Should we go ahead? Okay, thank you everyone for attending our conference today. I'm Susan Anderson, one of Canaccord Genuity's analysts in the consumer space, and we're very excited to have here BioHarvest and in particular to host CEO Ilan Sobel. Ilan, I'll turn it over to you to tell us more about BioHarvest and the amazing products.
Thank you, Susan. Wow. Oh, they've started the clock already. Jeez. Okay. I thought we start early, we get some extra time. Okay. Good afternoon, ladies and gentlemen. Nice to meet you. How do I click here? Oh, it's here. Got it.
Right there, yeah.
Okay, great. Can we start the clock again? We got some extra time, right? Can we start it again? Thank you. Okay. Forward-looking statements. How many of you here have heard about BioHarvest Sciences? That's good. At least there's some knowledge. That's great. Who are we? We are the global leader in plant cell biology. There is no company out there that has the capability like we do to unlock the secrets of 500,000 plants that were given to us and to be able to bring this treasure to the world and be able to bring the unique phyto-medicinal compounds, phytonutrients that plants produce to millions of consumers in a way which is consistent, economically viable, and where we have unique IP and patents. We have a very strong executive team. The company was founded in 2007. We've been doing this for 17 years. We are a mature technology company.
Today, the company has two major divisions. We have a consumer, direct-to-consumer, consumer goods business unit, as well as a CDMO business unit, which I'm going to talk more about. We are a revenue company. We have sold more than $60 million of our VINIA, red grape cells, circulation superfoods since coming onto the U.S. market in May 2021. Our CDMO business is gaining significant momentum with three major contracts to develop life-changing compounds. Let's go straight to the north star of the company. What brings us to work every single day? This is really anchored in our maniacal focus to discover, develop, manufacture, and democratize life-changing compounds from plants that can improve the health and wellness of hundreds of millions of consumers, but do this in a way that preserves the planet for generations to come because sustainability is at the core of our technology.
Today, we solve three major problems of why pharmaceutical companies walked away from the plant kingdom 50 years ago. There were three reasons. Reason number one is plants produce phytonutrients and phyto-medicinal compounds in an inconsistent way. Pharma needs consistency. Our technology can produce phytonutrients, phyto-medicinal compounds with a predictable and consistent, with unique predictability and consistency. The second reason is anchored in the fact that the really important phytonutrients or phyto-medicinal compounds in plants that are critical for our health and wellness are found in such minute levels. In order to be able to commercialize them at an industrial scale, you've got to grow a lot of plants. It's just not economically viable. Our technology magnifies the levels in a non-GMO way of these critical phytonutrients to make it economically viable. The third reason why pharma walked away from the plant kingdom was you can't patent nature.
With our technology, we have unique patents, process, composition, utility. We're able to address these three major issues. We solve them, and as a result, today, ladies and gentlemen, we as a company, I'm proud to say, are the critical bridge between the plant kingdom and industry. A bridge that can unlock the treasure that exists in 500,000 plants in a way that the world today can use these plants and the phyto-medicinal compounds in order to develop the next generation of science-based therapeutic solutions all the way through to the next generation of non-nutritive natural sweetness in a way which is economically viable and preserves the planet for generations to come. I want to talk first about the technology. First, help you understand how we do what we do in a very simple way.
Then I'm going to help you understand how we apply this technology across two business units. As a company, we're very unique because of the optionality that we bring to our investor base as we apply this technology across two business units. First, let's talk about the technology. Three words: mirror, magnify, and multiply. That's what we do with our cells. We start with the plant once, just once. We know exactly where are the cells from the plant that produce the critical phytonutrients. We take those cells and we get the cells to do two things. We get the cells firstly, as a result of us changing the food we feed the cells, the lighting, the temperature, and a number of other variables. We get the cells to, one, mirror the production of the exact same phytonutrients or phyto-medicinal compounds that the plant produces.
Two, we focus on one molecule that we will increase by an order of magnitude. We call this magnification. For example, in our red grape cell circulation superfood that we sold $25 million of last year, and with our second quarter results of $8.5 million U.S. dollars, which we announced yesterday for the quarter, with a run rate now of $34 million, we took the red grape, we took cells from the skin, from the actual flesh, and from the seed. We did thousands of experiments changing all the different food we feed the cells, the lighting, the temperature, et cetera. We were able to get the cells to produce catechin, quercetin, anthocyanins, and tannins, plus piceid resveratrol. Now, piceid resveratrol, we magnified 100 times more versus what's found in the red grape. Piceid resveratrol is the gold standard of resveratrol.
You may have heard of resveratrol as an important compound that's used across basically longevity. We produced the Rolls-Royce, the gold standard called piceid. We happen to be the only company in the world that can produce piceid resveratrol at literally an industrial scale because we magnified the levels 100 times versus what's found in the plant. Piceid resveratrol is 25 times more soluble than regular resveratrol. Piceid resveratrol lasts in the body for 12 hours. Regular resveratrol is in and out the body in 2 hours-3 hours. Today, we're the only company in the world that produces piceid resveratrol at a global industrial scale because of the magnification. Plus, we have the mirroring with all the other phytonutrients where you have all the polyphenols working together like an orchestra perfectly to give you this improved health and wellness.
At this stage, we lock the cell bank and we never go back to the plant. We figured how to get these cells in a petri dish to grow in industrial-scale bioreactors, the largest one-way bioreactors in the world at 1,200 liters. We realized that plant cells are like human cells. They have memories. We figured out a unique way to strengthen, condition our cells to be able to make them tough enough to go from a petri dish into this big bioreactor with sheer forces and for the cell to survive, to multiply. In 18 days- 21 days, the cells multiply. We harvest the cells after they've elicit the phyto-medicinal compounds. We're left with a rich blood, rich mud, no insecticides, no herbicides, no fungicides, no solvents. We simply dry this rich mud into our final red grape cell powder, which is capsulated.
We have total control from cell to capsule. This is the unique process that we've been able to do across multiple plants. This is a platform technology. I have here samples of our olive verbascoside cells where we produce the highest levels of verbascoside in the world. Verbasco side is one of the most potent anti-inflammatory polyphenols that's able to improve, and we've done existing in vitro work to show that this material is able to significantly reduce the fat levels in human liver cells. It's going to be us focusing in the whole area of liver health. Think 100 million Americans today have non-alcoholic fatty liver disease. We have a platform technology for mirroring, magnifying, and multiplying at the greatest industrial scale. It's non-GMO. We do not in any way change the RNA, DNA, the molecular structure. We have unique consistency. We have patents.
We have optimal bioavailability, environmental sustainability, the purity, the control, economic viability, and non-GMO. This technology is used in two businesses. We have a direct-to-consumer health and wellness business unit where we created an e-commerce machine that today is the driver of our, you know, 12 months run rate, $34 million of our VINIA red grape cell circulation superfood. For us, it was a proof of concept of the power of the technology. This is a cash business. It's 90% subscription, 24-hour cash turnaround. This business today operates at a 60% gross profit margin. With scale, we will move it to 65%. By the way, that's delivered direct to the consumer, to your doorstep, right? 60% gross profit margin. It has an earnings multiple of 15 - 20 times. You have the CDMO business, which we opened up 16 months ago.
We did that because we had enormous credibility that we created in the industry by what we had built with our direct-to-consumer business. The CDMO business is the future of the company. It's a 70% plus gross profit margin, earnings multiple of 40, at least 40 times. Today we have three major contracts already in the CDMO business. You have, ladies and gentlemen, a very unique company, what we call a fast biotech company with unique optionality. It's not binary. We have unique optionality where we take our proprietary technology, mature, 17 years in the making with a manufacturing facility. This is really important. If you leave here with one key nugget, we have today a manufacturing facility that produces 25 tons of this material. That facility costs us $5 million to build. We sell this material for $2,800 a kilo.
With a one-time CapEx of $5 million, on an annual basis, we can produce $65 million of revenue. That is software economics in biotech. We have that facility fully digitized, and we can scale that facility into multiple facilities as we grow the business from a geographical perspective with a return on capital that's unique for the industry. As we grow our direct-to-consumer footprint and importantly, the CDMO business with billion-dollar life-changing compounds that we're developing, which are going to need to be manufactured across the entire globe. Today, the biggest challenge with biotech companies is getting them to literally increase their biomanufacturing footprint. We do not have that issue, and we have an amazing return on capital. Let's first talk about direct-to-consumer business. This is VINIA. I'm going to move very quickly through this. We are the king of blood flow.
Basically, today, 4.7 out of 5 verified ratings, more than 9,930 reviews. We talked about the power of our piceid resveratrol versus regular resveratrol. The rest of the market is regular resveratrol. We are the only ones with piceid because we magnify the levels. Okay, good. How does it all work? We're a science-based company, multiple clinical trials, double-blind placebo, published in peer-reviewed scientific journals. In a $56 billion supplement business in the U.S., there are probably 10 companies I can count them on my hands who are science-based, who do clinical trials, and spent double-blind placebo, published Helsinki Convention. We did a clinical trial. We demonstrated one capsule a day for 90 days of our VINIA. We were able to significantly increase the dilation of your arteries, and more arterial dilation means more blood flow.
Ladies and gentlemen, blood flow is the most critical part of your body's operating mechanism. If you don't have good blood flow, you're in trouble. It's not just your circulation system. It's all of your systems. With more blood flow, you have more oxygen and nutrients flowing to the body, tissue, cells, and organs. You have more physical energy. More blood flow to the brain, specifically VINIA, gets below the blood-brain barrier. We have more oxygen to the peripheral part of the brain, increased removal of cellular toxins, goodbye brain fog, more mental alertness. Who in this room has brain fog? One in three Americans have brain fog. You get on our product, on VINIA, goodbye brain fog because you've got more oxygen and removal of cellular toxins.
Because of this, and the mechanism of action is we all have in our body 60,000 miles of arteries, capillaries, veins, and capillaries, 60,000 miles. You want those 60,000 miles running like four-lane highways like you have here in the U.S. of A, not like little roads that we have where I come from. Ultimately, if you have that arterial dilation and more blood flow, it's a game, absolute game changer. Physical energy, mental alertness, we are able to maintain blood pressure within already normal levels. We reduce oxidative damage to cells, and we reduce the oxidation of LDL cholesterol. The mechanism of action is about those 60,000 miles. We increase the nitric oxide. What happens is the VINIA gets quickly solubilized because we have such high solubility. It takes 20 minutes to work through the membrane into the blood plasma.
Once it hits the plasma, we're able to significantly increase the nitric oxide that's produced locally by your endothelial cells. As you get older, your body produces less nitric oxide. Nitric oxide is a vessel dilator. We increase the nitric oxide, and we reduce the levels of ET1, which is a vessel constrictor, which your endothelial cells produce more of as you get older. Because we increase the good stuff, we reduce the bad stuff. You have this amazing dilatory effect on your arteries and the power of blood flow. We took this, and our innovation agenda was very unique. We leveraged it across multiple billion-dollar categories with uniquely differentiated propositions where we bring superior science, superior efficacy, and superior taste to the consumers, bringing premium propositions in these markets where consumers are willing to pay more for better-for-you health and wellness.
We have, for example, our core business, which is around capsules and our chew product. We launched a superfood coffee today with the most premium coffee in the U.S. market. I'm very happy to say that these are the two hardest working SKUs. More than $3 million of these two SKUs in the last 16 months with limited marketing spend because consumers, they want better blood flow. When it comes to coffee, Americans drink three or four coffees a day. Now, with our VINIA Superfood Coffee, where each coffee K-cup has the equivalent of one capsule inside each K-cup with amazing tasting 100% Arabica coffee, you get your caffeine kick, and then you've got energy all through the day because of the effects of blood flow. Because the piceid resveratrol lasts in your body for 12 hours with a peak after one hour and a peak after five hours.
In decaf, you get all the energy you need with no jitters and no crash from blood flow. At $2 a K-cup, we sell a lot of K-cups because consumers are looking for better-for-you wellness propositions that taste good and have real-life science behind them. Same thing we've done in the tea category. We launched our teas, four teas, earlier this year, and we're about to go crazy in the $16 billion hydration category. Who here drinks Liquid I.V.? Don't be embarrassed. Put your hands up. Who drinks LMNT? Who drinks another powdered electrolyte product? Most people today are drinking these products, and they're all anchored in electrolytes, right? If you think about it, to have good hydration, it's not just about putting fluid and electrolytes in your body.
You got to get those fluid and electrolytes to all your trillions of cells and your muscles and your tissues in your body. To do that, you need to have good blood flow. We're launching VINIA BloodFlow Hydration Solution. It's not final packaging. The product is amazing. 25 calories. All the electrolytes are natural, naturally sourced. Sodium is Irish sea salt. Potassium comes from coconut water powder and the magnesium from the bed of the ocean. It's a game changer in the marketplace. Watch out for a $16 billion industry. We're going to do the same playbook on olives and the same playbook on pomegranate. Now I want to talk to you about the interesting part of the business now that you understand the technology and you understand the application in the direct-to-consumer business.
Because of the scale and the disruption we're building in the direct-to-consumer business, we can today walk into any pharmaceutical company, cosmetic company, nutraceutical company, nutrition company, and talk to them about our technology and how our technology can be that critical bridge between the plant kingdom and the next generation of life-changing compounds for their businesses derived from plants. That's all we've done. Pharma, biotech, nutraceutical, cosmetic and fragrances, nutrition and sweeteners. The way it works is we have three services that we provide. The first is discovery, second is development, and the third is the royalty-based manufacturing partnership agreements once we've developed the compound. I'm going to talk a little bit about the process. If you're a company like Tate & Lyle, who we have a strategic partnership with—who knows Tate & Lyle here? Great. Biggest sweetener company in the world.
Tate & Lyle scoured the world looking for the next generation of non-nutritive natural sweetener. Who drinks Stevia here? Who uses Stevia? Who likes Stevia? Okay, now you know why Tate & Lyle was looking for the next generation of non-nutritive sweetener because Stevia has berries from a taste perspective. They scoured the world and they found a few plants in remote locations which had sweet proteins. Those sweet proteins needed to be, looking at you, sir, magnified. Good answer, okay? They needed to be magnified. They came to us because we're the company that has that critical technology that bridges the plant kingdom and industry. We signed an agreement with them. They knew exactly what plant to start with because they did all the work. We moved them straight into stage one.
Stage one is when we do the tissue culture work where we mirror and magnify in a petri dish. That's $500,000. For a pharma company, that's like a big night out in Vegas for their sales force. We can develop the next billion-dollar life-changing compound for them. When we're successful after stage one, we then have to go through the process where we condition and we teach the cells how to grow in large, small, in liquid media, in small and large-scale bioreactors. It's $1 million for stage two, $1 million for stage three. We've never failed technically after we've been successful in stage one to go to stage two and stage three. All up, it's $2.5 million- $3 million to go from plant to final molecule being produced at industrial scale ready for the royalty-based manufacturing agreement. It's literally a period of 18 months- 27 months. It's fast, right?
At the end of the process, the customer, the partner, they get all the intellectual property rights for the composition, and we maintain the rights for the manufacturing. It's a unique business model. If you're a company, and I was working with a company recently, a pharma company that was looking at leveraging the power of the plant kingdom for the next generation of therapeutic solution for asthma, they don't know their blind spots. They asked us to do the work. We have a unique module called Discovery where we do all the AI work, and we basically work through a process of looking at all the plants in the plant kingdom, the compounds which focus on that indication. We understand where the tissue culture work has been done or not, and we recommend two or three plants for them to take into stage one. It's $35,000 - $50,000.
It takes our computational plant cell biologists a couple of weeks. Depending on who the company is, we have the right entry strategy into our system. Ultimately, at the end, we're royalty-based relationships where we scale manufacturing. Clear for everybody? Good. All right. Today, you can see the platform is mature. We've already developed multiple compounds. We have our red grape, and olive. We have three major contracts. Contract number one is a NASDAQ-listed pharmaceutical company with an approved drug. I cannot tell you anything more. I'm under NDA. You'll have to tie me up in the room, punch me, beat me up. You're not going to get anything more out of me. This company utilizes a unique biological material that from a supply chain perspective is very challenged from a geopolitical sensitivity perspective.
They also deal like another 160 companies like them with the gods of the earth and climate change and dealing with consistency and pricing stability. They had to own and control the most critical biological material that fed as an API into their drug. They came to us. This contract now is at stage two. We showed in stage one we could produce this biological material. Now we're training those cells to be able to do this in liquid media. We'll take it to stage three, and then we will move this to a royalty-based relationship. The second agreement we talked about is with Tate & Lyle, and we covered this already. The third agreement that we have is with a major entrepreneur who's going to disrupt the fragrance market.
There's a certain segment in the fragrance industry, $16 billion segment that is a fragrance derived from a biological material from a tree. That tree today will be extinct in 20 years. When you take that material, you put a flame to it. It causes a great aroma. We believe we can produce that material. That material today sells for $6,000 a kilo. Here are three examples, and we have a pipeline, rich pipeline, five companies: Pharma and Health, one in Food, two in Nutraceuticals, one in Cosmeceutical that we're now moving through our pipeline.
The way it works is we believe for every 10 projects we bring in, we can develop and get through all the way through a 40% success rate, 4 out of 10, which means every 10 that come through, we have billion-dollar compounds that work all the way through to final completion for the royalty-based relationships. What it means in NRE is $1.6 million where we make money at every one of those stages. It's $1.6 million. You've got $16 million from 10 projects working through the system, and then you have the royalty-based relationships where we're ultimately focusing on royalties at more than 70% of gross profit margin. We are a company that knows how to execute. We've delivered on our guidance quarter on quarter. We've significantly grown gross profits across the business. You can see from 32% to 60% in two years.
By the way, that has been done on no price increase. This is a subscription business. VINIA today is $99 for three months. That's our core package. When we launched in May 2021, it was $99 for three months. This is not margin expansion through price. We're a company that wants to democratize life-changing compounds. If I'm taking margin, that's against the north star of the company, incongruent with our values. We've held our pricing for four years, and we'll continue to do that. That gross profit margin has been driven by maturity of the technology, scaling. We're a cost-focused company from a value system, and we'll move that up to 65% gross profit margin over the next 18 months- 24 months.
The company, from a financial perspective, has been clear to the market that we will get the company to a positive adjusted EBITDA position by the fourth quarter of this year. We've shown the ability to improve our adjusted EBITDA quarter on quarter. As I said, we know how to execute and deliver what we said that we would do. As you look at us as a company in finality, you have to look at a company that's unique to the industry. This is fast, fast biotech. It's biotech with unique optionality. Optionality across multiple verticals. Within each vertical, the direct-to-consumer vertical, you have optionality across different compounds. You have optionality across the different businesses: coffee, tea, hydration, traditional supplements.
In the CDMO, you have literally a company that today has major billion-dollar contracts that we're working towards executing on and a rich, rich pipeline of companies coming through that ultimately are understanding the power of our technology and the need to go back to the plant kingdom and to be able to unlock the secrets that exist in the plant kingdom because finally, finally, you have a company that's able to solve all the three problems of why industry walked away. That is why we're going to deliver on our north star, ultimately of democratizing life-changing billion-dollar compounds to improve the lives of hundreds of millions of people by doing this in a way that preserves the planet for generations to come. I'll stop now. If there's any questions? No questions? Thank you.
It wasn't that comprehensive. Yes, sir?
I want to know, have you ever worked with Mariola and Mariola's benefits?
I'm not deep into the science, but what I will tell you is that VINIA is totally anchored on a maniacal focus from a mechanism of action perspective that is related to arterial dilation and blood flow. Anything that's linked to blood flow, we see a meaningful impact from VINIA. That's really the core. The mechanism of action is different compared to resveratrol. Obviously, we have a very unique mechanism of action that we've demonstrated in clinical trials. There's no company that's able to increase nitric oxide and reduce ET1 at the same time, which is why we have such a unique compound.
When I take VINIA, I'm about to cough again.
This is the reality of, as I said, the importance of blood flow. Today, we live in a stimulant world. We take stimulants in order to get that kick. Ultimately, if we preserve what we're given physiologically, what God gave us, at least from where I come from, right? What God gave us, and we preserve it, utilizing the power of the plant kingdom, which is also what we've been given. Unfortunately, what's happened in the last 100 years, we've just abused the plant kingdom. We've abused the plant kingdom instead of using the plant kingdom. All the treasure exists there. VINIA is just a great example. Thank you for bringing that and your experience to the team here.
VINIA is just a great example of how we've utilized the treasure that exists in plants that in the past could not be leveraged because, for example, the piceid level is so minuscule inside red grapes. You've got to literally, in each capsule, you have the same amount of piceid resveratrol as 1,000 red grapes. That's a lot of red grapes to drink every day, to eat every day. With sugar, you're going to have type 2 diabetes, right? What we're able to do is we increase the good stuff. We suppress the bad stuff, which is why in each VINIA capsule, you have the same amount of piceid resveratrol as 1,000 red grapes, no sugar, and obviously no calories and no alcohol. We're able to leverage the treasure that exists in the plant kingdom in a way that physiologically is right for our bodies.
Caffeine, specifically synthetic caffeine, was not built that way, right? Obviously, everything in moderation, where in the case of piceid and blood flow, it's a unique part of our physiological function. Just a great example of how the plant kingdom can really change people's health and wellness. That's what we're trying to unlock every single day in a way which is scalable, in a way which is economically viable, and obviously for companies that are partnering with us where there's patents. Great. Thank you very much.
Thank you.