BioStem Q1 2026 Earnings Call - Hospital Pivot and Margin Expansion on the Horizon

Operator: Thank you. I would now like to turn the conference over to Hannah Jeffrey, Investor Relations. You may begin.

Hannah Jeffrey, Investor Relations, BioStem: Good afternoon, everyone, and thank you for joining our conference call to discuss BioStem’s first quarter 2026 financial results and corporate highlights. Leading the call today will be Jason Matuszewski, the company’s Chairman and Chief Executive Officer, Barry Hassett, the company’s Chief Commercial Officer, and Brandon Poe, the company’s Chief Financial Officer. Before we begin, I’d like to remind everyone that our remarks may contain forward-looking statements based on management’s current expectations. These involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated. These risks are described in our filings with OTC Markets. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date made. The company undertakes no obligation to update them unless required by law. Finally, this call also includes references to non-GAAP financial measures.

A reconciliation to comparable GAAP measures and related information can be found in our earnings press release posted on the Investor Relations section of BioStem’s website. With that, I’d now like to turn the call over to Jason.

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Thank you, Hannah, and good afternoon, everyone. The first quarter of 2026 marked a transformational period for BioStem. With the acquisition we completed in late January, we have repositioned the company from a physician office-focused business to a hospital-focused business. Now, with a scalable technology platform backed by a diversified commercial infrastructure that will drive adoption in the hospital setting across a multitude of surgical specialties. This transaction added a new portfolio of perinatal tissue allografts, an experienced sales organization, and a large base of hospital customers, along with major GPO contracts. Together, these additions have significantly expanded our addressable market and increased our exposure to the commercially insured patient populations. As a result, our strategic focus is now centered on the hospital channel, where we believe we can drive broader adoption and long-term growth.

While this represents a shift from our 2025 operating model, we believe the core strengths of our business, including our proprietary technologies, clinical data, clinical champions, and commercialization approach, position us well to succeed in this setting. Before I dive deeper into the quarter, I want to briefly highlight progress on our capital market strategy. Following the completion of our 2024 and 2025 audits, we have confidentially submitted our Form 10 to the SEC, an important step toward our goal of uplisting to Nasdaq. We believe this will raise visibility of the company, increase our ability to attract top talent, enhance our access to institutional capital, and improve trading liquidity over time. This is a top priority for the company. We are excited to share further updates in the future.

On the business front, our focus is centered on 4 key initiatives that we believe will maximize long-term value creation. First, integrating the acquired products and sales force into our organization while continuing to build out our commercial infrastructure. Second, driving adoption across the hospital channel. Third, advancing our product roadmap with a 510(k) clearance. Fourth, executing the technology transfer of the Neox and Clarix products. In the first quarter, we are encouraged by the progress we have made across each of these initiatives. Starting with integration, our top priority coming out of the January 21st acquisition was to ensure continuity of the acquired business while expanding an already robust commercial organization to drive future growth. We are pleased to report minimal disruption during the transition, as demonstrated by our ability to maintain stable sales performance for the hospital business.

Hospital-based revenue was $5.4 million in the quarter, equivalent to $5.4 million revenue performance of the Neox and Clarix products during the same 70-day period in Q1 of 2025. Given the scale and complexity of this transaction, we view this as an important validation of the underlying business and the execution of our integration plan. The transition service agreement with BioTissue has supported our sales operations and administrative functions seamlessly. We are making great progress internalizing these functions to be operational in the second half of 2026. The most important driver of this stability has been the retention of the commercial organization. We successfully retained the acquired sales team with limited turnover, preserving critical customer relationships and surgical business expertise. At the same time, we have initiated efforts to expand our sales force.

Since the acquisition closed, we have nearly doubled the size of the direct sales team and added independent sales agents in key territories. We remain on track to continue scaling the team through the year, and we believe this expanded footprint positions us to increase utilization across our existing account base as well as drive new customer acquisition over time. This team will focus on key hospital call points across the country. Given our progress, we expect to reach 40 direct representatives by the year-end, along with continued strategic expansion of our network of independent sales agents. The new reps are completing our structured training and education programs, and we are confident this training, coupled with their relevant industry experience, will expedite their ramp to full productivity in 2027.

From a supply standpoint, our manufacturing and supply agreement with BioTissue extends for up to 36 months post-close of the acquisition, providing continuity and flexibility as we execute on our integration plan. Importantly, this agreement has ensured uninterrupted product availability with no customer-facing or supply disruptions during that transition period. While the supply agreement provides a long-term supply backstop, our objective is to complete a technology transfer and bring manufacturing of the Neox and Clarix products in-house, targeting approximately 12 months post-close. This transition represents a clear and measurable opportunity for gross margin expansion. By eliminating the cost plus markup under our current manufacturing agreement, we will gain roughly 7.5 points of margin improvement. Beyond that, we expect additional upside from internal efficiencies over time.

The combination of these positive factors should more than offset the 7% royalty on Neox and Clarix products to be manufactured internally post the technology transfer. Importantly, we have already demonstrated the ability to manufacture similar products at scale, with VENDAJE delivering gross margins of approximately 85%, which provides a strong benchmark for where these products can trend. While we expect an initial step up in margins upon completing the transfer, further improvements will be realized as we optimize yields and scale production. We remain on track to complete the technology transfer in the first half of 2027. At scale, this margin expansion is expected to meaningfully improve our path to profitability and drive operating leverage across the business. With that, I’ll turn the call over to Barry to discuss our commercial strategy in more detail.

Barry Hassett, Chief Commercial Officer, BioStem: Thanks, Jason. Our commercial strategy is centered on driving adoption across the hospital channel, where we believe we have a differentiated opportunity to grow utilization of our full product portfolio. Neox, Clarix, and VENDAJE are positioned as a solution across a broad range of surgical and wound applications, including orthopedics, women’s health, spine, urology, and colorectal procedures, and chronic wound care, representing a multi-billion dollar market opportunity. During the first quarter, our focus was on establishing the foundation to scale this opportunity. From a commercial infrastructure perspective, we have significantly expanded the sales organization. We now have a 35-person direct sales team, up from 18 at the time of the acquisition, and a network of more than 30 independent sales agents. The team will focus on key hospital call points nationwide where we are establishing BioStem’s presence.

Over the course of the year, we expect to scale the sales organization to at least 40 direct representatives, supplemented by additional independent agents to expand geographic reach and deepen penetration across the hospital channel. One of the cornerstones of our commercialization strategy is expanding access to customers through GPO contracts. GPO contracts represent validation from trusted value assessment committees that hospitals rely on to improve their purchasing power. These provide favorable access to hospital systems nationally as well as to a large number of non-facility settings. I am pleased to report that all major GPO agreements from the acquired business have been successfully reassigned to BioStem with no disruption, preserving immediate access to contracted hospital systems. With that access in place, we are now expanding our portfolio within those accounts by adding the VENDAJE brand across our GPO agreements.

This allows our sales team to drive incremental revenue within existing customers without the need for new contracting, which we believe is a significant advantage in accelerating adoption of VENDAJE products. In the second quarter, we will further leverage this opportunity by equipping our hospital sales team with the expanded VENDAJE product portfolio. This creates a more comprehensive offering for surgeons and additional opportunities to sell against leading competitors. In addition, our relationships with the hospital systems, specifically with surgeons, are beginning to create referral pathways into outpatient and office-based settings, which we expect will support broader adoption over time as well. With GPO contracts in hand and the most comprehensive portfolio of perinatal tissue allografts on the market, we believe that our expanded commercial sales team is primed to succeed and drive growth in the hospital setting.

Beyond commercial infrastructure, we are focused on supporting adoption through education, surgeon engagement, and clinical evidence as core components of our commercial strategy. During the quarter, we expanded our presence at key industry conferences, educational panels, and hands-on training events, working alongside leading key opinion leaders to increase awareness of our products and their clinical benefits across multiple specialties. We have established a robust calendar of educational programs for the remainder of the year and expect to continue scaling these efforts. These initiatives are strengthening clinical understanding of our differentiated portfolio, reinforcing clinical confidence in our products, and creating additional opportunities to expand utilization across both existing and new accounts. At the same time, we continue to build our clinical evidence database.

Our BioRetain DFU and VLU programs, including the level 1 randomized controlled trial results published in late 2025, represent meaningful differentiators as we educate clinicians on the benefits of our products. We were one of a handful of companies that invested in producing that level of evidence to support our technologies. In the coming months, we expect to publish further analysis of the DFU trial and complete the VLU study and publish those results later in the year. This adds to more than 90 publications supporting the clinical use of Neox and Clarix in wound care and surgery, and more than 400 that demonstrate the benefits of the CryoTech, SteriTech, and BioRetain technologies in a variety of applications.

As the reimbursement environment evolves, we believe clinical evidence will play an increasingly important role in product selection, and we are well-positioned to leverage our data to support both adoption and expanded payer coverage. In regard to advancing our product roadmap, we anticipate clearance of our first 510(k) product in the near future to be followed by its launch in the latter half of the year. This is another milestone that will again differentiate our portfolio from competitors, further establishing BioStem as the premier provider of perinatal allografts and partner of choice for facilities and clinicians. Overall, with a scaled commercial organization, GPO access, and an expanded product portfolio, we believe we are well-positioned to drive increasing utilization and growth in the hospital setting. With that, I’ll turn the call over to Brandon to walk through our financial results.

Brandon Poe, Chief Financial Officer, BioStem: Thanks, Barry. To start, I want to give some context around the seasonality we expect in our quarterly revenues now that the vast majority of our sales will be generated in the hospital business. Historically, the first quarter has been the softest quarter of the year for the hospital business since many patients are starting over with fresh deductibles, resulting in the deferral of elective surgical procedures into the second half of the year. We anticipate that the shift of revenue into the second half could be even more pronounced in 2026 because, as Jason and Barry noted, we are significantly growing our sales force, and we expect these new hires to deliver revenue growth in the latter part of 2026 and into 2027 as they become fully ramped.

In addition, we owned the hospital business for only 70 of the 90 days in the first quarter, which sets up a favorable sequential comparison for Q2. In the physician office market, CMS reimbursement changes continue to cause disruption, but we do see potential opportunity in this space in future quarters as this market uncertainty gets resolved. Overall, our early success and positive integration of the acquisition have given us confidence that we can deliver meaningful growth in the hospital business as we execute on our initiatives and ramp our sales force. With that background, I will turn to our first quarter results. In the quarter, our revenue totaled $6.1 million compared to $10.1 million in the prior quarter and above our prior guidance of $5 million-$6 million.

Revenue was largely driven by sales of the Neox and Clarix products in the hospital market. Importantly, we delivered revenue consistent with the performance of the acquired assets when compared to the prior year, adjusted for the January 21 close date. Hospital revenue was $5.4 million, and physician office revenue was $772,000 in the quarter. As we have discussed, we are focusing our strategy and resources on delivering growth in the hospital market. We will continue to support inbound demand from our distributors who are focused on the physician office and mobile sites of care, but we do not anticipate that business being a significant growth driver for the company in 2026. Gross profit for the first quarter was $3.8 million, representing gross margin of 61% compared to $9.8 million and 97% in the prior period.

The sequential decrease in gross margin was a result of the product shift to the Neox and Clarix products covered under the manufacturing supply agreement and is expected to decline slightly during the year as we work through the preexisting inventory, which we purchased shortly after the close of the acquisition at a discount from the supply agreement list pricing. After the technology transfer is completed, which is targeted for the first half of 2027, we expect margins will significantly increase, as Jason described earlier on this call. Operating expenses for the first quarter totaled $12.6 million compared to $17.3 million in the prior period.

The sequential decrease was primarily driven by the bad debt expense recorded in the fourth quarter of 2025, partly offset by the addition of the acquired workforce in the first quarter and one-time expenses related to the acquisition and our uplisting process. Operating expenses are expected to continue to ramp as we expand the sales force and commercial infrastructure during the year. Moving to the balance sheet, our cash and cash equivalents balance was $13.7 million as of March 31, 2026, compared to $29.5 million as of December 31, 2025, with the sequential decline primarily due to the $15 million upfront purchase price paid for the acquisition.

I also wanted to mention that in late April, we entered into an agreement with GMA to resolve all claims related to 2 existing promissory notes that had an aggregate outstanding principal amount of $3 million and accrued interest of $2.3 million. As part of the agreement, we made a cash payment to GMA in the amount of $3.5 million, and we issued a secured promissory note in the principal amount of $1 million, bearing interest at a half percent per month for the first 6 months and three quarters of a percent per month thereafter until maturity with a 1-year term. If we repay the full $1 million principal on or before December 31st, 2026, no interest will be due. Turning to our outlook.

We are initiating revenue guidance for full year 2026, and we expect full year revenue to be in the range of $25 million-$29 million. We believe our guidance appropriately reflects the opportunities ahead while also accounting for the operational transition currently underway across the business, including the significant market disruption in the physician office market and the transformative nature of our acquisition. As we continue integrating our expanded commercial organization and scaling our hospital-focused strategy, we believe there is room for growth throughout the year. The 2nd quarter will represent our 1st full quarter with the combined business, and we expect sequential growth in the quarter, with the 2nd half of 2026 setting up an opportunity for further sequential improvement.

In the hospital business, growth is expected to be driven by sales rep additions and productivity ramping, deeper utilization of our GPO contract base, and the introduction of our BioRetain dry products to our hospital sales team. We view the first quarter as the trough for the physician office market, with stabilization in the second half of 2026 and sequential revenue improvement to follow. I will turn the call back to Jason for closing remarks.

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Thanks, Brandon. As we look ahead, BioStem is a fundamentally different company than it was just a few months ago. With the acquisition we completed in January, we have repositioned the business toward the hospital channel, added a scale commercial infrastructure, and expanded our access to commercially insured patient populations. This transformation is particularly important in the current environment. While the physician office and mobile wound care markets continue to experience disruption, we are increasingly focused on the hospital setting, where product selection is driven by clinical evidence, contracting access, and supply reliability. These are areas where we believe BioStem is well-positioned to compete and win. From here, our priorities are clear. We are focused on driving utilization across our existing hospital accounts, expanding the reach and productivity of our sales organization, and increasing penetration of our full product portfolio through our GPO relationships.

At the same time, we are innovating our product pipeline and executing on the planned technology transfer, which represents a meaningful and visible opportunity to expand gross margins and improve the long-term profitability of the business. We expect 2026 to be a year of execution and sequential improvement, with the foundation we are building today setting up a stronger, more scalable business in 2027 and beyond. We believe BioStem now has the commercial platform, product portfolio, and margin profile to compete more effectively in a changing market and to create long-term value for our shareholders. With that, operator, please open the line for questions.

Operator: Thank you, and we’ll now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you’re called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to 1 question and 1 follow-up. Again, it is star one to join the queue. Our first question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Your line is open.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Thank you. Good afternoon, Jason and team. Really appreciate taking my question. Can you hear me good?

Brandon Poe, Chief Financial Officer, BioStem: We can.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Okay, good. Good. It just trying to understand the two businesses, you know, between the hospital and the physician. I understand, you know, your comments on trying to focus more on the hospital side of things, rather than the physician pieces. What needs to happen within that sector, you know, for you to gain some traction? It’s not that you don’t have traction, it’s just that the way the market, the sector is. You know, and also, regarding the clinical evidence that you have had so far, you know, how do you plan to process that, you know, into Is that, is that gonna be just only a 510(k)?

you know, could you, or is it too early to think about resources being spent on trying to build up a portfolio of evidence for a BLA?

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Sure. RK, thanks again for asking the question. I’ll flip it over to Barry in regards to kind of where we are positioning ourselves in regards to the physician office versus hospital. I guess maybe one clarifying point there, you said, get back to things or expanding sales. Was that in regard to the physician office, market or the hospital market?

Swayampakula Ramakanth, Analyst, H.C. Wainwright: The hospital market. Yeah, sorry, I’ve been, like, running between calls. I think I heard it properly saying that, you know, you’re certainly spending a lot of energy in the hospital business at this point. Just trying to understand how you plan to work through some of the disruptions in the physician’s office right now.

Barry Hassett, Chief Commercial Officer, BioStem: Yeah. Okay. Thank you, RK. With regard to the physician office, you know, we believe that those disruptions are just gonna take some time to work through. You know, there are 2 things going on there, with regards to the change in payment from CMS, as well as there’s still pretty aggressive auditing and potential clawbacks going on in that environment that frankly have made clinicians hesitant to treat patients in that setting. We’re waiting for that to settle down. We’re still partnered with Venture. We’re actively selling in that space. In addition to that, we do expect to see some shift in patient treatment from that setting back into the hospital outpatient setting.

I think what has gotten lost in some of the messaging overall within the industry is that the reimbursement and payment situation has actually improved in the hospital setting. With our GPO agreements and already being available in that setting, we believe we’re well-positioned to take advantage of some of that flow back into the hospital outpatient setting.

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: RK, I’ll address the product roadmap and some of the regulatory strategies that.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Yeah

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: we’re looking into.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Right.

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Obviously right now majority of our products, frankly, all of our products are considered 361 HCT/Ps. We are evaluating a multitude of regulatory pathways in which we can up-regulate those products, whether it be the 510(k) pathway or a BLA pathway. You know, as an organization in some of our long-term strategies, we are looking at how do we up-regulate away from the framework and move toward that device specific device framework or the BLA framework. One thing of note is more recently CMS and FDA announced a recent announcement around a pathway to get coverage along with an FTF 510(k) designation as an area of interest for us as we look at, you know, that regulatory strategy.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Okay. No, that’s great. Now regarding your guidance which you presented today, of $25 million-$29 million, which, you know, based on what has happened during the first quarter implies you need to get somewhere between $19 million-$23 million, you know, for the next over the next three quarters. How should we think about, you know, quarter-to-quarter growth? I’m not asking for specific numbers, but what I’m trying to find out is like what are the pushes and pulls on that number, such as like hospital sales force ramp up, the GPO contract reassignment that’s happening, you know, what’s the timing on that? Also, how are you thinking about either pricing or new product launches within the hospital environment?

Brandon Poe, Chief Financial Officer, BioStem: Barry, do you wanna touch on the drivers for the year a little bit?

Barry Hassett, Chief Commercial Officer, BioStem: I can touch on that. Again, with regard to the drivers for the year, I think there are a few things. First of all, the hospital business is quite seasonal. Historically, you will see sequential growth quarter to quarter. We see nothing that indicates that we wouldn’t see that same phenomenon this year. The reason for that is many of these procedures are elective, and you see a slowdown in volume at the beginning of the year because patients have restarted their deductibles and often wait until later in the year when they’re either achieved or at least closed the gap on their deductibles.

You know, we continue to be actively integrating the hospital business into BioStem. There was, you know, minimal disruption in the first quarter, but again, as everything settles down, as we build up our own inter-internal infrastructure to support the business, we expect that to provide additional momentum in the business as well. The new hires, you know, take some time to ramp up from a productivity perspective, but we’re actively training them and supporting them to make sure they achieve productivity as quickly as possible as well.

Given historic trends, given the investment that we’re making in the business, we’ve launched, as I mentioned, you know, earlier in the call, we’ve launched a very comprehensive medical education program, and we’re actively out there at society meetings. We do expect that all of those efforts will drive sequential growth over the course of the year.

Brandon Poe, Chief Financial Officer, BioStem: RK, I’ll add to a little bit what Barry said around, you know, flowing what he said into the numbers a little bit. You know, the $25 million-$29 million, you know, we think, you know, is it really reflects sort of the transition and integration we’ve got of the acquired assets this year in the hospital market, you know, the physician office market disruptions. As you think about that, you know, our with the things Barry just said, you know, our expectations are that we’ll see sequential growth really through the year. Q2 better than Q1, Q3 better than Q2, et cetera. When you think about flowing that out, that’s how we’re thinking about the numbers.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Great. You know, I know you made some remarks about the tech transfer. You know, as you progress towards that, what are the milestones you can talk about? Once you get there, what sort of gross margin are you, would you consider as optimum, when that completes, say especially in 2027? If there is a chance where if you slip up, what sort of a cost-plus markup will you have to bear?

Barry Hassett, Chief Commercial Officer, BioStem: I can take, you know, as far as what are the milestones. Really the major milestone here is that the arrangement that we established with BioTissue on the acquisition is that we were going to utilize their CDMO services or contract manufacturing services for the first 12 months. That’s kind of where our head’s at, our guidepost of where we want to be to do that cut over and that transition. That’s what we’ve been internally working with BioTissue to drive to. I can kind of flip it over to Brandon in regards to margin improvement and what our thoughts are there.

Brandon Poe, Chief Financial Officer, BioStem: Yeah. Okay. A couple questions you had in there. You know, our Q1 margin was 61%. I think what you’ll see through the rest of the year is maybe something a little bit below that in the next couple of quarters, simply because we did an early buy of existing inventory at a bit of a discount, and that’s helping us as we’re sort of working our way through that inventory on the gross margin side. As you work into, you know, next year, and again, we’ve said kind of first half of 2027, we anticipate bringing the manufacturing in-house for the tech transfer. You know, I feel comfortable, you know, saying that margins can certainly be well above 60%.

You know, as Jason noted on the call, we’ve done 85% in the business we have today. We know the products well that are being manufactured. You know, we’re paying a markup today. I think, you know, with our know-how, with the volume and the scale and other things, we think we can push that up. You know, you know, we’ve said, you know, 20%-85%, that’s probably on the higher end of where we would get to. You know, I think we’ve got a path certainly well above the 60% that we’re seeing today. You asked a question about a penalty. You know, there isn’t really. I’m not sure if I’m answering your question, tell me if I’m not.

The markup that we have today is, I think we’ve said before, is about 23%. You know, we would just keep that markup if we decided to stick with the BioTissue manufacturing supply agreement for the full 3 years. We would continue to pay that markup on the products that they’re delivering. There isn’t really a penalty per se. If we get beyond the 3 years, you know, something we’d have to talk about and contemplate, but our real goal is to move it in-house as quickly as possible and targeting the first half of next year.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: Perfect. No, thank you very much. You did answer my question, Brandon.

Brandon Poe, Chief Financial Officer, BioStem: Okay. Great.

Swayampakula Ramakanth, Analyst, H.C. Wainwright: really appreciate your time.

Barry Hassett, Chief Commercial Officer, BioStem: Thanks, RK.

Brandon Poe, Chief Financial Officer, BioStem: Thank you.

Operator: Our next question comes from the line of Mike Matson with Needham & Company. Your line is open.

Mike Matson, Analyst, Needham & Company: Yeah, thanks. I guess I’ll start by following up on the gross margin line of questioning there. Just want to make sure I heard you correctly. This transition, when you bring it in-house in about 1 year, you said that you would gain about 7.5%, but then there’s like a royalty or something that’s about the same amount. Did I hear that correctly? That’s kind of a wash, at least at the starting point. I know you might be able to become more efficient, as you were mentioning, but

Brandon Poe, Chief Financial Officer, BioStem: Mike, this is Brandon. Thanks for the question. That’s right. There are really 3 things at play here. 2 positive, 1 negative, at least in the short term. The 2 positive are the 1 you described, right, we lose the markup on the products, the 23% markup, which has about a 7 to 8 point benefit on gross margin. You’re right, the offset, the negative offset is the 7% royalty that we would pay, and that’s up to $15 million. It could be as little as $13 million, but it’s up to $15 million. Eventually that goes away over time. The 3rd piece, which is the upside, is what you said, right? Is the efficiencies, right? We know these products well. You know, we’ve made similar products internally.

You know, we think there’s opportunity for us to improve the margin, just through efficiencies. That’s sort of the missing piece there that certainly could give us some we think significant upside.

Mike Matson, Analyst, Needham & Company: Okay, got it. Just a couple on the sales, the direct sales force. Where are you hiring the reps from? Do they have wound care experience? Do they have other skin substitute experience? Just productivity, I mean, I know it’s maybe you don’t even have a good feel for it because you haven’t really been selling in the hospital before, but, you know, what are you thinking for revenue per rep kind of when they do hit full productivity? On an annual basis, sorry, to be clear.

Barry Hassett, Chief Commercial Officer, BioStem: Yeah, I can take that question. You know, we’re hiring a variety of talent. Everybody that has come on board has experience selling in the hospital setting and in the OR. There are a number of the people that have skin substitute experience, but I think more importantly, they have surgical experience. And they’ve got relationships in the various specialties that we’re selling into. That’s sort of the profile of the rep that we’re looking at bringing on board.

With regard to productivity, you know, we really expect that in many cases it’s going to be, you know, kind of in that 6-12 month timeframe to where their contributions begin to become meaningful. If for no other reason than in many of the places that we’re hiring, there was an existing business already. You know, they have to generate clinical interest and then go through the VAC approval processes in the hospital environment in order to get product on the shelf. Importantly, you know, with the major GPO agreements that we have in place, that’s sort of that first hurdle to access and they’re, you know, very importantly over that hurdle to begin with.

Mike Matson, Analyst, Needham & Company: Okay, great. Thank you.

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Yep.

Operator: As a reminder to star 1 to ask a question. Our next question comes from the line of Bruce Jackson with StoneX. Your line is open.

Bruce Jackson, Analyst, StoneX: Hi, good afternoon. Just a follow-up question on the regulatory status and potentially up-regulating the status of some of your products through a 510(k) or BLA process. When do you think you’re going to be done evaluating this? Do you have to talk to the FDA first? You know, when might we have some clarity on what that, what the timing might look like on that process?

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Hey, Bruce. Thanks for the question. Currently we don’t have timing on kind of that process. We have been working with the BioTissue team, the BioTissue team is the one champion driving that process and that timeline and that submission. We currently do not have line of sight for that. Although we do anticipate.

Bruce Jackson, Analyst, StoneX: Okay. That’s fine. I was just curious.

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Yeah. Yeah, although we do anticipate somewhere in the back half of this year.

Bruce Jackson, Analyst, StoneX: Okay, great. That’s it for me. Thank you.

Operator: Our next question comes from the line of investor Howard Gosbrand. Your line is open.

Howard Gosbrand, Investor: Thank you. Jason and team, thank you for all that information. Jason, you mentioned in your remarks that there was a Form 10 confidentially filed. From what I understand, a Form 10 typically is approved, 60 days if not sooner. Are you able to share when that was filed?

Jason Matuszewski, Chairman and Chief Executive Officer, BioStem: Brandon, Would you like to take that question?

Brandon Poe, Chief Financial Officer, BioStem: Sure, yeah. Thanks for the question, Howard. We filed the middle of April. We are expecting our first round of comments any day back from the SEC. In terms of your comment around 60 days, we’ll have to see how the comments come out, so we haven’t put a timeline on it yet, but we are moving forward and progressing with our planned uplist process.

Howard Gosbrand, Investor: Okay. To confirm, that Form 10 is really the final hurdle, for not only BioStem, but any company that would want to uplist. Is that correct?

Brandon Poe, Chief Financial Officer, BioStem: That’s correct. To register the shares, that would register the shares, then there’s an uplist process after that, but that’s a big stepping stone. That’s right, Howard.

Howard Gosbrand, Investor: Okay. Thank you very much. That’s good.

Operator: Ladies and gentlemen, that concludes our question and answer session, as well as today’s call. We thank you for your participation, and you may now disconnect.