Biostem Technologies New

Good day, everyone, and welcome to the BioSTEM Technologies fourth quarter and full year 2024 conference call. Just a reminder that today's call is being recorded. At this time, I would like to hand things over to Mr. Adam Holtzforth. Please go ahead.

Good afternoon, everyone, and thank you for joining our conference call to discuss BioSTEM's fourth quarter full year 2024 financial results and corporate highlights. Leading the call today will be Jason Monoshevsky, the company's founder and chief executive officer, and Mike Fortunato, the company's chief financial officer. Before we begin, I'd like to remind everyone that our remarks today may contain forward-looking statements based on the current expectations of management, which involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated. These risks are described in the company's filings with the -the-counter market. We were cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made and may change at any time. While we may update or revise these statements from time to time, the company undertakes no commitment to do so unless required by a political securities laws. This call also includes references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAP. We generally refer to these as non-GAP financial measures. Reconciliation of these non-GAP financial measures to the most comparable GAP measures are available in the company's earnings press release on the investor relations section of Biosense's website. With that, I'm now pleased to turn the call over to Jason Monoshevsky. Jason?

Thank you, Adam, and thank you all for joining us today. Before we begin today's call, I want to turn the call over to Mike to address the delay in our Form 10 and the challenges we've encountered related to revenue and recognition under ASC 606. We believe that these are the remaining issues associated with allowing our Form 10 to become effective.

Thanks, Jason. The accounting complexity surrounding our distribution agreement with venture has required a significant amount of dialogue with our auditors at the SEC, particularly around the treatment of bona fide service fees paid to venture. We believe there are three potential outcomes for our financial reporting going forward, depending on the final resolution. One, a gross revenue model with adjustments to the timing of revenue recognition based on sell-through to end-user positions. Two, a hybrid net model where a portion of the bona fide service fees are treated as pass-throughs and remain in sales and marketing expense. And three, a fully net model where all of the bona fide service fees are netted against revenue, which could materially impact reported revenue. We would not expect any material change to net income, adjusted EBITDA or EPS as a result of these discussions or the SEC review process. We are working diligently with our legal and accounting advisors to resolve this matter and remain confident in our underlying business fundamentals. We appreciate your patience as we complete this important step to ensure our Form 10 is both accurate and aligned with all applicable guidance. I'll turn the call back over to Jason.

Thanks, Mike. I'm proud to report a milestone quarter and year for Biosem Technologies. For Q4 2024, consistent with our current accounting policies, we achieved revenue of 102.9 million, a significant increase from 11.5 million in the same quarter of 2023. For the full year, revenue reached 301.8 million, reflecting robust market demand, successful nationwide launches and strategic execution across our portfolio. Our strong gross margin of 95% underscores our focus on operational efficiency and scalability, particularly during the significant product launch such as that of Vendahe AC. We delivered positive gap net income of 15.5 million this quarter and 37.9 million for the year, with adjusted EBITDA of 11.1 million for Q4 and 39.4 million for the year. These outstanding results were driven by strong adoption of our proprietary biorepairing technology powering AmniRap2 and Vendahe AC. I want to specifically recognize our partner, Ventra Medical, for their instrumental role in accelerating our growth and commercial success. Looking ahead, our nationwide CMS approved pricing for Vendahe AC positions us competitively for 2025. We continue to invest strategically in clinical validation efforts to substantiate the clinical superiority of our products, which we believe will continue to drive market penetration and payer coverage. Our first randomized clinical trials are underway in diabetic foot ulcers and venous leg ulcers, with initial data expected by mid-2025. In the policy landscape, we've actively engaged with CMS, congressional leaders, and industry stakeholders to advocate for fair reimbursement frameworks that balance patient access to the most innovative technologies and responsible utilization. We were pleased that this past Friday, CMS announced a second delay in the implementation of the local coverage determination policy. It has now been delayed until January 1st of 2026. We remain confident that through continued dialogue with all stakeholders, the final resolution will be a positive outcome for patients, providers, payers, and the overall industry. On our uplifting strategy, we are working toward addressing the remaining SEC comments and finalizing necessary documentation. Our NASBEC listing approval is contingent only on the effective Form 10, which we anticipate soon. Uplifting to NASBEC remains a pivotal milestone, broadening our access to institutional investors and enhancing our long-term shareholder value. I'll now turn the call over to Mike Fortunato for our more detailed financial review.

Thank you, Jason, and good afternoon, everyone. We appreciate you joining us today, and I will now present BioSTEM's fourth quarter 2024 and year-end financial results, which were a record achievement for the company. As I discussed earlier, these results are unaudited and reported consistent with our current accounting policies and are subject to change, which could be material based on our resolution of SEC comments and final closing of our year-end audit. For the fourth quarter of 2024, net revenue was $102.9 million compared to $11.5 million from the same period in 2023, reflecting an increase of $91.3 million year over year. This increase was driven primarily by the nationwide launch of the Dahi AC and continued market demand for MREP2. Gross profit for the fourth quarter was $99.3 million, or 97% of net revenue, compared to $10.9 million, or 95% of net revenue for the same period in 2023, reflecting an increase of $88.4 million. This improvement was largely due to the nationwide launch of the Dahi AC and continued demand for MREP2. Operating expenses for the fourth quarter of 2024 were $90.9 million compared to $11.2 million for the fourth quarter of 2023, an increase of $79.7 million. The increase in operating expenses is primarily due to increased headcount, higher bona fide service fees driven by an increase in sales through our partner, Venture Medical. Expenses associated with the launch of the Dahi AC and increases in share-based compensation. We are also pleased to report that we achieved our fourth consecutive quarter of positive gap net income. Net income for the fourth quarter was $15.5 million, or 94 cents per share, and adjusted EBITDA of $11.1 million. Turning now to full-year results, net revenue for 2024 was $301.8 million compared to $16.7 million for the same period in 2023, an increase of $285.1 million. This increase was driven primarily by the nationwide launch of the Dahi AC and continued market demand for Ameliorap 2. Gross profit for the 12-month period was $288.1 million, or 95% of net revenue, compared to $15.4, or 92% of net revenue for the same period last year, an increase of $272.7 million. This growth is primarily attributable to new sales volumes for the launch of the Dahi AC and the continued growth of Ameliorap 2. Operating expenses for the 12 months of 2024 were $256.9 million compared to $23.2 million for the same period last year, an increase of $233.7 million. The increase is primarily due to higher costs related to scaling our operations, including workforce expansion, higher bona fide service fees driven by an increase in sales through our partner, venture medical, and increases in share-based compensation. Net income for fiscal 2024 was $31.9 million, or $1.95 per share, with an adjusted EBITDA of $39.4 million. In addition, our cash balance has increased from $14.6 million from the previous quarter to $22.8 million in the fourth quarter, an increase of $8.2 million. During the fourth quarter of 2024, we completed a detailed deferred tax study, including a Section 382 analysis and confirmed that there were no limitations existing in our ability to use prior accumulated net operating loss carry forwards. As a result, we utilized 100% of our federal and Florida net operating loss carry forwards, totaling approximately $54.7 million. The utilization of these loss carry forwards fully offset our income tax expense in the amount of $5.8 million recognized through September 30th, and resulted in an additional income tax benefit of $7.1 million for the fourth quarter of 2024. The full year income tax benefit, as a result of fully utilizing our net operating loss carry forwards, was $1.3 million. As we look ahead to 2025, we are confident that these strong fourth quarter results, combined with the successful execution of our strategic initiatives, positioned by us and for sustained growth and success, we remain focused on driving expansion, increasing profitability, and maximizing value for our shareholders. I'll now turn the call back over to Jason for an update on operational highlights.

Thank you, Mike. As we close this record-breaking year, I want to briefly highlight four key pillars driving BioSIM's continued success and what we are really excited about in 2025. First, our strong financial performance has positioned us exceptionally well. Additionally, our increased cash position has further strengthened our balance sheet, providing a solid financial foundation to support our ongoing strategic initiatives and future growth. Our cash balance has increased to $22.8 million at the end of Q4, up from $14.6 million in the previous quarter, reflecting an improvement of $8.2 million. Second, our nationwide launch of Bendahe AC, alongside the continued market strength of Amnur-Rep 2, represents a critical milestone in our commercial strategy. The CMS national pricing approval, effective from Q4, has significantly expanded patient access across the US, further accelerating our growth trajectory in the chronic wound care market. We are strategically focused on transitioning more customers to Bendahe AC for enhanced brand continuity within the Bendahe product family, while simultaneously reducing our SG&A expenses by eliminating licensing fees associated with Amnur-Rep 2, which we believe will ultimately improve our bottom line. Third, our commitment to clinical excellence remains strong. We are currently conducting three randomized controlled clinical trials. Our first trial, evaluating our bioretained Amnion Corian Allograft for diabetic foot ulcers, has enrolled 75% of the patients to date, with enrollment to complete in the coming months. Our second trial, assessing Amnion Allograft for diabetic foot ulcers, began enrollment in January, and has enrolled over 30% of the patients to date. Our third trial, recently IRB approved in enrolling patients, focuses on the non-healing venous leg ulcers. 37 sites comprising of large institutions, academia, and clinical research sites are currently participating in these studies, with several more in process. These trials are progressing as planned, with early data readouts expected by mid to late 2025, and final results anticipated in early 2026. Fourth, we remain actively engaged with CMS, Congress, and industry stakeholders regarding CMS's local coverage determination policy through Project EPIC. Efficiency provides improved care. Project EPIC proposes a national framework designed to bring standardized regulatory and reimbursement regulation, improved patient access, and sustainable innovation to wound care. It seeks rescission of restrictive LCDs, stabilization through temporary payment freezes, anchored to Q4 2024 ASP, and the eventual introduction of a national coverage determination, and evidence-based reimbursement model, that recognizes the benefits of superior products, driving improved patient outcomes. Notably, recent analysis published in the peer review journal of wound care, indicate that the proposed restrictive LCD could inadvertently increase Medicare trust fund expenditures significantly. Restricting treatments to an arbitrary number of applications over a fixed period, could lead to higher rates of treatment failure, increased hospitalizations, amputations, emergency visits, and overall healthcare resource use, ultimately increasing Medicare expenditures by potentially hundreds of millions of dollars annually. Project EPIC provides a thoughtful alternative aimed at balancing cost containment, clinical flexibility, and optimized patient outcomes. Since publicly introducing Project EPIC, we have received overwhelming positive feedback from industry peers, policymakers, healthcare providers, and patient advocacy groups, all recognizing the potential of this balanced approach to improve patient access and accelerate innovation in wound care. There are two additional matters that I would like to provide further clarity on. First, I want to address our announcement last November of the signing of a letter of intent to acquire commercial stage products and development technologies from Progenicare Global. Following due diligence, we decided to pause the acquisition process. And as a lender, we are continuing to follow their progress. Moving forward, we remain actively engaged in evaluating opportunities for acquisitions, joint ventures, or other agreements that we will expand our product portfolio and our market penetration. Secondly, I want to address the FDA warning letter we received dated January 17th of 2025, related to FDA's September 2023 inspection of our manufacturing facility in Pompano Beach, Florida. The warning letter cited observations concerning four injectable-based products, namely Oropro, Proviscus, Neofil, and Rio. After the inspection, but before the warning letter, we had already ceased manufacturing and distribution of these four products as of late February 2024, which represented less than a quarter of 1% of our 2024 net revenue. In the warning letter, FDA explained that the agency determined these products did not qualify for regulation solely under section 361 of the Public Health Service Act as tissue products, but were instead subject to regulation as a biological product. In response to the warning letter, we submitted a comprehensive written response to the FDA on February 10th, 2025, outlining our plan for addressing all identified concerns. We reiterated our decision to discontinue the manufacturing and distribution of the four products and detailed corrective actions, enhancements to our quality management systems, and compliance measures aligning with FDA regulations for our current tissue product portfolio. More importantly, our current products have received written confirmation from the Tissue Reference Group at the FDA that they meet section 361 criteria, confirming the regulatory pathway for the current portfolio is considered a tissue product, while the observations cited in the warning letter, on the other hand, were issued under the regulations applicable to the manufacturing of drugs and biologic products. The warning letter citations are therefore not directly relevant to the products that we currently manufacture and distribute. However, we recognize that there are some similarities between the processing regulations for tissue products and manufacturing regulations for drug and biological products, and our corrective actions are designed to address these commonalities and opportunities for improvement. We continue to provide regular updates to the FDA on our progress and remain fully committed to maintaining the highest standards of product quality, safety, and regulatory compliance. On the public company front, our pathway to uplifting to NASDAQ is clear and defined and progressing. We are actively addressing the FCC comments and finalizing the amended Form 10 filings required for NASDAQ listing. We believe achieving this milestone will significantly enhance biosecurity visibility, credibility, and access to broader institutional investment, creating long-term shareholder value. Looking ahead to 2025, we are confident that the strategic initiatives we've established will sustain our strong momentum. We expect continued financial growth, further clinical validation, expanded payer coverage, and ongoing market penetration of our core products, Amnioreptu and Vendahe AC. We are also actively exploring opportunities to expand our advanced wound care portfolio and to launch our platform technology into complementary market sectors. I want to express my gratitude to our exceptional team at Biostem. As well as our trusted partner, Venture Medical, our shareholders, and all our stakeholders who contribute daily to our vision of improving outcomes in patients with chronic wounds. With that, operator, please open the line for questions.

And once again, everyone, if you would like to ask a question today, please press star one on your telephone keypad. Once again, it is star one if you have a question. We'll pause for just a moment to assemble the roster. We'll take our first question today from Swayam Pakula Ramakant with -Wayne-Ryke.

Good afternoon. This is RK from Hitsie Wainwright. How are you doing this afternoon? Good. A couple of quick questions. The first one, you know, I'm wondering what sort of payments are these? And then, you know, and how much is it going to impact your reported, you know, revenue lines? And how, and how, you know, it's not easy to figure out with the regulatory bodies, but in general, you know, what is your expectation in terms of timing for the uplacement?

Jason, do you want me to take that?

Yeah, go for it, Mike.

Sure, sure. So thanks for the question. Yeah, this, you know, the basic issue here is the payments we make to Venture Medical are classified currently as sales and marketing expense in OpEx. The question that the SEC is asking is around, you know, whenever you make payments to a customer, the question becomes is that a discount or is it for bona fide services or some distinct services they're providing? You know, the way we've accounted for it, we believe they're distinct services. It's a sales and marketing engine for us in getting our goods to the end user customers. And so they're just going, you know, there's a highly technical it's taking longer than I'd like, but we just submitted a response back from the SEC staff on the same couple days ago. So I'm looking forward to hearing from them. So the end of the day, it's really geography and the income statement, the question, essentially the bona fide service fees you see in the sales and marketing expense. I think we actually have them separately classified. Those would move if the SEC says, look, you got to do this on a net revenue basis. Essentially, it would go against revenue. So revenue would come down by that amount, but also sales and marketing would come down. So when we talk about, you know, net income, EBITDA, et cetera, not being affected, that's what we're talking about moving as cost up against revenue.

Okay, so it's either going to hit the gross margin or the operating margin. So that's... It'll

hit the gross margin in the sense that revenue would be decreased by the amount of

the

bona fide service fees. Yeah, so it's not ideal, but the net income and EBITDA would be the same. Okay.

Okay, I got

it.

And then in terms of the timing, do you have any idea?

We don't. I mean, I'd love to be able to tell you all. It's

something

I've been working on very hard, obviously. I think we're kind of at the back end of the SEC at this point, but we kind of put forth our final best argument for why we believe it's correct the way it currently is. We're just waiting to hear back from them. I can tell you that, you know, the NASDAQ application has been submitted. There's a couple... There were a couple of comments that we had that we cleared with them. And once this is... We're clear with the SEC one way or the other, then we should be good to go. I just don't have time before you. I apologize.

No, no issues. And then on the FDL letter itself, on the inspection letter and the clarifications that you have right now, because you are not really commercializing those products anymore. So is that relevant at all in the sense, are there any of these processes that you're doing right now for your other products that could be impacted by that same letter or, you know, since you're not doing any production, so that letter basically means nothing.

Yeah, okay. I'll take that one. You know, we just wanted to get it out and make sure everyone understood exactly what you just said, that when the FDA came and did the inspection, site inspection, we already were working towards discontinuing those products and their focus on those flowable, injectable-based products are separate and distinct than our existing product line that we're commercializing today. but we just wanted to make sure everyone understood that there really is no impact to the manufacturing operation of our facility based on this warning letter and that they were solely focused on those four injectable products and looking at it in the lens of a 351 or BLA or drug and biologic product versus how we manufacture products today, which is good tissue practices, and towards AATB accredited practices.

Great. So you ended the fourth quarter with 108 million dollars. So even though you exited the year at 300 and million for the year, so can we annualize the fourth quarter number for 2025? Or do you think how sustainable is that in general? And if there is expectation for growth, what sort of expectation, what's the push and pull on that annualization number basically?

Do you want to speak to that?

Yeah, sure, sure. I can speak to the revenue number. So just to be clear, the product is still selling, there's still volume, there's still a lot of demand. The question then becomes, are we, if we have to restate the revenue number, they'd probably be better to model on EBITDA versus revenue at this point only because change would be the revenue number would come down by the same amount that the sales and marketing or both of them should be coming down. So the economics are exactly the same, it's just the placement of the cost on the income statement. I don't know if that helps you or not, that's the way I kind of think about it. At the end of the day, it's a question of does the code get thrown?

That's not the question at all I'm asking. I'm just talking about the expectations for 2025. Let's assume everything is as is, like what you're just reporting. You reported like $104 million or so for the fourth quarter. Can we analyze it and expect somewhere north of $400 for 2025? Or what's the push and pull on that? Unfortunately,

we don't like to, I'm not in a position to give guidance around that. I mean, Jason, I don't know if you want to give any more color on it, but without giving any

more details. I think, RK, I think obviously having the LCD pushed to implementation Gen 1 of 2026, I think that sets us up to continue our progress through 2025. And we also mentioned that we are looking to have some data for our first DFU trial later this year as well. And like Mike said, currently we don't extend guidance around where we're going. But I think we're in a good position throughout 2025 to continue our progress.

Okay. Perfect. Thank you. Thank you very much for taking all my questions. Thanks, RK.

The next question is Eric Voss, Mission Vertical.

Hey, guys, can you hear me? We can, yep. Great. First of all, congratulations on a great year and a spectacular quarter. That was quite impressive. I'm wondering just to start off again, just to reiterate, can you verify your earnings and EBITDA don't change in any of these scenarios that you're contemplating changing the top line too?

Yeah, yeah, I can take that, Jake. I mean, I think there could potentially be a small change if we go net, sorry, we say gross, there could be a small change in the revenue with respect to, because currently we're essentially recognizing revenue we sell to venture medical. The question would become from the SEC would be, well, look, if the end user is your customer, should you essentially recognize revenue when that stuff is sold through? I can tell you that the turnover is very fast. That number, if there is a decrease in revenue, would not be material. So I think it could change slightly. We're not talking magnitudes of tons of money. We're just talking probably two weeks worth of inventory or two weeks worth of sales, potentially.

But what you said is earnings don't change. Earnings you guys report of your earnings?

Yeah, I mean earnings would change, but to the extent I don't think they materially change, I think the benefit is what we said. So basically they could change a little bit, but I don't think they're going to materially change.

Perfect. Okay. Can you help us with taxes then going forward? So that 94 cents was on zero taxes or even a benefit. What should the effective tax rate be, Mike?

Yeah, we're estimating around 24% tax rate at this point.

Okay. And the tax rate in this quarter was zero?

Essentially I think we had a benefit so it was like minus 2% or something like that because we had a little bit of an excess benefit that came through. So basically the NOLs are all gone. We essentially used them all up for the 24 earnings. So going forward, we're looking at ways to potentially reduce taxes obviously. It makes sure we're squared away there. So we actually just engage new tax advisors to help us in that regard.

Okay, perfect. Maybe going after the outlook for 25 in a little bit different way, Jason, can you kind of comment or give us a sense for how distribution looks right now versus mid-year? I know that you guys were kind of focused on the West Coast and we're moving to the East Coast. But if you could talk maybe about penetration across the nation, penetration with podiatrists and if and when you're in hospitals, we'd love to just get a sense for what any new think this distribution story is in right now, Jason?

Yeah, I mean, I think right now like you mentioned, Eric, we initiated with Venture Medical and we have a more higher concentration specifically on the West Coast and then also specifically in what we call the mobile wound care segment looking at long-term care, skilled nursing, physician office and smaller podiatry groups. And so now, as we kind of cascaded through into early 2024 and into early 2025, and frankly now with this LCD overhang kind of pushed back to the beginning of 2026, I think there's an opportunity just to really start looking at some larger organizations more on the East Coast, East Mississippi. We're in constant dialogue with the Venture team on how do we penetrate the geography of the Northeast and Southeast regions and then also how do we expand our access to some of the groups that are in their, I'll call it more hometown geography out on the West Coast and looking at some of the larger mobile wound care providers, etc. Mobile wound care is an expansive it's had a lot of expansion over the last few years. It's definitely the largest revenue generator in regards to the pie of where our end physicians are located. And then, you know, kind of looking at where our organization seeks new opportunities is definitely getting into the hospital segment and also the ambulatory surgery center segment and hospital outpatient segment and then last but not least into the VA and federal segment. So I think there's a lot of green field for us compared to our competitors where I think there's a lot of opportunity that we have to tap into areas where, yes, there would be -to-head competition, but at the same time, a lot of opportunity for us to really articulate our story about our bioretained products and the product differentiation there.

Yeah, that's fantastic. That's my final question. Thanks a lot, guys. Congratulations again. Thanks, sir. Thanks.

And just a reminder, everyone, that is star one. If you have a question, we'll go to Mitchell Sacks, Grand Slam.

Hey, guys, two questions. One is if we look at your revenue where you go with kind of the worst case scenario with the SEC saying the costs are going to be removed from revenue, what does your gross margin look like then on a percentage basis?

Yeah, thanks for the question. Let me just look at something here really quick. I had something prepared for that. I think the easiest way to do this would be if you think about the revenue roughly 72 to 78% of that's going to go into the gross margin line. Let me see if I have something here on that. I don't think I have it off the top of my head, but I can definitely, if you wanted to connect with me offline, I can definitely think about that. Hang on one second. Sure.

Yeah, maybe the easier way to answer your question, Mitchell, is to look at like Mike just said, we would just be moving up the bona fide services SG&A and netting it against top line revenue in a worst case scenario and then ultimately calculating gross margin from there.

Yeah, I'm sorry. I don't have the number off the top of my head, but we can definitely, to Jason's point, you just simply take the bona fide service fee out of the op-ax and jam it into as an offset to revenue and then rerun it.

Okay. And then my second question comes with respect to the revenue that was generated in the fourth quarter. And I know you're not giving guidance. When I think about that just sort of more simplistically, is there any seasonality or has anything that occurred in the quarter that skewed revenues to that quarter that would not be reappearing in future quarters? I don't know how to think about it, like one time stocking kind of stuff, or is that sort of a normal course of business for the fourth quarter? And is there any seasonality?

Yeah, I mean, we get this question quite a bit actually. Sadly, any sort of chronic wound doesn't have a season to it. I think we continue to push, the venture teams continue to push on getting product commercialized. I think maybe some uncertainty around the market in regards to where things go. If you guys don't know, the original LCD implementation date was February. And so does that push providers to look at the use of skin substitutes prior to that date and make sure patients are getting treated with the appropriate products before they come off the ability to have them? May or may not address why was there broader adoption of the product. But we do continue to kind of grow our customer base. And kind of to my answer back to Eric, I think there's areas in which we didn't have tapped into at the beginning or middle of last year where we started to get access into later than half of the year, more geographically on the East Coast versus the West Coast.

Okay, so I'm curious if you guys have ever heard of any kind of stocking or stuff just ordered as needed? In other words, how does that flow?

Yeah, kind of as Mike mentioned earlier, a lot of the material is flowed through. We don't have a situation where venture takes possession and holds inventory for long periods of time. So a lot of the material is sold through at a very high price point. And then we have to pay through to the end customer, which would be the physician.

Okay, and again, so in that situation then, if we think about sales, what occurred in the fourth quarter, hopefully you would be able to build on that in 2025. That would be your goal. That is correct. That's good for me. Thank you. Thank you.

And we'll move to Dick Heibner, GVC.

Jason, congratulations on a really good quarter in year. I have a question as it relates to the percent of revenues that stem from Medicare currently. Do you have information on that?

Yeah, I mean, a majority of our revenue is predicated on Medicare reimbursement at this time.

Okay. And Jason, I've read that a couple of the approved items for treatment for lower extremity wounds currently are under $200. What is the cost per patient for treatment utilizing your products?

Most of the prices that can be found in the marketplace are subject to ASP price reporting. And so Vendahe AC as well as EmuRap2 both have published ASPs that you can go on CMS's website and find them.

Okay. I find it interesting. You know, my mother four years ago, Medicare picked up the expense for 30 bariatric chamber treatments to heal the wound. It cost them about $75,000. Where the infections were antibiotic resistant and could not and it was being healed. And I find it amazing that they wouldn't look to expend several thousand dollars versus six. And that bariatric chamber was ran 18 hours a day and was fully booked for nine months. It was a pretty amazing process to go through. But Medicare picked up all of the expense of that. It just seems to me, given cost efficient alternatives, that they wouldn't be willing to take more extreme measures than a couple hundred dollars expenditures that seem to be working currently in the market or not working that well in the market.

Yeah, I mean, I think it's an interesting, you know, point. Dr. Tudelbueck actually just drafted and you can look at online at Journal Wound Care. They did an analysis of actually what is the cost, specifically in the skin substitute space, the cost to Medicare and the cost of the Medicare trust fund for the use of these products. And it was actually a fascinating discovery that even moving these products up to where they are today from an ASP price reporting perspective actually saved the Medicare trust fund dollars. Why? Because ultimately patients aren't having amputations. Patients aren't getting sepsis, which will drive significant amount of cost to the system

if

these patients ultimately get, you know, brought back into the hospital system and frankly those wounds and amputations have to be treated. There is a really bad statistic around the mortality rate of patients that ultimately end up losing a limb and it's very high in a very short period of time. And hopefully our goal is with utilizing our bioretain technology that we have the ability to actually save those patients, save their limbs, and frankly hopefully save their lives.

Well, I can't believe that the government wouldn't consider it because I don't think they give full consideration leaving, but it seems like to me that we might give consideration to the fact that hey, it does increase the mortality and therefore remove all those patients from being on Medicare to Medicaid. And I think that we should shift that to the state and Medicaid cost because 90% of the people there live on average 15 months of their life there and hey, you can shift the cost from Medicaid if we continue with treatments that result in amputations and higher mortality rates. Anyway, that's a political commentary we need to get into. But thanks for your time. No problem, thanks.

And everyone, that was our final question for today. I'd like to hand the call back to Mr. Jason Matuszewski for any additional or closing remarks.

Alright, well first and foremost I want to thank everybody for joining the call. As we close out this call I want to take a moment to reflect on how far we've come and where we're going. 2024 was a transformative year for BioSTEM, one defined by record financial performance, commercial execution, clinical progress, and strategic clarity. We launched new products, expanded our national footprint, advanced our trials, and brought forward a policy vision for the future of wound care. What excites me most about 2025 is the momentum we're carrying into it.

With a clear

strategy, a powerful platform in bioretain, and a passionate team committed to improving the lives of patients. We're focused on execution, advancing our clinical data, expanding payer access, launching new initiatives, and completing our uplifting to NASDAQ. But of all, we remain committed to delivering value to our patients, our providers, and to you, our shareholders. Thank you for your continued trust and support and we look forward to keeping you updated throughout the rest of this year. Thank you all.

And once again, ladies and gentlemen, that does conclude our conference. We would like to thank you all for your participation today. You may now disconnect.