BioStem Technologies, Inc. (OTC: BSEM), a regenerative medicine company focused on perinatal tissue allografts, reported first quarter 2026 financial results, highlighting a strategic shift toward hospital-based markets and continued progress on its Nasdaq uplisting.
Net revenue for the quarter ended March 31, 2026, was $6.1 million, compared to $10.1 million in the fourth quarter of 2025 and $16.0 million in the first quarter of 2025. Revenue was primarily driven by sales of Neox® and Clarix® products. Hospital revenue represented 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 reflects a mix shift to the 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. 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 negative $5.7 million, versus positive $7.8 million in the year-ago period.
BioStem made significant strides in its strategic transformation during the quarter. The company expanded its direct sales force to 35 representatives, up from 18 at the close of the BioTissue assets acquisition. It also retired outstanding debt with GMA, resolving two promissory notes with an aggregate principal amount of $3 million and accrued interest of $2.3 million. Additionally, the company strengthened its leadership team with the appointment of Katherine Gorrell as Chief Legal and Compliance Officer.
“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 expanded our presence across hospital-based settings, increased exposure to commercially insured patients, and made strong progress on key priorities including commercial integration.”
On the capital markets front, BioStem completed its audited financial statements for 2024 and 2025 during the first quarter, a key step toward its planned Nasdaq uplisting. The company said it expects to provide updates as additional milestones are reached.
For the full year 2026, BioStem expects revenue in the range of $25 million to $29 million. The company anticipates sequential growth in the hospital business in the second half of the year, driven by continued integration of the acquired BioTissue assets, sales force expansion, and execution of its strategic plan. The physician office market is also expected to stabilize and show sequential revenue growth in the second half.
As of March 31, 2026, cash and cash equivalents totaled $13.7 million, down from $29.5 million at the end of the fourth quarter of 2025. For more details, the company's newsroom is available at this link.
