Erik Voss

Bradley Sorensen

Bruce Jackson

Ernest Watts

Kevin

Kevin Peterson

Mitchell Sacks

Page Taggart

Paige Taggart

Peter Stoddard

Swayampakula Ramakanth

58414828a415d5afcf2fa086c9de2a33dc4755bd69bf4ad651d9fce4d8b3b443

1. **Medicare Revenue**  
   **Q:** What portion of revenue is Medicare-based?  
   **A:** Management stated that a **majority** of revenue currently comes from **Medicare** reimbursement, highlighting its central role in their earnings.  **[BSEM_3422314_18]**   

2. **Effective Tax Rate**  
   **Q:** Future effective tax rate expected?  
   **A:** They expect an effective tax rate of about **24%** going forward, noting that the Q4 tax benefit was due to prior NOL utilization and that future tax strategies are under review.  **[BSEM_3422314_12]**   

3. **Margin Outlook**  
   **Q:** Impact of SEC adjustment on margins?  
   **A:** If bona fide service fees are reclassified and netted against revenue, reported revenue and gross margin would be slightly lower; however, **net income** and **adjusted EBITDA** would remain largely unchanged.  **[BSEM_3422314_14]** **[BSEM_3422314_11]**   

4. **Revenue Guidance**  
   **Q:** Can Q4 revenue be annualized above $400M?  
   **A:** Management refrained from providing annualized guidance, emphasizing that while Q4 performance was strong, future revenue modeling remains uncertain due to various operational factors.  **[BSEM_3422314_9]** **[BSEM_3422314_10]**   

5. **FDA Impact**  
   **Q:** Does the FDA warning affect current products?  
   **A:** The warning letter only concerns discontinued injectable products and does not impact the manufacturing or regulation of the current tissue product portfolio.  **[BSEM_3422314_6]** **[BSEM_3422314_8]** 

6591e97353a564c2df97572fb13f7053c1cdff5a831d448fb8dab034c11023c0

- **Uncertain Revenue Recognition:** There is a risk that the SEC could require the company to reclassify its bona fide service fee payments as a reduction against revenue (i.e., a fully net revenue model) rather than as a sales and marketing expense. This change could **lower reported revenue and gross margins**, even if net income remains largely unaffected.  **[BSEM_3422314_7]** **[BSEM_3422314_14]**
- **Heavy Medicare Dependence:** A majority of BioStem’s revenue is derived from Medicare reimbursement. Any changes in Medicare policy or reimbursement practices, especially given the current uncertainty and potential shifts in LCD implementation timing, could **adversely impact revenue sustainability**.  **[BSEM_3422314_18]** **[BSEM_3422314_19]**
- **Guidance and Sustainability Uncertainty:** Management refrained from providing clear guidance on whether the strong Q4 figures can be maintained or annualized for 2025, reflecting uncertainty about the **sustainability of the current sales momentum** and underlying market conditions.  **[BSEM_3422314_9]** **[BSEM_3422314_10]**

d8446efe991c72341ea2c8ba30e8b08f78f486734f38af31229ac1ffcfefb812

- **Robust Medicare Reimbursement Base:** A majority of revenue is based on Medicare reimbursement, providing a stable and resilient payer base that supports the company's revenue streams.  **[BSEM_3422314_18]**
- **Expanding and Diversifying Distribution:** Management has highlighted efforts to expand geographically—from a strong West Coast presence to targeting large organizations on the East Coast, hospitals, and other channels—indicating additional market penetration opportunities.  **[BSEM_3422314_13]**
- **Earnings Resilience Amid Revenue Recognition Adjustments:** Discussions over potential revenue line adjustments for bona fide service fees suggest that even under a worst-case scenario, operating earnings and EBITDA remain largely unaffected, emphasizing the strength of the underlying economics.  **[BSEM_3422314_7]** **[BSEM_3422314_11]**

0c97edff9e6defbd94e40d9f99769a14379c0e263bdf3d550cdbd717f32db52a

- **Q4 revenue reached $102.9 million**, up significantly from $11.5 million in Q4 2023, driving full‑year revenue to **$301.8 million** with positive GAAP net income, reflecting strong operational execution.  **[BSEM_3422314_1]** **[BSEM_3422314_2]** 
- The company achieved robust market impact with the nationwide launch of **VENDAJE AC** and strong adoption of AmnioWrap2, positioning its clinical trials and strategic initiatives for continued growth in 2025.  **[BSEM_3422314_1]** **[BSEM_3422314_2]** 
- BioStem is advancing its strategic initiatives with progress on **uplisting to NASDAQ** and an improved cash balance of **$22.8 million** at Q4 end, underpinning its future expansion efforts.  **[BSEM_3422314_2]** **[BSEM_3422314_4]**

BioStem Technologies Reports Record Q4 2024 Financial Performance

46eb5b1368430ceeedf70e20e59ed06dd33ac45996c70f71c7acab46e4c24bbb

38807883aa6043be56b6080c77a6be0c8dd2ee0ab01756b1cdeb1666a02361cc

5e89c642c007de8fffc4b5090b8fce4c1a3e979d82a8c807a9be285f5f748269

- **Rising distribution-related costs:** The reliance on Venture Medical for distribution is leading to increasing bona fide service fees that track closely with revenue growth, potentially pressuring margins and adding cost unpredictability. ** **[BSEM_3407905_3]** **[BSEM_3407905_9]** **
- **Regulatory and reimbursement uncertainties:** Ongoing discussions with CMS and concerns over proposed LCDs for skin substitutes introduce risks of adverse coverage policies, which could limit market access and negatively impact revenue. **[BSEM_3407905_4]**
- **Equity structure transition risks:** The planned uplisting and transition from OTC to NASDAQ, along with adjustments to outstanding options and warrants, could introduce share structure uncertainties that may affect shareholder value. **[BSEM_3407905_6]**

00cfa19592a7fc9a4f46e40b856ea7b9ea50dbd50ec3590182d5076f56dc5682

- **Robust Distribution & Pipeline Management:** The executives highlighted that Venture Medical is ordering and shipping product daily while actively monitoring the demand pipeline through their advanced platform. This efficient, real‑time distribution model supports rapid revenue growth and consistent market penetration.  **[BSEM_3407905_7]** **[BSEM_3407905_6]**
- **NASDAQ Uplisting & Enhanced Visibility:** The plan to move from OTC to NASDAQ is expected to improve liquidity, attract a broader investor base, and increase the company’s market credibility, positioning it for long‑term growth.  **[BSEM_3407905_6]**
- **Efficient Cost Scaling with Revenue Growth:** Management noted that sales and marketing expenses—especially bona fide service fees—scale in direct correlation to top‑line revenue increases, indicating operational efficiency as the business expands.  **[BSEM_3407905_9]**

f3d8738f5acd44c2471fbf232024c468c996fbff9407717507bb9774bc8b070f

1a578c51da6f5991b60de2a8569c8a2e8c42a5fda51abbd2b6211b4e55559854

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

1. **NASDAQ Uplisting**  
   **Q:** Next steps for Form 10 uplisting?  
   **A:** Management plans to update Q2 data in their Form 10 filing with a target of uplisting to NASDAQ in **60–90 days**, improving liquidity and market visibility.  **[BSEM_3398392_7]** 

2. **M&A Strategy**  
   **Q:** What is the 12-month M&A outlook?  
   **A:** The team is actively reviewing opportunities that complement their continuum of care, with potential add-on deals under consideration but no deal finalized yet.  **[BSEM_3398392_6]** 

3. **Clinical Trials**  
   **Q:** How will clinical trials boost growth?  
   **A:** Initiatives, especially in diabetic foot ulcers, are aimed at securing reimbursement evidence and expanding market reach, which should support future revenue.  **[BSEM_3398392_9]** 

4. **Supply Chain**  
   **Q:** Any supply chain or capacity issues?  
   **A:** They report strong supply chain management through key recovery partnerships and are expanding their facility with additional clean room capacity.  **[BSEM_3398392_4]** 

5. **Medicare Coverage**  
   **Q:** Impact of CMS fee schedule changes?  
   **A:** Although CMS proposed LCD adjustments may cause short-term market shifts, robust clinical data positions them well to maintain coverage.  **[BSEM_3398392_10]** 

6. **Product Growth**  
   **Q:** Why is AmnioWrap2 growth strong?  
   **A:** The product is gaining rapid traction due to effective partnerships, strong clinical outcomes, and high market demand.  **[BSEM_3398392_5]** 

7. **IP and Costs**  
   **Q:** How are patents and distribution costs managed?  
   **A:** With a portfolio of over **65 patents** and a streamlined unaffiliated sales force via bona fide service agreements, they control IP and distribution costs efficiently.  **[BSEM_3398392_8]** 

8. **Material Source**  
   **Q:** Can the tissue for AmnioWrap be artificially produced?  
   **A:** They continue to use live perinatal tissue given regulatory constraints, keeping focus on their proven current process.  **[BSEM_3398392_11]** 

74ad3b2a261c87b621deb658291ff61f79f3ea2bd161fa567e41b7f97b4acc30

- **Clinical Trial Dependency Risk:** The company’s upcoming clinical trials for its core products, particularly the DFU study for AW2, are in early phases and face potential delays or unfavorable outcomes that could hurt product adoption and reimbursement avenues.  **[BSEM_3398392_9]** **[BSEM_3398392_10]**
- **Supply and Manufacturing Constraints:** While current raw material supply seems managed, the rapid growth in demand may outpace existing capacities, and the need for further facility expansion introduces execution and scaling risks.  **[BSEM_3398392_4]**
- **Regulatory and Reimbursement Uncertainties:** Proposed changes to LCDs and ongoing shifts in CMS policies pose risks regarding reimbursement rates and coverage, which might negatively impact revenue if the evolving regulatory environment works against the company’s product pricing strategies.  **[BSEM_3398392_10]**

ff3dd6f18425f2af25e1c9c3421fdd47903bc88a81552f29f180de4667379f8f

- **Robust clinical trial initiatives**: The company is actively launching a multisite RCT for its AmnioWrap2 in diabetic foot ulcers, aiming to generate data that supports product efficacy and addresses LCD coverage concerns, which could drive market expansion.  **[BSEM_3398392_9]**
- **Scalable manufacturing and secure supply chain**: Management highlighted ongoing investments such as adding **8 clean rooms** and enhancing material recovery partnerships, ensuring sufficient capacity to meet increasing demand.  **[BSEM_3398392_4]**
- **Expanding IP portfolio and diversified product pipeline**: With over **65+ patents** and plans to launch additional product lines like VENDAJE, the company is positioning itself to capture new markets and bolster its competitive edge.  **[BSEM_3398392_8]**

9be343e188cc7aef806eb3616f854411858e496d67ff30c4c94713aa72ad29c0

BioStem Technologies, Inc. (BSEM) is a regenerative medicine company focused on the development, manufacture, and commercialization of placental-derived allografts for advanced wound care. The company specializes in products that support tissue healing, targeting conditions such as diabetic ulcers, pressure ulcers, and venous ulcers. BSEM's offerings include a range of perinatal tissue-derived allografts trusted by clinicians across various specialties.  **[0000950170-25-007936_form_10-12ba_q3_amend_2_.htm:6]** **[0000950170-24-131535_form_10-12ba_q3_bsem.htm:6]** **[0000950170-24-110010_form_10_bsem_q2_final_as.htm:5]** **[0000950170-25-007936_form_10-12ba_q3_amend_2_.htm:91]** **[0000950170-24-131535_form_10-12ba_q3_bsem.htm:91]** 

1. **Membrane Products** - Develops and markets placenta-derived allografts used as protective barriers or coverings to support tissue healing and improve patient outcomes.  **[0000950170-25-007936_form_10-12ba_q3_amend_2_.htm:6]** **[0000950170-24-131535_form_10-12ba_q3_bsem.htm:6]** **[0000950170-24-110010_form_10_bsem_q2_final_as.htm:5]** **[0000950170-25-007936_form_10-12ba_q3_amend_2_.htm:91]** **[0000950170-24-131535_form_10-12ba_q3_bsem.htm:91]** 
2. **Cord Products** - Offers allografts derived from umbilical cord tissue, although this segment has seen reduced activity in recent periods.  **[0000950170-25-007936_form_10-12ba_q3_amend_2_.htm:165]** **[0000950170-24-131535_form_10-12ba_q3_bsem.htm:166]**

550cdd5c2121e3cca8fef0be9e29354f5009bcdcb3209b7693ce00a59a641eda

1. **LCD Impact**  
   **Q:** How will LCD affect product coverage?  
   **A:** Management explained that proposed LCDs would cap applications to **4** per case and limit coverage to **15** products out of about **180** currently used, a change they are actively addressing with enhanced clinical trials and stakeholder discussions.  **[BSEM_3389565_2]** 

2. **International Reach**  
   **Q:** How will international expansion progress?  
   **A:** They noted a strong focus on the U.S. private office segment due to ample greenfield opportunities, while cautiously evaluating international prospects.  **[BSEM_3389565_6]** 

3. **New Use Cases**  
   **Q:** New product applications planned?  
   **A:** Management emphasized their wound care focus but also mentioned exploring opportunities in the optics field with NovaBay and potential surgical applications.  **[BSEM_3389565_4]** 

4. **AI Integration**  
   **Q:** Will AI boost operational efficiency?  
   **A:** The team is considering AI to improve physician charting and note-taking processes, which could enhance workflow in their current market.  **[BSEM_3389565_7]** 

5. **Conference Insights**  
   **Q:** What emerged at SAWC?  
   **A:** At SAWC Spring, they engaged with key opinion leaders to strengthen clinical data efforts and advance their position in hospital markets.  **[BSEM_3389565_8]** 

9662d8f030ac62418663f85d1bc7f7ba02364ae92be767dbc9018bb051a81dd1

- **Phenomenal revenue growth and profitability:** In Q1 2024, net revenue surged to **$41.9 million** from **$600K** in the same quarter last year, achieving the first positive GAAP net income driven by the successful commercialization of AmnioWrap2.  **[BSEM_3389565_1]** **[BSEM_3389565_0]**
- **Expansion into diversified markets:** The company is actively advancing clinical trials for **Diabetic Foot Ulcer** and **Venous Leg Ulcer** indications and leveraging partnerships (e.g., with McCoy Clinical Consulting) to transition from a private office focus into broader hospital markets.  **[BSEM_3389565_0]** **[BSEM_3389565_2]**
- **Strengthening proprietary technology:** The prioritized examination of the patent application for its **BioREtain processing technology** bolsters the company’s intellectual property portfolio, offering a distinct competitive edge in the wound care space.  **[BSEM_3389565_0]**

cf945b9c178fc196a2d1732e15e6a57a51f5e5f004ee76c46b93991929441f67

1. Can you elaborate on how the current distribution cost structure with Venture Medical is designed and whether you plan to explore restructuring or exclusive deals to further optimize these expenses?  **[BSEM_3407905_6]** 
2. In light of questions around your tissue allograft products, how do you assess the feasibility and potential regulatory hurdles of developing an airbrush spray application for burn victims compared to its current sheet application?  **[BSEM_3407905_6]** 
3. With about **16 million** shares outstanding and additional warrants and options moving to NASDAQ, how do you expect this capital structure transition to impact shareholder dilution and market perception post-uplisting?  **[BSEM_3407905_6]** 
4. Can you provide more specific details on the buildup costs, particularly the increase in bona fide service fees from Q2 to Q3, and explain how these expenses align with your revenue growth strategy?  **[BSEM_3407905_9]** 
5. Given the recent clinical publications and trial enrollments, what are the specific milestones and timeframes you anticipate for achieving broader payer coverage and expanding market access for your allograft technology?  **[BSEM_3407905_1]** 

9adf687a9aa7a3e59472f2ca621aa59dea45fe5f9bd825db24bffa391bd7f0e9

- **Reimbursement Restrictions:** The proposed LCDs limit coverage to **15 of 200 products** and impose application caps, which could restrict reimbursement and reduce revenue for a significant portion of products.  **[BSEM_3389565_2]** **[BSEM_3389565_5]**
- **Concentration Risk in Private Office Segment:** With **60%-80%** of private office revenue coming from noncovered products, any negative changes in reimbursement could materially impact earnings.  **[BSEM_3389565_2]** **[BSEM_3389565_5]**
- **Execution and Expansion Uncertainty:** While there are plans to diversify into hospital markets and other use cases, the current focus on clinical trials and limited channels presents risks if these initiatives fail to deliver timely or adequate results.  **[BSEM_3389565_6]** **[BSEM_3389565_4]**

53b2854260df9e917142f36a1f22d4dfce2be7ae658055a8540cbc70df39bece

5227b2a54ddda67f686727153cd0bbec0a29d30cc3a72c5ed862bb80ecb6fab8

BIOSTEM TECHNOLOGIES (BSEM)

Analyst Coverage

Erik Voss

Bradley Sorensen

Bruce Jackson

Ernest Watts

Kevin

Kevin Peterson

Mitchell Sacks

Page Taggart

Paige Taggart

Peter Stoddard

Swayampakula Ramakanth

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