Jason Matuszewski, Chief Executive Officer and Chairman of BioStem Technologies. BioStem develops and commercializes placental-derived allografts for surgical applications in the hospital setting, spanning urology, orthopedics, spine, women's health, foot and ankle, and colorectal surgery. In January 2026, BioStem acquired BioTissue's surgical business, including the Neox and Clarix product lines, adding roughly $29 million of 2025 sales and national hospital sales force, and GPO contracts covering more than 70%. Good day, and thanks for joining us to have a conversation with Jason Matuszewski, Chief Executive Officer and Chairman of BioStem Technologies. BioStem develops and commercializes placental-derived allografts for surgical applications in the hospital setting, spanning urology, orthopedics, spine, women's health, foot and ankle, and colorectal surgery. In January 2026, BioStem acquired BioTissue's surgical business, including the Neox and Clarix product lines, adding roughly $29 million of 2025 sales and national hospital sales force, and GPO contracts covering more than 70% of U.S. hospital beds. Since then, hospital revenue has grown sequentially each quarter, and management raised their full year guidance range to $26 million-$29 million. BioStem very recently completed its uplisting to the Nasdaq Capital Market. I believe we have the honor to host BioStem as a newly minted Nasdaq-traded company to discuss the surgical pivot and what comes next. Let's get started with Jason. Jason, glad to see you, and appreciate you accepting our invitation to talk to our audience today. Thanks so much, RK. Really appreciate you guys having us here on this fireside chat. Jason, the uplisting required a KPMG appointment and also two years of completed audits. What was the real bottleneck? Was it the audit work or the financial profile needed to qualify? Yeah. First and foremost, it was definitely a lot of hard work and a huge thank you and congratulations to the rest of our team. Their dedication to getting through a lot of the processes, along with meeting with the SEC and Nasdaq uplisting requirements, as well as the audit work that you just mentioned. A substantial portion of that work was focused on 2023 and 2024- excuse me, 2024 and 2025 audits. As many of the investors have seen, we did a restatement of those financials and adopted a new revenue recognition methodology based on how we were transacting with our distributor partner at the time, Venture Medical, and our end customer. That didn't really change anything in regards to profitability or cash generation side of the business, or on the P&L, or the balance sheet. It was just more about rev rec. We've gotten through that and put that to the past, and we're looking forward to this year and the years to come being listed on the Nasdaq. Great. So a year from now, how would you want us to measure the return on the listing? Would it be institutional ownership, cost of capital, or actually currency for further surgical deals? Yeah, I think all of the above. We're really excited about being listed on the Nasdaq, and there's a significant amount of advantages for a business like ours to be listed on Nasdaq. All the benefits that you mentioned. Importantly, we are excited about what this really means for the visibility of our brand and our brand nationally and the increased ability to recruit and retain top talent, and folks on our team who can help commercialize the products, manufacture the products, and hopefully develop new products. Perfect. BioTissue's surgical business cost you roughly $15 million upfront, and that actually was bringing you $29 million of 2025 sales. What did you see that the seller did not see in themselves? Yeah. We really looked at this transaction as a strategic pivot, as you mentioned earlier in the introduction, really moving our business from the wound care physician office market into the surgical setting. BioTissue really developed a really strong portfolio of products, and we view that as being differentiated in the market and also complementary with our existing products, meaning that all of them are in the perinatal tissue space, so umbilical cord tissue, placental-based tissues. They all met the really robust quality and clinical standards, being an AATB-accredited facility like theirs. I think there's a lot of synergies. We also looked at how bringing on, not only is it a transaction of assets in the sense of products, but also a commercial team. We were able to ingest a lot of the commercial infrastructure and commercial team that we historically didn't have by transacting in the physician office with Venture Medical. We now have initially 15 reps, growing that to 30 W-2 reps, as well as a robust independent sales agents group, as well as the infrastructure to support from a billing and everything else in regards to supporting those folks in the field. Perfect. Hospital revenue is now the large majority of sales. Is it appropriate for us to describe BioStem as a surgical biologics company, or is that framing a bit premature? I think we maybe focus ourselves as more of a regenerative medicine company supporting healing in surgical applications across the body itself. Key areas that we really started to focus on is urology and women's health. All of the aggregate applications that we talk about in our presentation, that TAM kind of addresses roughly about $26 billion in market. I want to actually go back to your original question about maybe what BioTissue didn't see in the business that we had an opportunity to do. BioTissue wanted to focus on their ocular franchise as well. Us being able to acquire that surgical wound care business away from them allowed them to really focus on singular, their ocular franchise and take on a business where they were just really managing it for cash and not really managing it for investment of growth. We feel, as we acquired the business, rolled it into our organization, there's a great opportunity to grow that business as well. Very good. So now you have a $10 million contingent payment, which is tied to the 510(k) milestones, which is still on the balance sheet, and an extension you agreed with BioTissue. Where does that really stand, and how does it get paid? Yeah. BioTissue was recently awarded a 510(k) for that product. It's called Catalyze. Part of the transaction was that once they received that 510(k) award, then we would ultimately satisfy a milestone payment that you just mentioned. We are actively working on a strategic strategy on satisfying that payment. Hopefully, we are trying to be as conscious as possible in our capital planning as one of the reasons we continue to evaluate options to bolster our balance sheet, including non-dilutive alternatives. The manufacturer transfer actually starts in the first half of 2027, and that is actually expected to add about 15-20 points on your gross margin. What has to go right for that timeline to hold? Yeah. I think we have done some early on pre-work in conjunction with BioTissue to make sure that we are successful there. One of the values of the deal rationales was back what I said earlier about them focusing on placental-based tissue products and umbilical cord tissue products is we are really used to manufacturing those things, right? We have the inherent knowledge. We have capacity at our facility. Yeah. It's really about focusing on getting to that 12-month mark. How do we pre-work with the BioTissue team as we get closer and closer to that deadline? We're actively doing that now with them. Looking at, okay, what are the processes, what are the standard operating procedures, what are the quality documentation that we need to kind of put in place so that we can hit the ground running right away once that 12-month marker comes up. Right. Okay. Let's talk a little bit about your commercial build. You currently have over 40 W-2 reps and also 30+ agents. Sorry, this is what you're expecting to have by the year-end. This is roughly double the force that you have had since acquisition. What revenue per rep do you think that you can get these folks when they're finally ramped up? Yeah. We really inherited a great team from BioTissue. We didn't have a lot of attrition in the sense of once those folks made a jump from BioTissue to us. We're really pleased with that. Subsequently, we really focused on one of the big things coming out of the transaction was we entered into a transition services agreement or TSA. We just recently, in our last quarter call, talked about our successful integration and stand-up of our own ERP CRM solution. Those things are really working well. Getting to kind of your point about what does a great rep look like for BioStem think we see reps reaching somewhere between the $750,000- $1 million run rate. Typically we see that happening between 15- 18 months once we hire those new reps. Now, obviously there's some situations where folks are quicker to get to that jump point that have sold maybe similar products or similar call points. One of the value adds is that maybe back half of last year and into the beginning of this year, there's been some really great talent that sadly has been let go at competitor-based companies. We're really having an opportunity to identify some of those folks in areas and geographies that we think have an opportunity, a strong opportunity for us to achieve that kind of $750,000- $1 million run rate. Okay. You just talked about what the real TAM is, the surgical opportunity of roughly $26 billion, and that's actually over six different specialties. Which of these are genuinely accessible for you today? Which of them are basically a multi-year buildup that you and your team have to generate? One key, I'd say, landing spot is really urology. Post robotic-assisted radical prostatectomies, our products have been really shown to increase continence rates and also help patients return to continence quicker. We've also demonstrated some improvement in erectile dysfunction. On the strategy side, our goal is to look to land and expand into hospitals. What we mean by that is also to drive adoption of our products by a surgeon who will use a product in a particular case and then help educate his colleagues in the same specialty at that hospital on the benefits of our technology, and then more broadly within that hospital to other specialties. I would say the urology piece is really that kind of entry point of where we're looking to enter into those facilities and then broaden our use case across those six key areas that you mentioned earlier. Yeah. Talking about those six areas, right? Foot and ankle, orthopedics, and urology seem to be the mature drivers today, whereas colorectal and women's health are described as burgeoning. What's the rough revenue split and where do you think the next incremental sales dollar, and where does it go the furthest? Yeah, it's a great question. We really haven't identified or articulated revenue split by specialty- Okay. ...but we do look at a pretty even split between the Neox and Clarix product lines. Okay. Kind of somewhere, I would say, in that 50-50 split and across those two types of verticals. But at this time, we don't really identify on a specialty basis of that revenue identification. Okay, understood. Regarding your GPO contracts, they actually reach over 70% of U.S. hospital beds, but access doesn't mean utilization, right? Yes. What share of these facilities are actually open today, and how long does a typical VAC approval take in your case? It honestly varies, RK. Sometimes it's a quick process. Sometimes you catch it early in the process and you happen to submit all the Value Analysis Committee information, and they're meeting next week or two weeks. Some they meet on a quarterly or semi-annual basis, so it all depends. I think the big thing is, like you identified, GPO contracts help us start that conversation. There's areas where we can work with KOLs within those facilities to start utilizing product at a lower rate. Yeah. As we work through utilization, they get comfortable with it. They become a champion through that Value Analysis Committee and help us successfully get that product onto formulary. More recently, we actually got ability to announce that we are successful in getting our VENDAJE product lines on a few GPO agreements. We're really excited to see not only being able to offer the Neox and Clarix-based products, but then also now being able to offer our VENDAJE products as well. Very good. The first 510(k) cleared product launches later this year. What does this clearance actually unlock commercially for you, and how fast do you think these dollars will show up on your top line? Yeah, I think, obviously, having the device designation allows us to expand our communication efforts around the product. Historically, in 361 human cell or tissue-based products line, you can only really talk about the product as a barrier cover historically. It is somewhat challenging to articulate the value and the benefits and the attributes of these products without doing some pretty rigorous clinical trial work that we historically have done in the VLU and DFU space. With the 510(k) clearance, we are able to actually make direct indicated claims based on that device. We are really excited to be able to demonstrate the ability and the impact of that product in specific claim scopes. We think there is going to be a lot of value in being able to get out there in the marketplace and talk about the product and the use case and train some of the physicians and KOLs about the product and the value and the benefits not only to them, but also their patients. Okay. In terms of financials, your Q2 revenue was $7.9 million. That actually generated a $4.6 million adjusted EBITDA loss. What quarterly revenue run rate gets you to breakeven, and also does that mean you need to have the manufacturing transfer first to get to the breakeven? Yeah, I think getting the tech transfer over and the manufacturing in-house will definitely support driving that EBITDA loss to zero and frankly up to EBITDA positive. That's why we're driving pretty aggressively on getting that done right at that 12-month mark or if not very soon. Obviously, there's going to be product that we purchase and bought from BioTissue up until that point that will probably take maybe three to six months to trickle through. So we won't see it, kind of a bright line there and direct impact, but we'll see that kind of play out as we go into 2027. The huge thing is moving those gross margins up, getting closer to our peers in that high 70s, low 80s mark. Over the coming years, we'll continue to invest in the business and we build the foundation of growth, but also expect to show leverage and improving profitability over the coming years. The other side of that equation is as we get to completion of tech transfer, we're going to create more efficiencies at our own facility. Our own facility is only currently manufacturing of VENDAJE product lines, and start at a very low capacity rate. So there's some economics of scale as we start manufacturing more and more product out of that facility, that cost and overhead of our facility hopefully gets normalized. Hopefully, that hourly rate comes down based on higher output from our facility as well. Okay. So you ended the quarter with $7 million of cash and said that you would be evaluating some non-dilutive options. What's actually on the table? Is there a share price below which you simply will not be issuing any equity? Yeah, I think we know we need to strengthen the balance sheet, and we're going to be very mindful of making profitable investments and keeping costs in check and continue to grow in a way where we simultaneously are improving profitability until we get there. We continue to look at options that are evaluating lower cost of capital and be mindful of dilution to shareholders. That's really been the key driver of what decision we make and how we make it. But we're also very excited to invest behind the products and the team we're building. There's substantial need in the marketplace for surgeons to enjoy using our products. We're expanding access to those products at attractive economics for all of our stakeholders through a large portion of these GPO agreements. Okay. So two deals this year are useful yardsticks. Yep. Solventum is paying up to $850 million for Acera Surgical, which is roughly 8x-9x revenue. MiMedx is paying about $350 million, roughly 3x the revenue for Sanara MedTech, explicitly to accelerate their surgical growth. BioStem itself paid a fraction of a ton of revenue for BioTissue. So how do you square that gap and where should BioStem's own multiple sit, once the paper is completely proven? It's a great question, RK. When you think about what's the common thread here between those transactions, they're really about a business that's generating probably close to $90 million-$100 million in top-line revenue. Now, obviously, the BioTissue acquisition was in the high 20s, low 30s. The also element I would say to these transactions with these multiples is really about the product and its FDA approval status. All of the products that you just mentioned in those transactions are all 510(k) devices. In the transaction that we just completed with BioTissue, they're all 361 human cell or tissue-based products. So where I think as we get more and more upstream with our products as devices, I think we can start seeing a more common multiple in value to the assets and the value to the business as we move our regulatory and upregulate the products. Just like Catalyze getting the 510(k). So we're excited. You mentioned we got it at a fraction of the price. I think that bodes well for our negotiations and frankly, the value that hopefully we can deliver to shareholders, and hopefully it's representative in the market cap of our organization as we continue to grow the business. Okay. MiMedx and Solventum are both buying surgical diversification compared to their base business. Is BioStem building toward being a consolidator, especially with this new public currency that you have? Or is it a logical target for the same strategy that these big players are executing? I would say we're evaluating our options strategically as we move forward. But right now, we are head down on focusing on the integration and the execution and scaling of the current business. There's a lot of work to be done as we go through the middle of this year in integrating the ERP and CRM and standing up our own instances, building that commercial team. As you mentioned, our goal is to get to 40 W-2 sales reps. When we first inherited and acquired the business, we had 15. We grew that to 30. And we're going to continue to row that business. And that takes scale and human capital to be successful in doing that and get everybody to sing on the same page of music. But I think there's still ways to create value within the current product portfolio. And I think right now we see a very straightforward path to doing that and continue to grow top-line results. But we always keep our head up and on a swivel. There might be a strategic opportunity in the future that as we kind of, I'll say, get the boat on plane here with this transaction, that there may be opportunity to support and accelerate growth in this channel. Okay. For the last question, looking at 12 months, what single achievement would most move how the market really values BioStem? And what two or three things should investors hold you accountable by the year-end? Yeah, I would say probably number one, strengthening the balance sheet. You asked several times in this fireside about how do we satisfy that 510 payment and how do we capitalize the company for success and growth. So definitely number one, strengthening the balance sheet. I would say second, hitting guidance. We just initiated and put out our first guidance. We increased the lower end of our guidance- Yeah. ...as we go into the back half of this year. Really as a now minted Nasdaq-listed company, that is a key area of ours, making sure that we're putting out the right guidance and achieving and executing on the business plan to hit that guidance. Last but not least, launching their first 510(k). We're really excited about Catalyze and what the value that can drive, especially being able to have the opportunity to articulate the value and benefits of that product to patients and providers near and long term. Perfect. Thank you very much. Thanks for coming onto our fireside chat today. Good luck, and I'm sure we'll see you soon. Thanks so much, RK. Really appreciate you guys having us. Thank you.