BioStem Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue was $7.6 million for the third quarter of 2026, down from $10.5 million in the third quarter of 2025 and $7.9 million in the second quarter of 2026.
• Hospital revenue grew sequentially to $6.8 million, compared to $6.7 million in the second quarter of 2026.
• Physician office revenue was $0.8 million, down from $1.1 million in the second quarter of 2026.
• Gross profit was $4.3 million, representing a gross margin of 56%, compared to $4.8 million (61%) in the second quarter of 2026 and $9.3 million (88.5%) in the prior year period.
• Operating expenses totaled $14.1 million, an increase from $13.2 million in the second quarter of 2026 and $7.8 million in the third quarter of 2025.
• GAAP net loss was $11.4 million, or $0.64 per share, compared to a net loss of $9.0 million, or $0.52 per share, in the second quarter of 2026.
• Adjusted EBITDA loss was $6.4 million, compared to an Adjusted EBITDA profit of $2.7 million in the third quarter of 2025.
• Cash and cash equivalents totaled $1.0 million as of September 30, 2026, down from $7.0 million as of June 30, 2026.
• Cash used in operations was $8.8 million in the third quarter, compared to $5.5 million in the second quarter.
• Total liabilities increased to $25.3 million as of September 30, 2026, from $10.9 million as of December 31, 2025.
• Total stockholders' equity decreased to $18.3 million as of September 30, 2026, from $39.1 million as of December 31, 2025.

Guidance and Future Outlook:

• Raised full-year 2026 revenue guidance to a range of $28 million to $29 million, up from the prior outlook of $26 million to $29 million.
• In-house production of Neox® and Clarix® is on track to begin in the first half of 2027.
• A cost reduction plan is expected to reduce annualized cash operating expenses by approximately $10 million to $12 million compared to the current run rate, with full benefits beginning in the first quarter of 2027.
• Management targets narrowing the adjusted EBITDA loss and working toward breakeven.

Business Segments and Product Lines:

• Customers purchasing two or more product lines increased 14% from the second quarter.
• Customers purchasing three or more product lines increased more than 40% from the second quarter.
• The number of customers ordering in consecutive quarters grew 6% from the second quarter.
• The VENDAJE product family was added to the Company's two largest existing GPO agreements in September.
• Technology transfer of Neox and Clarix manufacturing to the Pompano Beach facility is on track.
• Top-line results from the VLU study are scheduled to be reported at the Innovations in Wound Healing meeting in early December.

Market and Competitive Landscape:

• The Company completed the integration of sales logistics, operational support, invoicing, and collections from BioTissue effective at the beginning of August.
• The Company's CRM platform is now live and integrated with its ERP system.
• BioStem is focused on adding new accounts and increasing penetration with existing customers.

Risks and Challenges:

• The Company faces a $10.0 million Clearance Payment owed to BioTissue which remains unpaid; it is working to restructure the terms to lower near-term cash obligations.
• Gross margin decreased sequentially due to higher pricing under the BioTissue supply agreement following the expiration of the initial discounted pricing.
• Operating expenses increased due to higher general and administrative expenses related to uplisting and financing activity and payroll taxes on RSU vesting.
• Risks include the ability to maintain compliance with Nasdaq listing standards, access to financing, dilution from equity sales, the ability to continue as a going concern, and the outcome of discussions to restructure the Clearance Payment.

Management Commentary and Tone:

• Jason Matuszewski, Chair and CEO, stated the company grew hospital revenue by adding new accounts and increasing penetration with existing customers.
• Management noted the completion of the final step of commercial infrastructure build-out and the path to becoming a fully vertically integrated company with Neox and Clarix production.
• The tone indicates a focus on strengthening the balance sheet, raising gross margins, reducing operating expenses, and narrowing the adjusted EBITDA loss.

Other Key Points:

• Closed a private placement on September 30, 2026, generating gross proceeds of approximately $3 million, with potential for up to $5.6 million in additional proceeds from warrant exercises at $3.83 per share.
• Established a $40 million committed equity facility with Roth Principal Investments, LLC; sales under the facility may not begin until early April 2027 unless waived.
• Subsequent to the quarter, the CEO and COO exercised options generating approximately $1.0 million in gross proceeds.
• No shares have been sold under the committed equity facility.
• The Company is working with BioTissue to restructure the terms of the $10.0 million Clearance Payment.