crossed and hope that everything goes according to plans.

The second one that I shared about was the glioblastoma study, that was a multinational, pretty interesting, and just far reaching study. Just last week, we finally got approval. There’s a board called the Animal Research Use Committee. So they gave us the green light. So our colleagues in University of Alberta just last week started using VINIA for the first-time in some of the animal rodent models. So, again, maybe, hopefully, if I can come back for a few minutes during Ilan’s next presentation, I might be able to update you all as well on some of the initial research and essays that we’re getting back.

Justin Meiklem

Yeah. Thank you. Ilan, I don’t know the answer to this. I was shocked at the size of the, like, the North American and Global Coffee Pod market. I know I use an espresso. I know that they’re recyclable. They’re not — those aren’t biodegradable. Maybe just status overall on that, that industry.

Ilan Sobel

All the pods now are recyclable that are coming from the co-manufacturers.

Justin Meiklem

Yeah. And that’s different than biodegradable, but right now it’s recyclable.

Ilan Sobel

There are biodegradable pods out there. They haven’t — there’s still like test and learn on that. We looked at that. We investigated that, but everything else is recyclable. In fact, the biodegradable pods, if the municipality that you’re living in doesn’t have the right kind of requirements in their recycling, then there’s — there are challenges even with those pods as well. So — but, yes, recycling now is like a cost of entry.

Justin Meiklem

Yeah. And I think safe to say that, that we pursue best practices as far as sustainable sourcing, et cetera.

Ilan Sobel

Yeah. Well, of course, wherever we can, wherever it’s commercializable, absolutely. There was a concern about going in — into the pod area, but now everything is recyclable.

Justin Meiklem

Yeah. No. I love it. There’s a good number of questions about that here. Brian, maybe one more quick one for you. I get this, on the phone often. People asking about optimal daily dosage for VINIA. People asking whether it’s fine to take two every day or just two on occasion. Some people saying that, that one capsule every day seems to be an overwhelming amount of energy for them. Can you maybe comment on the safety of different doses and maybe why? Why does VINIA impact people differently?

Brian Cornblatt

Sure. And it’s a great question, and we feel that all the time as well, family, friends, customers, So let me back up, and if you all remember, when I presented last time, my background is in oncology and genetics. And how I always answer this question is, There’s no one size fits all product out there, and no two people are ever truly going to respond exactly the same way, and that’s based on our genetics.

We get a strand of DNA from our parents, each parent, our mom and our dads. And sometimes if we have we don’t call mutations nowadays. We call them polymorphisms or small changes be going to have a big impact, and let’s just take a look at Placebo Resveratrol, the main active. Some mutations or snips can actually affect the way we been metabolize. We might metabolize that quicker or slower that impacts the way we have and we can actually assess efficacy of our product.

So long winded answer, to answer really quickly here, our average customer does just fine on one a day. We know for our athletes, that we do recommend two per day. They’re doing a little bit more. They’re more rigorous in their activities, and they need that incredible blood flow that Ilan so eloquently talked about a few minutes ago. So we do recommend two per day.

Just like you shared, Justin, we’ve had some people two, a matter of fact, down in Texas that just recently shared with us that they do take one and half capsule per day. They save the other half for the next day, and they get incredible sleep and can function throughout the day. And so, yeah, we have a big range.

The final thing is there’s an oncologist on the West Coast who’s recommending this for some of his clients, and he takes 12 per day. He’s been doing this for many months. Basically, he’s able to sleep very well. So, again, to answer your question, there’s no one size fits all, but for average person out there. I think one a day is going to be just fine, but we’re going to keep you waiting with…

Ilan Sobel

This is importantly just to add, all our clinical trials are anchored in one a day, right?

Brian Cornblatt

Yeah.

Ilan Sobel

Like Brian said, there are always some edge cases, right? But one a day is what we recommend in the morning. And then, obviously, some people take half, if they can’t one is too much for them, gives them too much energy just based on their overall genetic composition, and then the athletes we push to two.

Brian Cornblatt

And can I add one more thing, Ilan. Just to back up, Ilan is very credible. When he says that he’s up in the wee hours of the night, thinking about this stuff it’s the wee early hours of the morning for me, so he’s absolutely correct. Last night, I knew I was going to be up late. I went to a diner had coffee. I can’t wait till I have a chance to take our VINIA coffee at night when I’m feeling a little know, a little tired knowing that Ilan and I have got have some late night or early morning talks. So, yeah, it’s going to be pretty interesting.

We’re going to do a lot of studies too just we always want to back up with huge science credibility, all these claims, but I assure you will be doing studies to look at the different dosages, different products and how if we take one or two or three how that impacts us individually and as a big population as well?

Justin Meiklem

That’s great. The first comment tonight Ilan was a warning about you and your VINIA and caffeine levels with the new coffee. So I think it was — I think it was [indiscernible] from Germany. And maybe Ilan, thanks, Brian. Can you comment on corporate financing update?

Ilan Sobel

Yeah. So we’ve actually, I must say, I’m very, very happy. We’ve had a very successful run, the last six weeks from a corporate financing perspective and been able to bring a lot back into the treasury, which is very important for the next six months on this road to as we’re trying to drive profitability by the end of the year. We’ll be making some announcements shortly on that. I think what’s been very clear to me is, just investor sentiment and belief in the technology, in the strategy that we’re deploying, very cautiously how we utilize capital and really maximizing the return on all the capital that we’re deploying. This is really important in the market environment like we have right now.

And then just a real strong appreciation on the magnitude of the opportunity that we have. And I think today is hopefully for our shareholder partners, you have the same sense of understanding of the magnitude of opportunity how you can take literally one core product and through leveraging different delivery mechanisms, go in and disrupt multiple different categories because at the end of the day, all of these categories, people are looking for health and wellness. People are looking for overall functionality, right? And they’re looking for science, and they’re looking for credibility and we can bring that to the table.

So I think when investors start to see that and then they understand that we have a platform technology and there’s about 500,000 other plants out there, and they also have visibility of what we’re bringing to the market with our unique olive cell product, POMegranate cells. We’ve been I’ve been really, really happy and a sense of, strong sense of reward and recognition. And that reward recognition has come from serious investment, which will be millions of dollars that have come into the treasury that will be making a lot, making announcements and that visibility on very, very shortly.

Justin Meiklem

Yeah. So maybe just a few more questions, Ilan, or coming up to 90 minutes here.

Ilan Sobel

Yeah. Sure.

Justin Meiklem

Yeah. Next one, a few people — some questions about the pause in cannabis. Just status update and if it’s — if there’s any change in that since the last quarter.

Ilan Sobel

Yeah. No problem. Look, I must say on reflection and I think about it all the time, I think the decision we made in February was the best decision for two reasons. Number one, look what we’ve done. Just without this pipeline that I’ve just shared with you today, just the ability to execute scaling up a manufacturing facility and then you overlay now what we’ve been able to do as a team around the R&D development, the marketing work to go out and disrupt major billion dollar categories that are similar sizes to the cannabis category, right? So that’s what focus allows you to do. We also — we’re able to do it with deploying much less capital and capital is so scarce.

And then, thirdly, if you follow what’s going on in the cannabis market, it’s not getting better, right and nobody has that line of sight. So we’ll continue to execute our strategy. We’ll sit on the sideline. Just see what happens. We continue to do work on the actual pharmaceutical side. We’re doing more R&D in that space. But I really feel that we made a tough decision. I definitely have a lot of sleepless nights over that, but I really feel very, very grounded in the direction, because I don’t think we’d be looking at profitability. It wouldn’t have gone down that path, profitability wouldn’t be coming for a long time just for all the reasons.

In the marketplace, use of capital, et cetera, et cetera. Now we have an opportunity with where we’re going, our core VINIA is doing amazing well. I think it’s very important. One thing to say, Justin, is that don’t get, for our investor partners, yes, this new innovation is game changing, and we will disrupt one of these categories for sure. I have the confidence in that. But don’t lose sight of the power of our core VINIA, nutraceutical product.

It’s an amazing product, and we haven’t even, started the growth process, $8 million, I’ll be happy when I’m sitting on $800 million of Core VINIA, that we’re selling across the business. In addition to obviously all the other categories that we get into. We can walk and chew gum at the same time and that’s the power of being an e-commerce business. We’re working with manufacturing partners that, for example, we’re working with Bevnology (ph), and actually I failed to mention this. I got so excited.

On the beverage side, we’ve done a lot of R&D work actually, it’s been amazing. I had a chance to really reconnect with a lot of my friends from the Coca Colo world. And in fact, probably one of the best R&D guys at Coke used to manage Coke R&D in Europe back in the day. He’s our key R&D partner from Bevnology that’s helping us develop all the products on the VINIA hydration system.

So, when we look at those different products, they’re manufactured separately, literally, we’re just producing the VINIA powder. We’ve signed off all the formulations. It goes to a third-party and we’re manufacturing and then bringing it into the marketplace. So it’s not disruptive. We can focus just on putting, on producing more and more VINIA powder, making our bioreactors more and more efficient, increasing the size of the bioreactors and doing all the other things that we’re trying to do to reduce our cost of goods.

And the focus that the decision we made back in February that this has allowed us to do really is allowing us to build a much stronger financial base to grow the business. So I think all in feel really, really good about that decision. And then again, just in the context of what’s happening in the broader marketplace.

Justin Meiklem

Great. Thank you. I’m going to ask you two quick questions. And for everybody that there’s questions coming in, please, [email protected]. We will within a day or two, we’ll get you specific answers. There’s questions about peanuts. There’s questions, lots of stuff. Please send those directly to me. I’ll ask two more quick ones. And then you can have some closing comments on. First one is talking about walking into chewing gum, I guess. Does any of this VINIA commercialization impact, like, the timelines and the approaches that you’ve given for Olive, all about it.

Ilan Sobel

No. Absolutely not. We’re still — we’re making great progress at Olives. We’re working through all the key stages right now. We’re hoping that in September, we’re going to be able to give actual finished product to Mr. Brian, to Dr. Brian, to start the process of actually testing with a number of integrative medicine partners across a number of different key indications that we’re super excited about. We’re still looking at launching this in the second quarter of next year and that’s what we’re focused on. It’s a separate team. This is just the way we’re able to kind of prioritize within the business and make sure that we’ve got the right resource allocation.

Justin Meiklem

Excellent. This is a really good question. How do you see Dr. San Giovanni recent addition to the – for advisory board? How do you see him contributing to the business?

Ilan Sobel

Wow, Dr. San Giovanni is a powerhouse, just huge respect for what he’s done in his career. He’s extremely provocative in his thought processes. He’s really helping us think through how we — you probably heard me use the term that we’re leading this movement of change with Botanical Synthesis. We — because we’re now defining what we do as Botanical Synthesis, vis-a-vis chemical synthesis, which is what the pharma companies do, and vis-a-vis other types of synthesis.

We are leading that movement of change as it relates to Botanical Synthesis and he’s really pushing us into areas that we hadn’t thought of as it relates to our technology which is very, very provoking for us, which is good because as leaders, we really need to be challenged. And it just brings enormous pedigree, enormous credibility and actually amazing connections that can really help the company accelerate the work that we’re doing. I don’t know, Brian, if you want to comment as well on that?

Brian Cornblatt

I think we got really lucky and are blessed that we have him on our board. Something I think that came out in the press release for those who don’t know about him and just his capabilities, he was the Chief Scientific and Medical Director of two of the largest NAH Botanical studies that carried out. It’s AREDS 1 and AREDS 2. The homework assignment if you go to any corner grocery store or drug store, you’ll see AREDS products and that’s thanks to John Paul and another one of his colleagues.

They led both of those studies and it’s just — he has incredible connections. He’s a real mensch, as I like to say, both here in the U.S. and in Israel, it’s just a real person who dedicates his lives to helping humanity and that’s what I hope you can see Ilan, Justin and I, the entire BioHarvest team, we do this every single day. So it’s a perfect match, perfect synergy to bring him on board.

Ilan Sobel

Yeah. And he pushes the right buttons, which is good. He’s pushing us hard. It’s good.

Justin Meiklem

Good. So, yeah, so we’ve got people are very positive about the additional SKUs. Lots of comments about let’s get the valuation up, whether that’s institutional or exchange based retail investors. I think a great question to take people away with is what lots going on. What excites you the most?

Ilan Sobel

I think the first thing that I would say, like in GPU, we’d say that I’d lick that lights my candle, that lights my heart really is what we’re doing every single day to help people. And, like, one card can’t understand the magnitude of that unless you’re literally getting the reviews every day and you’re getting the feedback from people and a lot of the stuff you see in the reviews, and a lot of the reviews we get, I should say, we can’t publish.

And we can’t publish those reviews because they’re in the context of how our product like VINIA has been utilized in other treatments that are basically not in the space of where dietary supplements traditionally can play. They’re related to addressing much more fundamental health issues. And there’s a lot of amazing progress in that area.

So when you look at what we’re doing every single day to now tens of thousands of people impacting their lives, improving their quality of life, this is something that it keeps my energy going because this is not an easy job. It’s a heavy responsibility that I have, and I take very, very seriously together with my leadership team. And we’re working real hard in order to deliver on our objectives.

What I’m most excited about looking forward is really what I’ve shared with you today. We have an amazing innovation pipeline. The categories that we can go in and disrupt. And at the same time, I know that we haven’t even started on Core VINIA. So, the future is really something that we’re starting to see the ability to touch a little bit where we can be as a company starting to understand that the power of scaling, I start to see in the manufacturing facility when I look at the numbers, as we start to produce more, the costs come down and all of these things that builds positive inertia inside you.

But like ultimately, at the end of the day, what excites me is, at a big picture perspective, is that we are doing good every single day. We’ve got this amazing technology that’s bringing the power plant to people. And the world today is in a very challenging place. In many respects, big pharma has hit the wall across a number of different indications, and there are many players in the big pharma world who have great vision, have a lot of courage and are starting to also realize the need to go back to the plant.

And so what excites me ultimately and it’s all like building blocks, what excites me is that our company, one day is going to be at the forefront of developing the next generation of therapeutic solutions to address major, major indications starting with the plant. And what we’re doing now is just building the capabilities. Learning how to scale the technology. We’re getting better and better on our tissue culture. And we’re getting smarter and smarter to understand how to work through the regulatory frameworks.

And ultimately, this is going to prepare us, I believe, for something of a really grand proportion to be able to contribute to the world and we’re doing it all in a responsible way. You saw what I said earlier about the amount of capsules and just the fractionality of the land of electricity of the water. So we’re doing it as responsible parents and leaving the world in a better place for generations to come.

So I feel very privileged, Justin, to be where I am. I’m very appreciative of the patience of our shareholder partners that we have all of you in this journey. And I really think we’re making solid progress. We have a long way to go, but we’re making solid progress. We have an amazing leadership team. It’s taken three years to build this team. And I think, Brian and Justin, you see this as we meet every single week, the quality of the people, the quality of the technical skills that we have and how we solve a lot of challenges across the business.

And those key capability building blocks are being put in place. And that’s ultimately given all of our parts in the right place. And we’re focused on really hopefully delivering something significant as it relates to the therapeutic solutions as we look at taking VINIA to the next level and all the other products in the pipeline. So that’s pretty exciting as far as I’m concerned. I’m really happy to be part of this.

Justin Meiklem

Yeah. Thank you, Ilan. We just the last comment we got was from Bill. He said I’m an investor and customer. Thanks for the inspiring update. So he said it really well. Great job. Thank you for joining us. Thank you for joining us, Brian and Ilan. And again, for anybody, any investors, or media that are in Toronto next week, we will have team members there, including Dr, Brian Cornblatt, media and investors that are in London, England, Ilan will be there for a portion next week.

Ilan Sobel

If there are any UK investors and even, our friends in Germany, if you decide to make the trip, basically to the UK, I’ll find time to spend some time with you, but will make myself available for investors in those parts in the UK while I’m there for the probably 26 hours then I’m there. So — and same I’m sure with Brian and Justin being in Toronto.

Justin Meiklem

Fantastic, yeah, so thank you everybody for joining. I will have this packaged and shared today on both social and e-mail. Thanks so much, Ilan.

Ilan Sobel

Thank you for doing a great job in the dark.

Justin Meiklem

Stay well, everybody.

Ilan Sobel

Brian, I realized you’ve also got a great radio voice. It’s good.

Brian Cornblatt

I appreciate that. I’m learning from Justin.

Justin Meiklem

Thanks, everyone.

Ilan Sobel

All right. Thank you, everybody. I hope you enjoyed the update. Take care.