BioStem Technologies, Inc. (OTC: BSEM), a regenerative medicine company specializing in perinatal tissue allografts, reported first-quarter 2026 financial results, highlighting a strategic transformation following its acquisition of surgical and wound care assets from BioTissue. The company generated net revenue of $6.1 million for the quarter ended March 31, 2026, compared to $16.0 million in the same period last year and $10.1 million in the fourth quarter of 2025. The decline reflects the company's pivot toward hospital-based sales, which accounted for approximately 87% of total revenue, or $5.4 million, while physician office revenue contributed $0.8 million.
Gross profit was $3.8 million, representing a gross margin of 61%, down from 97% in the fourth quarter of 2025 and 95% in the first quarter of 2025. The sequential decrease is attributed to the mix shift toward Neox® and Clarix® products, which are subject to a cost-plus markup under the current manufacturing supply agreement. The company expects gross margin to improve significantly upon completion of the planned manufacturing technology transfer in 2027.
Operating expenses totaled $12.6 million, compared to $17.3 million in the fourth quarter of 2025 and $9.9 million in the first quarter of 2025. The sequential decline was driven primarily by bad debt expense recorded in the prior quarter, partially offset by costs from the acquired workforce and expenses related to the BioTissue transaction and uplisting process. GAAP net loss was ($8.8 million), or ($0.52) per share, compared to net income of $3.9 million, or $0.23 per share, in the first quarter of 2025. Adjusted EBITDA was ($5.7 million), versus $7.8 million a year earlier.
“The first quarter of 2026 marked the beginning of a strategic transformation for BioStem, as we completed our acquisition of the surgical and wound care assets from BioTissue and repositioned the company as a fully integrated, hospital-focused commercial organization,” said Jason Matuszewski, Chairman and CEO of BioStem. “We believe that our achievements in the first quarter have built a foundational platform from which we can deliver durable growth over the long-term.”
The company expanded its direct sales force to 35 representatives, up from 18 at the close of the BioTissue assets acquisition, and strengthened its leadership team with the appointment of Katherine Gorrell as Chief Legal and Compliance Officer. Additionally, BioStem retired outstanding debt with GMA, resolving two promissory notes with an aggregate principal amount of $3 million and accrued interest of $2.3 million.
On the capital markets front, BioStem completed audited financial statements for 2024 and 2025 during the first quarter and is progressing toward a planned Nasdaq uplisting. The company expects to provide updates as additional milestones are reached. As of March 31, 2026, cash and cash equivalents totaled $13.7 million, compared to $29.5 million at the end of the fourth quarter of 2025.
For full-year 2026, BioStem expects revenue in the range of $25 million to $29 million. In the second half of the year, with continuing integration of the acquired BioTissue assets, expansion of its salesforce, and execution of its strategic plan, the company anticipates sequential growth in the hospital business. As the physician office market stabilizes, BioStem expects sequential revenue growth in that segment in the second half of 2026.
The company plans to host a conference call and webcast on May 14, 2026, to discuss the results further.
