GlobeNewswire

BioStem Technologies Reports Fourth Quarter Revenue of $11.5 Million, 14-Fold YoY Increase

-Project Continued Growth from Sales of AmnioWrap2 ®

-Financial Results Conference Call and Webcast on Monday, April 1, 2024 at 4:30 pm EDT-

POMPANO BEACH, Fla., April 01, 2024 (GLOBE NEWSWIRE) — BioStem Technologies Inc. (OTC: BSEM), a leading regenerative medicine company focused on the development, manufacture, and commercialization of placental derived biologics, today reported financial results for the fourth quarter and twelve months ended December 31, 2023.

Jason Matuszewski, CEO of BioStem, commented, “BioStem had an outstanding fourth quarter. Revenue reached $11.5 million, nearly 14 times higher than revenue of roughly $0.8 million for last year’s comparable quarter. This growth was driven by the successful commercial launch into the private office setting of AmnioWrap2, our innovative placental-derived allograft product designed to address a broad spectrum of wound applications. The launch was supported by the fourth quarter publication of local MAC (Medicare Administrator Contractor) pricing by CMS (Centers for Medicare and Medicaid Services). Gross margin reached 95% of revenue compared to 84% last year, reflecting the increase in sales and the benefit from our distribution agreement with Venture Medical.”

“The increase in revenue reduced our operating deficit and we ended the year nearing financial breakeven. With national distribution and acceptance by the medical community driving demand, we entered the new year with good momentum and project another year of strong growth in 2024.”

Fourth Quarter and Full Year 2023 Financial Highlights

  • Net revenue grew 1,355% year-over-year to $11.5 million in the fourth quarter.
  • Gross profit was $10.9 million, or 95% of revenue, in the fourth quarter.
  • Adjusted EBITDA income was $1.67 million in the fourth quarter of 2023 compared to Adjusted EBITDA loss of ($0.78) million in the fourth quarter of 2022.
  • For 2023, Net revenue increased 143% year-over-year to $16.7 million. Gross profit was $15.4 million, or 92% of revenue.
  • Adjusted EBITDA loss was $(0.30) million in 2023 compared to Adjusted EBITDA income of $0.94 million in 2022.

2023 Operational Highlights

  • Acquired Auxocell Laboratories Assets, a leading solid tissue processing equipment manufacturer.
  • Completed a nationwide launch of AmnioWrap2 with distribution partner Venture Medical LLC.
  • Initiated a clinical trial for a study evaluating Vendaje in diabetic foot ulcers (“DFU”).
  • Executed an agreement with NovaBay for the commercialization of the Avenova Allograft™ optic allograft.
  • BioStem’s full product portfolio was listed with the U.S Department of Defense and Veterans’ Administration.
  • Successfully obtained Q-Code and CMS reimbursement for Vendaje AC ® and AmnioWrap2.
  • Appointed two industry leaders to the Company’s board of directors.

Fourth Quarter and Full Year December 31, 2023 – Results:

The following table represents net revenue, gross margin, operating expenses, and other expenses for the fourth quarter and full-year December 31, 2023, and December 31, 2022, respectively:

Three months ended December 31, Years ended December 31,
2023 2022 $ Change % Change 2023 2022 $ Change % Change
Net revenue $ 11,541,147 $ 793,086 $ 10,748,061 1355 % $ 16,685,405 $ 6,875,202 $ 9,810,203 143 %
Gross profit $ 10,911,726 $ 667,545 $ 10,244,181 1535 % $ 15,423,655 $ 5,992,924 $ 9,430,732 157 %
Gross profit % 95 % 84 % 10 % 92 % 87 % 5 %
Operating expenses $ 11,280,493 $ 4,332,313 $ 6,948,180 160 % $ 24,131,596 $ 10,674,996 $ 13,456,600 126 %
Other expense, net $ 244,998 $ 105,960 $ 139,037 -131 % $ (704,013 ) $ (2,550,248 ) $ 1,846,235 72 %
Adjusted EBITDA /Net Revenue (“Adjusted EBITDA Margin”) 14 % -99 % -2 % -17 %

Financial Results for Three Months ended December 31, 2023

Net revenue for the three months ended December 31, 2023, was $11.5 million compared to $0.79 million for the three months ended December 31, 2022, an increase of $10.7 million, or 1,355%. The increase in net revenue was driven primarily by the launch of AmnioWrap2 in the 4th quarter of 2023 and the publishing of a nationwide price for this product by CMS, which enabled increased national reach to patients.

Gross profit for the three-months ended December 31, 2023, was $10.9 million, or 95% of revenue, compared to $0.67 million, or 84% of net revenue, for the three months ended December 31, 2022, an increase of $10.2 million, or 1,535%. The increase in gross profit resulted primarily from increased sales volume of our higher margin AmnioWrap2 products in beginning the third-quarter 2023. The increase in gross profit and gross margin resulted primarily from increased sales volume of higher margin AmnioWrap2 beginning in the 4th quarter as well as to an overall decrease in sales of higher cost, flowable products.

Operating expenses for the three-months ended December 31, 2023, were $11.2 million, compared to $4.3 million for the three-months ended December 31, 2022, an increase of $6.9 million or 160%. The increase in operating expenses is primarily due to additional headcount, service fees owed to our distributor for AmnioWrap2, and increases in share-based compensation.

Financial Results for Twelve Months ended December 31, 2023

Net revenue for the twelve-months ended December 31, 2023, was $16.7 million, compared to $6.9 million for the twelve-months ended December 31, 2022, an increase of $9.8 million, or 143%. The increase in net revenue was driven primarily by the expansion of our distribution network through Venture Medical, LLC beginning in Q3 2023, and increased distribution of the AmnioWrap2 product.

Gross profit for the twelve-months ended December 31, 2023, was $15.4 million, or 92% of revenue, compared to $6.0 million, or 87% of net revenue, for the twelve months ended December 31, 2022, an increase of $9.43 million, or 157%. The increase in gross profit resulted primarily from increased sales volume of our higher margin AmnioWrap2 products in beginning the third-quarter 2023.

Operating expenses for the twelve-months ended December 31, 2023, were $24.1 million, compared to $10.7 million for the twelve-months ended December 31, 2022, an increase of $13.5 million or 126%. The increase in operating expenses is primarily due to additional headcount, selling expenses for the launch of AmnioWrap2, and increases in share-based compensation.

Net loss for the twelve-months ended December 31, 2023, was $7.9 million, or $0.57 per share, compared to a net loss of $7.2 million, or $0.63 per share, for the twelve-months ended December 31, 2022.

Conference Call Details

Date: Monday, April 1, 2024
Time: 4:30 pm EDT
Webcast Link: https://events.q4inc.com/attendee/994834479
Participant Toll-Free Dial-In Number : 1 (800) 715-9871
Participant Toll Dial-In Number : 1 (646) 307-1963

To submit questions, participants must have Internet connectivity as questions will only be addressed via the webcast. The conference call line will be in listen-only mode.

About BioStem Technologies, Inc.

BioStem Technologies is a leading innovator focused on harnessing the natural properties of perinatal tissue in the development, manufacture, and commercialization of allografts for regenerative therapies. The Company is focused on manufacturing products that change lives, leveraging its proprietary BioRetain® processing method. BioRetain® has been developed by applying the latest research in regenerative medicine, focused on maintaining growth factors and preserving tissue structure. BioStem Technologies’ quality management system and standard operating procedures have been reviewed and accredited by the American Association of Tissue Banks (“AATB”). These systems and procedures are established per current Good Tissue Practices (“cGTP”) and current Good Manufacturing Processes (“cGMP”). Our portfolio of quality brands includes AmnioWrap2®, VENDAJE®, VENDAJE AC®, and VENDAJE OPTIC®. Each BioStem Technologies placental allograft is processed at the Company’s FDA registered and AATB accredited site in Pompano Beach, Florida. For more information, please visit: http://www.biostemtechnologies.com

Forward-Looking Statements

Except for statements of historical fact, this release also contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts of future events. Forward-looking statements may be identified using words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements with respect to the operations of the Company, strategies, prospects and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the impact of any changes to the reimbursement levels for the Company’s products; (2) the Company faces significant and continuing competition, which could adversely affect its business, results of operations and financial condition; (3) rapid technological change could cause the Company’s products to become obsolete and if the Company does not enhance its product offerings through its research and development efforts, it may be unable to effectively compete; (4) to be commercially successful, the Company must convince physicians that its products are safe and effective alternatives to existing treatments and that its products should be used in their procedures; (5) the Company’s ability to raise funds to expand its business; (6) the Company has incurred significant losses since inception and may incur losses in the future; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (9) the Company’s ability to maintain production of its products in sufficient quantities to meet demand; and (10) the COVID-19 pandemic and its impact, if any, on the Company’s fiscal condition and results of operations; You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the Company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

Contacts:

BioStem Technologies, Inc.
Phone: 954-380-8342
Website: http://www.biostemtechnologies.com
Email: [email protected]
Twitter: @BSEM_Tech
Facebook: BioStem Technologies

Investor Relations:
Jeff Ramson
New York, NY 10001
T: 646-863-6893
[email protected]

-Tables Follow-

BIOSTEM TECHNOLOGIES INC. CONSOLIDATED BALANCE SHEETS
As of December 31, 2023 and 2022
(UNAUDITED)
2023 2022
Current Assets
Cash $ 239,406 $ 772,136
Accounts receivable, net 11,371,730 37,206
Inventory, net 658,678 395,228
Prepaid expenses and other assets 329,239 281,931
Total current assets 12,599,053 1,486,501
Long-Term Assets
Property and equipment, net 1,154,856 1,249,784
Construction-in-Process 202,700 103,110
Right-of-use asset, net 11,443 19,832
Intangible assets, net 347,604 362,571
Goodwill 244,635 244,635
Total assets $ 14,560,291 $ 3,466,433
Current Liabilities
Accounts payable and accrued expenses $ 1,031,010 $ 570,115
Bona fide services fee payable 7,787,211
Accrued interest 1,697,787 1,478,421
Short-term finance lease 8,988 9,238
Notes payable 4,445,782 3,018,679
Related party convertible notes payable 300,000
Other convertible notes payable 723,350
Other current liabilities 289,409 228,303
Total current liabilities 15,260,187 6,328,106
Long-Term Liabilities
Finance lease, less current portion 3,294 11,305
Notes payable, less current portion 265,635 1,026,462
Other long-term liabilities, less current portion 14,850 50,512
Total long term liabilities 283,779 1,088,279
Total liabilities 15,543,966 7,416,385
Commitments and contingencies (Note 13)
Stockholders’ Deficit
Series A-1 convertible preferred stock, $0.001 par value authorized, 300 shares; issued and outstanding, 300 shares as of December 31, 2023 and 2022. 0.3 0.0
Series B-1 convertible preferred stock, $0.001 par value authorized, 500,000 shares; issued and outstanding 5 shares as of December 31, 2023 and 2022. 0.0 0.0
Common stock, $0.001 par value authorized, 975,000,000 shares; issued and outstanding 16,214,390 and 12,161,047 shares as of December 31, 2023 and 2022. 16,215 12,162
Additional paid-in capital 44,047,372 33,095,921
Treasury stock, 18,000 shares at cost (43,346 ) (43,346 )
Accumulated deficit (45,003,916 ) (37,141,133 )
Noncontrolling interest 126,444
Total stockholders’ deficit (983,675 ) (3,949,952 )
Total liabilities and stockholders’ deficit $ 14,560,291 $ 3,466,433

BIOSTEM TECHNOLOGIRES INC. CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ending December 31, 2023 and 2022
(UNAUDITED)
Years ended December 31,
2023 2022
Revenue, net $ 16,685,405 $ 6,875,202
Cost of goods sold 1,261,750 881,754
Gross profit 15,423,655 5,993,448
Operating Expenses:
Sales and marketing expenses 11,959,655 954,059
General and administrative expenses 10,066,410 9,252,744
Research and development expenses 327,344 224,775
Depreciation and amortization expense 229,014 243,418
Total operating expenses 22,582,423 10,674,996
Loss from operations (7,158,768 ) (4,681,548 )
Other Income (Expense):
Loss on extinguishment of debt (2,083,197 )
Interest expense (700,326 ) (468,153 )
Total other income (expense), net (3,689 ) 1,102
Total other expense, net (704,015 ) (2,550,248 )
Loss from operations before income taxes (7,862,783 ) (7,231,796 )
Income taxes
Net loss (7,862,783 ) (7,231,796 )
Less: Net loss attributable to noncontrolling interest (38,847 )
Net loss attributable to BioStem Technologies, Inc. $ (7,862,783 ) $ (7,192,949 )
Basic and diluted loss per share attributable to noncontrolling interest $ $
Basic and diluted net income (loss) per share attributable to common stockholders of BioStem Technologies, Inc. $ (0.57 ) $ (0.63 )
Basic and diluted weighted average common shares outstanding 13,707,077 11,404,995


NON-GAAP FINANCIALS MEASURES

Our management uses financial measures that are not in accordance with generally accepted accounting principles in the United States, or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Our management uses Adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.

The following is a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP Adjusted EBITDA for each of the periods presented:

2023 2022 $ Change % Change 2023 2022 $ Change % Change
Net loss $ (149,014 ) $ (3,770,729 ) $ 3,621,715 96 % $ (7,862,783 ) $ (7,231,796 ) $ (630,987 ) -9 %
Interest expense 237,069 109,949 127,120 -116 % 700,324 468,153 232,171 -50 %
Depreciation and amortization 54,606 57,822 (3,216 ) 6 % 229,014 243,418 (14,403 ) 6 %
EBITDA $ 142,661 $ (3,602,957 ) $ 3,745,618 104 % $ (6,933,445 ) $ (6,520,225 ) $ (413,220 ) -6 %
Share-based compensation 1,526,807 2,821,321 (1,294,514 ) 6,661,793 5,376,894 1,284,900 -24 %
Gain on bargain purchase-Auxocell NM
Adjusted EBITDA $ 1,669,468 $ (781,636 ) $ 2,451,104 314 % $ (271,652 ) $ (1,143,332 ) $ 871,680 76 %
Adjusted EBITDA /Net Revenue (“Adjusted EBITDA Margin”) 14 % -99 % -2 % -17 %

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