BioStem Technologies, Inc. (OTC: BSEM), a regenerative medicine company specializing in perinatal tissue allografts, reported its financial results for the first quarter ended March 31, 2026, revealing net revenue of $6.1 million and a strategic pivot toward the hospital market following its acquisition of BioTissue's surgical and wound care assets. The company also highlighted progress on its capital markets strategy, including the completion of audited financial statements for 2024 and 2025, as it moves toward a planned Nasdaq uplisting.
Net revenue of $6.1 million for Q1 2026 was down from $10.1 million in the fourth quarter of 2025 and $16.0 million in the first quarter of 2025. The decline reflects the company's transition to a hospital-focused commercial model, with hospital revenue accounting for approximately 87% of total revenue, or $5.4 million, driven by sales of its Neox® and Clarix® products. Physician office revenue contributed $0.8 million.
Gross profit was $3.8 million, representing a gross margin of 61%, compared to 97% in Q4 2025 and 95% in Q1 2025. The sequential decrease in gross margin is attributed to the mix shift toward Neox® and Clarix® products, which are subject to 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, down from $17.3 million in Q4 2025, primarily due to reduced bad debt expense, partially offset by costs from the acquired workforce and expenses related to the BioTissue transaction and uplist process. GAAP net loss was ($8.8 million), or ($0.52) per share, compared to net income of $3.9 million in Q1 2025. Adjusted EBITDA was ($5.7 million), compared to $7.8 million in the year-ago period.
“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. “To best leverage these new resources in alignment with what we see as our most attractive market opportunity, the majority of our focus is now being prioritized on the hospital market.”
During the quarter, the company expanded its direct sales force to 35 representatives, up from 18 at the close of the BioTissue acquisition, and strengthened its leadership team with the appointment of Katherine Gorrell as Chief Legal and Compliance Officer. It also retired outstanding debt with GMA, resolving two promissory notes with an aggregate principal of $3 million and accrued interest of $2.3 million.
BioStem expects full-year 2026 revenue to be in the range of $25 million to $29 million, with sequential growth anticipated in the second half of the year as integration of the acquired assets continues and the physician office market stabilizes. The company also plans to provide updates as it reaches additional milestones toward its Nasdaq uplisting. More information is available in the company’s newsroom at https://tinyurl.com/bsemnewsroom.
