Else Nutrition Holdings achieves 34% gross margin, reduces cash burn below $200,000 as it positions for future growth and regulatory advancements.

Good morning and thank you for joining Else Nutrition Holdings' 2025 third quarter financial results and Business Update Conference Call on the call with us today is Hamital Yitzak, Chief Executive Officer of Else Nutrition. The Company issued a Press release on November 14th containing its 2025 third quarter financial results, which is also posted on the Company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. The company's management will now provide prepared remarks reviewing the financial and operational Results for the third quarter ended September 30, 2025. Before we get started, we would like to remind everyone that today's call will contain forward looking statements that are based on current assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those projected, and the Company undertakes no obligation to update these statements except as required by law. Information about these risks and uncertainties are included in the Company's filings as well as periodic filings with regulators in Canada and the United States, which you can find on Sedar and Else Nutrition Holdings' website. With that, we will now turn the call over to Hamital Yitzchak, Chief Executive Officer. Please go ahead Hamital.

Thank you, Alexandra and good morning everyone. The third quarter of 2025 represented a period of stabilization, focus and disciplined execution for Else Nutrition Holdings. We entered this quarter determined to build upon operational progress made earlier in the year, and I'm pleased to share that we delivered impressive results while continuing to position the company for sustainable, profitable growth. The transformation we delivered is not subtle. It is meaningful, measurable and foundational to the future of this company. Let me begin with what matters most. The strength of our financial turnaround in Q3 or gross margin surged to 34%, up from negative 9% a year ago and a negative 3.7% last quarter. This level of expansion reflects deep structural improvements across manufacturing, supply chain and cost management. At the same time, we reduced operation expenses by 68% year over year, bringing them down to 1.15 million from 3.56 to million. These reductions came from disciplined decision making, streamlined organizational processes and a firm commitment to focusing on value drivers. Perhaps most importantly, our monthly cash burn fell below 200,000, down from 1.15 million a year ago. That is one of the most significant improvements we've achieved as a company and it speaks directly to the sustainability of our operations going forward. Revenue for the quarter was 1.66 million compared to 1.79 million in Q3 last year. And while revenue softened due to temporary out of stock issues, we saw no indication of weakened demand. In fact, demand for our powder plant based nutrition portfolio and for our Kids Ready to Drink products remains strong across both online and retail channels. These supply constraints were temporary and we are already addressing them. We expect revenue to resume growth as inventories stabilize. These results give us confidence in our path toward cash flow breakeven between late 2026 and early 27. Behind these metrics is a tremendous amount of operational work. Throughout the quarter. Our teams executed this with precision. We simplified the organization, strengthened forecasting and logistics, realigned roles and responsibilities and built more accountability across every part of the business. Else Nutrition Holdings is now operating as a leaner, more agile and far more efficient company than it was even two quarters ago. As we continue to reduce our manufacturing costs both in the US and in Europe, we believe that we can sustain our growth margin improvement through 2026 and beyond. As our financial and operational foundation strengthens, we are now in a better position to advance one of our largest long term value drivers, our plant based infant formula. The regulatory landscape in the US Is evolving in a way that strongly aligns with our mission and technology. The modernization of infant formula standards, including developments tied to the financial year 2026 Agricultural Appropriations Bill and recommendations from the National Academies of Science, Engineering and Medicine, signals a clear recognition of the need for innovation. We are preparing for the next clinical phase required to bring our infant formula to market. This process is rigorous, but we are committed to it. We believe that families deserve cleaner, dairy free, scientifically sound infant nutrition and we intend to be a leader in shaping that category. At the same time, our strengthened financial position and operational momentum have accelerated interest from several international partners including major global nutrition and food companies. We are in active discussions regarding commercial distribution, coal manufacturing and R and D collaborations. While these discussions are still early, they speak volumes about the credibility of our brand, the quality of our science and the potential scale of our product portfolio. Overall, Else Nutrition Holdings is becoming a stronger, more disciplined and more scalable company. We have stabilized the business, transformed our cost structure, broadened our operational capacity and positioned the company for long term sustainable growth. Looking ahead, our priorities are clear. We will continue expanding margins, driving operational efficiency, supporting clinical and regulatory progress, strengthening our commercial footprint and pursuing strategic partnerships that can accelerate scale globally. At this point, I'd like to address questions that came in from investors. Alexandra, please lead the Q and A session.

Thank you Hamital. Our first question is can you elaborate on your regulatory outlook heading into 2026.

Sure. We remain encouraged by both legislative and scientific developments. The US market is moving toward modernized standards that better accommodate innovation and else is well positioned to benefit. Our goal is to initiate the next phase of clinical trials in the near term, paving the way for plant based infant formula category.

Thank you Hamital. Our next question is how are you approaching partnerships and or collaborations?

Well, we continue to explore strategic partnerships that could expand global distribution, accelerate R and D and strengthen our operational footprint. These opportunities represent a validation of our IP and market positioning.

Thank you. Our next question is can you explain the rationale and impact of Elk Nutrition's recent 10 for 1 share consolidation?

Of course. Effective November 6, 2025, we implemented a 10 for 1 share consolidation to simplify our capital structure and support the continued viability of the company. All shareholder ownership remains fully proportionate. Every 10 pre consolidation shares now equal one post consolidation share with no change to the total value of individual holdings. All outstanding options and warrants have been adjusted accordingly. This decision was not made lightly. After implementing extensive cost saving measures and working to preserve the business, a consolidation became an essential part of our broader restructuring efforts. We appreciate investors concern and remain committed to the company's long term stability and strategy.

Thank you Hamital. That does conclude the Q and A session at this point. I'll turn it back over to you for closing remarks.

Thank you Alexandra. In closing, I want to thank our employees for their dedication and agility, our investors for their continued confidence and our consumers for believing in the ELF mission. We are building something meaningful, a new standard for clean plant based nutrition and I am more confident than ever that Else Nutrition Holdings is on the right path to long term success. We are excited about the road ahead and look forward to sharing further progress in the coming quarters. Thank you for joining us today and for your continued support.

Thank you. Ladies and gentlemen. This concludes today's teleconference. Thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.