Diamond Equity Research Releases Update Note on BioHarvest Sciences Inc. (NASDAQ: BHST, CNSX: BHSC)
New York, NY, Dec. 02, 2024 (GLOBE NEWSWIRE) -- Diamond Equity Research Releases Update Note on BioHarvest Sciences Inc. (NASDAQ:BHST, CSE:BHSC)
Diamond Equity Research, an equity research firm with a focus on small capitalization public companies has released an Update Note on BioHarvest Sciences Inc. (NASDAQ:BHST, CSE:BHSC). The update note includes detailed information on the BioHarvest Sciences' financial results, operational updates, business model, management commentary, valuation, and risks.
The update note is available below.
BioHarvest Sciences December 2024 Update Note
Highlights from the note include:
- BioHarvest Expands Product Portfolio with VINIA SuperFood Functional Tea Line, Targeting $3.3 Billion North American Market: BioHarvest Sciences Inc. has launched a new line of VINIA® SuperFood Functional Teas, introducing four premium blends—Black Tea, Green Tea, Matcha Green Tea, and Cranberry Hibiscus Herbal Tea. This product line, infused with piceid resveratrol equivalent to one VINIA® capsule, builds on the success of VINIA® supplements and coffee, offering circulatory health benefits alongside enhanced taste and efficacy. Sourced from Rainforest Alliance-certified farms, the teas aim to disrupt the $3.3 billion North American functional tea market. The launch aligns with BioHarvest's "VINIA Inside" strategy, leveraging cross-category applications to attract younger consumers and drive higher gross profit margins.
- Sustaining Strong Growth Momentum with 101% Revenue Increase in Q3 FY 2024 - BioHarvest reported robust Q3 FY 2024 results, with revenue increasing 101% year-over-year to $6.5 million, driven primarily by a 128% growth in VINIA subscriptions. Gross margins expanded significantly to 57% in Q3 FY2024, compared to 45% in Q3 FY2023, benefiting from economies of scale, manufacturing efficiencies, and cost reductions. Gross profit grew by 157% to $3.7 million in Q3 FY 2024, compared to $1.4 million in the same period last year. We anticipate further improvement in gross margins as BioHarvest continues to optimize its production processes and benefit from increased scale. Operating expenses increased by 67% year-over-year to $5.8 million, reflecting expanded marketing efforts, costs associated with new product launches, and investment in the CDMO division. The CDMO division continued to gain momentum with two established clients and a strong pipeline of high-potential projects. Net loss was $2.7 million in Q3 FY 2024, compared to $1.7 million in Q3 FY 2023, due to an increase in operating expenses, particularly sales and marketing expenditure, in line with the company's growth strategy. Cash and cash equivalents as of September 30, 2024, totaled $2.8 million. Management guided for Q4 FY 2024 revenues of at least $7.2 million and anticipates achieving adjusted EBITDA breakeven in the second half of 2025, emphasizing confidence in its growth trajectory and operational scaling efforts.
- BioHarvest Sciences Debuts on Nasdaq Global Market Under the Ticker "BHST": Nasdaq Stock Market LLC has approved the listing of BioHarvest Sciences Inc.'s common shares on the Nasdaq Global Market, marking a significant milestone in the company's growth trajectory. Trading began on November 12, 2024, under the ticker symbol "BHST." The company's common shares will also continue to trade on the Canadian Securities Exchange (CSE). This dual listing is expected to potentially enhance BioHarvest's long-term shareholder value by increasing visibility, improving market liquidity, and broadening its shareholder base, supporting its strong position in the Botanical Synthesis technology sector.
- Valuation - BioHarvest has consistently delivered over 100% year-on-year revenue growth in the past three consecutive quarters, demonstrating strong momentum. The company anticipates sustained growth, driven by the expanding VINIA product line, including innovative functional beverages such as teas, alongside ongoing improvements in manufacturing efficiencies to enhance margins. By advancing its VINIA Inside strategy and leveraging its expanding portfolio of nutraceutical and functional beverage products, BioHarvest is well-positioned to potentially maintain robust revenue growth. Additionally, with its recent Nasdaq listing and a growing CDMO pipeline, BioHarvest is strategically positioned to drive potential long-term value creation. We have updated our financial model to reflect the latest financial results and re-evaluated our SOTP valuation methodology, reaffirming our valuation of $18.00 per share, contingent on the successful execution of the company's growth strategy.
About BioHarvest Sciences Inc.
BioHarvest Sciences Inc. specializes in botanical and cellular-based health solutions through its patented Botanical Synthesis technology, focusing on nutraceuticals, pharmaceuticals and CDMO services.
About Diamond Equity Research
Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms.
For more information, visit https://www.diamondequityresearch.com.
Disclosures:
Diamond Equity Research LLC is being compensated by BioHarvest Sciences Inc. (NASDAQ:BHST, CSE:BHSC) for producing research materials regarding BioHarvest Sciences Inc. and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however the views in the report reflect that of Diamond Equity Research. As of 12/02/24, Diamond Equity Research LLC has been paid $35,000 ($34,980 post bank charges) for research services, which commenced 04/30/24, payable in two installments for the initial year and not applicable to renewals. The first installment of $17,500 ($17,490 post bank charges) was paid within a month after signing the agreement. The second installment of $17,500 ($17,490 post bank charges) was paid after a management content draft version of the initiation of coverage report was provided electronically to BioHarvest Sciences Inc., but prior to the release of the actual initiation of coverage. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The issuer has not paid us for non-research related services as of 12/02/2024. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Although Diamond Equity Research company sponsored reports are based on publicly available information and although no investment recommendations are made within our company sponsored research reports, given the small capitalization nature of the companies we cover we have adopted an internal trading procedure around the public companies by whom we are engaged, with investors able to find such policy on our website public disclosures page. This report and press release do not consider individual circumstances and does not take into consideration individual investor preferences. Statements within this report may constitute forward-looking statements, these statements involve many risk factors and general uncertainties around the business, industry, and macroeconomic environment. Investors need to be aware of the high degree of risk in small capitalization equities including the complete loss of their investment. Investors can find various risk factors in the initiation report and in the respective financial filings for BioHarvest Sciences Inc. Please review update note attached for full disclosure page.
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