BioStem Technologies Reports Second Quarter 2022 Operating and Financial Results
Company to Host a Conference Call and Webcast on August 22, 2022, at 4:30 pm EDT
POMPANO BEACH, FLORIDA., Aug. 22, 2022 (GLOBE NEWSWIRE) -- BioStem Technologies Inc. BSEM, a leading regenerative medicine company focused on the development, manufacture, and commercialization of placental derived biologics, today reported financial results for the quarter ended June 30, 2022.
Jason Matuszewski, Chief Executive Officer of BioStem Technologies Inc. said, "We made strong operational and financial progress in the second quarter of 2022. We continue along our rapid growth trajectory with gross revenue of $2.2 million and an 82% gross margin for the quarter. This is a result of our highly experienced commercial team that we continue to build out to match the pace of our growth and expanding product portfolio around our BioRetain Process."
Business Updates:
- Continued transition from an indirect salesforce to a direct salesforce along with the implementation of sales training programs for more compelling product messaging
- BioRetain®: BioStem's Operations, Research, and Development teams continue to develop the proprietary processing technology called BioRetain®, which will help preserve the biologic qualities of the Company's products. The company will soon be engaging with several market development focus groups, industry thought leaders, and key stakeholders.
- VENDAJE®, VENDAJE AC® and VENDAJE Optic®: BioStem Will be expanding its product offering in the second half of the year with VENDAJE AC® and VENDAJE Optic®. This will allow the company to become a recognized leader in Advanced Wound Care, Surgical, and Plastic & Dermatology.
Three-months Ending June 30, 2022, - Financial Results Summary
- Net revenue of $2.158 million for quarter ended June 30,2022, up 133%, compared to net revenue of $0.926 million for the quarter ended June 30, 2021.
- Gross profit for the quarter ended June 30, 2022, was $1.773 million, or 82% of revenue, compared to $0.484 million, or 52% of net revenue, for the quarter ended June 30, 2021, an increase of $1.289 million, or 266%.
- Net income of $0.203 million for the quarter ended June 30, 2022, compared to a net loss of ($0.372) million for the quarter ended June 30, 2021, an improvement of $0.575 million and 155% over the quarter ended June 30, 2021.
- Adjusted EBITDA of $0.591 million, or 27% of net revenue, for the quarter ended June 30, 2022, compared to Adjusted EBITDA loss of ($0.166) million, or (18%) of net revenue, for the quarter ended June 30, 2021, an improvement of $0.757 million or 455%. See the GAAP to Adjusted EBITDA reconciliation below.
Six-Months Ending June 30, 2022, - Financial Results Summary:
- Net revenue of $4.936 million year-to-date June 30, 2022, up 173%, compared to net revenue of $1.809 million for the six-months ended June 30, 2021.
- Gross profit for the six-months ended June 30, 2022, was $4.191 million, or 85% of revenue, compared to $1.088 million, or 60% of net revenue, for the six months ended June 30, 2021, an increase of $3.104 million, or 285%.
- Net loss of ($0.654) million year-to-date June 30, 2022, compared to a net loss of ($0.433) million for the six-months ended June 30, 2021, an increase in net loss of $0.221 million and 51% over the six-months June 30, 2021.
- Adjusted EBITDA of $2.141 million, or 43% of net revenue, for the six-months ended June 30, 2022, compared to Adjusted EBITDA of $0.127 million, or 7% of net revenue, for the six-months ended June 30, 2021, an improvement of $2.014 million or 1,588%. See the GAAP to Adjusted EBITDA reconciliation below.
Quarter and Year-to Date ending June 30, 2022 - Results:
The following table represents net revenue, gross margin, operating expenses, and other income (loss) for the three and six-months ended June 30, 2022, and June 30, 2021, respectively:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||||
| Net revenue | $ | 2,157,823 | $ | 926,311 | $ | 1,231,512 | 133 | % | $ | 4,936,361 | $ | 1,808,684 | $ | 3,127,677 | 173 | % | ||||||||||||||||
| Gross Profit | $ | 1,772,853 | $ | 484,130 | $ | 1,288,723 | 266 | % | $ | 4,190,824 | $ | 1,087,193 | $ | 3,103,631 | 285 | % | ||||||||||||||||
| Gross Profit % | 82 | % | 52 | % | 30 | % | 85 | % | 60 | % | 25 | % | ||||||||||||||||||||
| Operating Expenses | $ | 1,437,899 | $ | 721,535 | $ | 716,364 | 99 | % | $ | 4,611,708 | $ | 1,398,653 | $ | 3,213,055 | 230 | % | ||||||||||||||||
| Other Income (Loss) | $ | (131,543 | ) | $ | (134,329 | ) | $ | 2,786 | 2 | % | $ | (233,330 | ) | $ | (121,528 | ) | $ | (111,802 | ) | 92 | % | |||||||||||
Statement of Operations Highlights-Year to Date June 30,2022:
Net revenue for the six-months ended June 30, 2022, was $4.936 million, compared to $1.809 million for the quarter ended June 30, 2021, an increase of $3.128 million, or 173%. The increase in sales was driven primarily by the expansion of our distribution network resulting in increased sales of our Vendaje product. Since CMS granted a Q-Code in September 2021, we've seen additional market acceptance and additional sales volume.
Gross profit for the six-months ended June 30, 2022, was $4.191 million, or 85% of net revenue, compared to $1.088 million, or 60% of net revenue, for the quarter ended June 30, 2021, an increase of $3.104 million, or 285%. The increase in gross profit resulted primarily from increased sales volume due to the strength in our Vendaje products as well as a shift in product mix to our higher gross margin products.
Operating expenses for the six-months ended June 30, 2022, were $4.612 million, compared to $1.399 million for the six-months ended June 30, 2021, an increase of $3.213 million or 230%. Increase in operating expenses is primarily driven by additional headcount, additional marketing expense, investments in a direct sales force, and increases in share-based compensation related to the conversion of debt and accrued salaries at a discount to the fair value of equity on the date of conversion.
Total other (expense) income, net, for the six-months ended June 30, 2022, were ($0.233) million, compared to ($0.122) million for the six-months ended June 30, 2021, an increase in expense of $0.111 million or 92%. The six months ended June 30, 2021, contains the benefit of the one-time PPP loan forgiveness of $0.142 million.
Net loss for the six-months ended June 30, 2022, was ($0.654) million, or ($0.06) per share, compared to of ($0.433) million, or ($0.05) per share, for the six-months ended June 30, 2021, an increase to net loss of ($0.221) million, or ($0.01) per share.
Statement of Cashflows and Balance Sheet Highlights:
Cashflows provided by operations was $0.664 million for the six-months ended June 30, 2022, compared to cashflows provided by operations of $0.118 million for the six-months ended June 30, 2021. Increase is cash provided by operations is due to management's continued discipline over operating expenses as well as to an increase in product sales.
The Company maintained cash on hand as of June 30, 2022, $1.372 million compared to $0.270 million as of June 30, 2021.
The Company continues to strengthen its balance sheet. The Company converted $3.318 million of liabilities to common stock during the six-months ended June 31, 2022.
BIOSTEM TECHNOLOGIRES INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
June 30, 2022 |
December 31, 2021 |
|||||||
| UNAUDITED | UNAUDITED | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,372,161 | $ | 340,333 | ||||
| Accounts receivable, net of allowance for doubtful accounts of $133,337 and $0, respectively | 489,150 | 300,137 | ||||||
| Inventory, net | 687,500 | 325,381 | ||||||
| Prepaid expenses and other assets | 138,216 | 38,572 | ||||||
| Other receivables | - | - | ||||||
| Other current assets | (89 | ) | (489 | ) | ||||
| Total current assets | 2,686,938 | 1,003,934 | ||||||
| Property, plant, and equipment, net | 1,392,022 | 1,245,363 | ||||||
| Right-of-use asset, net | 32,941 | 32,868 | ||||||
| Intangible assets | 181,405 | 210,048 | ||||||
| Goodwill | 244,635 | 244,635 | ||||||
| Total assets | $ | 4,537,941 | $ | 2,736,848 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 427,160 | 647,256 | |||||
| Accrued interest | 1,392,925 | 1,301,670 | ||||||
| Salaries payable | - | 1,167,418 | ||||||
| Other convertible notes payable | 473,350 | 473,350 | ||||||
| Notes payable, current | 3,152,813 | 3,252,735 | ||||||
| Short-term finance lease liability | 15,444 | 26,878 | ||||||
| Other current liabilities | 215,843 | 400,547 | ||||||
| Total current liabilities | 5,677,535 | 7,269,854 | ||||||
| Related party notes payable | 475,260 | 507,861 | ||||||
| Notes payable, noncurrent | 904,480 | 563,820 | ||||||
| Other Long-Term Liabilities | 151,777 | 170,207 | ||||||
| Long-term finance lease liability | 15,904 | 6,543 | ||||||
| Total liabilities | 7,224,956 | 8,518,285 | ||||||
| Shareholders' deficit: | ||||||||
| Series A convertible preferred stock, $0.001 par value; authorized, 300 shares; issued and outstanding, 300 shares as of September 30, 2021 and December 31, 2020, respectively | - | - | ||||||
| Series B convertible preferred stock, $0.001 par value; authorized, 500,000 shares; issued and outstanding, 5 shares as of September 30, 2021 and December 31, 2020, respectively | - | - | ||||||
| Common stock, $0.001 par value; authorized, 975,000,000 shares; issued and outstanding, 9,681,232 and 9,203,928 shares as of December 30, 2021 and December 31, 2020, respectively | 11,569 | 9,681 | ||||||
| Additional paid-in capital | 28,197,564 | 24,772,253 | ||||||
| Common stock to be issued | - | 1,192 | ||||||
| Deferred compensation | - | (322,527 | ) | |||||
| Treasury stock | (43,339 | ) | (43,339 | ) | ||||
| Translation adjustment | - | (100 | ) | |||||
| Accumulated deficit | (31,118,517 | ) | (30,363,986 | ) | ||||
| Total stockholders' equity attributable to BioStem Technologies, Inc. stockholders' | (2,952,723 | ) | (5,946,826 | ) | ||||
| Noncontrolling interest in consolidated subsidiaries | 265,706 | 165,391 | ||||||
| Total stockholders' deficit | (2,687,017 | ) | (5,781,435 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 4,537,940 | $ | 2,736,848 | ||||
BIOSTEM TECHNOLOGIRES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three-months ended, | Three-months ended, | Six-months ended, | Six-months ended, | |||||||||||||
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||
| Net revenue | $ | 2,157,823 | $ | 926,311 | $ | 4,936,361 | $ | 1,808,684 | ||||||||
| Cost of goods sold | 384,970 | 442,181 | 745,537 | 721,491 | ||||||||||||
| Gross profit | 1,772,853 | 484,130 | 4,190,824 | 1,087,193 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Compensation expense | 876,728 | 463,510 | 3,697,707 | 873,561 | ||||||||||||
| Professional fees | 245,779 | 120,634 | 351,272 | 217,975 | ||||||||||||
| Other general and administrative expenses | 259,341 | 68,269 | 439,112 | 155,613 | ||||||||||||
| Depreciation and amortization expense | 56,051 | 69,122 | 123,617 | 151,504 | ||||||||||||
| Total operating expenses | 1,437,899 | 721,535 | 4,611,708 | 1,398,653 | ||||||||||||
| Income / (loss) from operations | 334,954 | (237,405 | ) | (420,884 | ) | (311,460 | ) | |||||||||
| Other income (expense) | ||||||||||||||||
| Interest income | 1 | - | 1,376 | - | ||||||||||||
| Gain on sale of subsidiary | 1,890 | 1,890 | ||||||||||||||
| Gain on sale of Equipment | 407 | 380 | ||||||||||||||
| Legal settlement | - | - | 20,000 | - | ||||||||||||
| Interest expense | (123,307 | ) | (136,219 | ) | (247,634 | ) | (265,870 | ) | ||||||||
| Gain on forgiveness of PPP loan | - | - | - | 142,452 | ||||||||||||
| Non-Operating expense | (8,644 | ) | (7,452 | ) | - | |||||||||||
| Total other income (expense) | (131,543 | ) | (134,329 | ) | (233,330 | ) | (121,528 | ) | ||||||||
| Net income / (loss) from operations before income taxes | 203,411 | (371,734 | ) | (654,214 | ) | (432,988 | ) | |||||||||
| Income tax expense (benefit) | - | - | - | - | ||||||||||||
| Net income / (loss) | 203,411 | (371,734 | ) | (654,214 | ) | (432,988 | ) | |||||||||
| Less: Net income / (loss) attributable to noncontrolling interest | (17,641 | ) | (12,638 | ) | 100,315 | (16,357 | ) | |||||||||
| Net (loss) attributable to BioStem Technologies, Inc. | $ | 185,770 | $ | (384,372 | ) | $ | (553,899 | ) | $ | (449,345 | ) | |||||
| Income / (loss) per share before noncontrolling interest | $ | 0.02 | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.05 | ) | |||||
| Income (loss) per share attributable to noncontrolling interest | $ | (0.00 | ) | $ | (0.00 | ) | $ | 0.01 | $ | (0.00 | ) | |||||
| Basic and diluted net loss per share attributable to common stockholders of BioStem Technologies, Inc. | $ | 0.02 | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.05 | ) | |||||
| Basic and diluted weighted average common shares outstanding | 11,685,291 | 9,261,367 | 10,731,773 | 9,254,536 | ||||||||||||
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:
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | 2022 | 2021 | $ Change | % Change | |||||||||||||||||||||||||
| Net income (loss) | $ | 203,411 | $ | (371,734 | ) | $ | 575,145 | 155 | % | $ | (654,214 | ) | $ | (432,988 | ) | $ | (221,226 | ) | 51 | % | ||||||||||||
| Interest expense | 123,307 | 136,219 | (12,912 | ) | 9 | % | 247,634 | 265,870 | (18,236 | ) | -7 | % | ||||||||||||||||||||
| Depreciation and amortization | 56,051 | 69,122 | (13,071 | ) | -19 | % | 123,617 | 151,504 | (27,887 | ) | -18 | % | ||||||||||||||||||||
| EBITDA | $ | 382,769 | $ | (166,393 | ) | $ | 549,162 | 330 | % | $ | (282,963 | ) | $ | (15,614 | ) | $ | (267,349 | ) | 1712 | % | ||||||||||||
| Share-based compensation | 208,677 | - | 208,677 | 2,423,594 | - | 2,423,594 | ||||||||||||||||||||||||||
| Gain on extinguishment of PPP loan | - | - | - | - | 142,452 | (142,452 | ) | -100 | % | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 591,446 | $ | (166,393 | ) | $ | 757,839 | 455 | % | $ | 2,140,631 | $ | 126,838 | $ | 2,013,793 | 1588 | % | |||||||||||||||
Conference Call Details
Date: Monday, August 22, 2022
Time: 4:30 pm EDT
Webcast Link:
https://event.on24.com/wcc/r/3911284/BE0F9AAF8531A6FE6131F4DBA6ADCF55
Conference ID: 4373739
Participant Toll-Free Dial-In Number: 1 (888) 880-2204
Participant Toll Dial-In Number: 1 (646) 960-0414
In order 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. BSEM: 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 VENDAJETM, VENDAJETM AC, and VENDAJETM OPTIC. Each BioStem Technologies placental allograft is processed at the Company's FDA registered and AATB accredited site in Pompano Beach, Florida.
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.
BioStem Technologies, Inc.
Phone: 954-380-8342
Website: http://www.biostemtechnologies.com
Email: info@biostemtech.com
Twitter: @BSEM_Tech
Facebook: BioStem Technologies
Investor Relations:
Russo Partners, LLC
Maxim Jacobs, CFA
12 West 27th Street, 4th Floor
New York, NY 10001
T: 646-942-5591
Maxim.Jacobs@russopartnersllc.com
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