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biote (BTMD) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This report contains forward-looking statements about Biote Corp.'s future results and strategy, subject to various material risks - This Quarterly Report contains forward-looking statements regarding biote Corp.'s future results, financial position, industry trends, business strategy, and market growth, based on current information, expectations, forecasts, and assumptions78 - Factors that could cause actual results to differ materially include the success of dietary supplements, reliance on third parties for hormone manufacturing, regulatory and competitive conditions, ability to grow the business, intellectual property protection, heavy regulatory oversight, changes in laws, and economic factors9101112 PART I. FINANCIAL INFORMATION This section presents unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, stockholders' equity, and cash flows, along with detailed notes explaining the company's business, accounting policies, acquisitions, revenue recognition, and other financial details for the periods ended June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets This section details the company's financial position, including assets, liabilities, and stockholders' deficit Table: Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $19,601 | $39,342 | | Total current assets | $49,504 | $68,127 | | Total assets | $104,798 | $122,370 | | Total current liabilities | $50,537 | $51,514 | | Total liabilities | $183,638 | $224,570 | | Total stockholders' deficit | $(78,840) | $(102,200) | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) This section presents the company's financial performance, including revenue, income, and EPS for specified periods Table: Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total revenue | $48,863 | $49,169 | $97,855 | $95,973 | | Income from operations | $10,765 | $6,233 | $20,455 | $16,660 | | Net income (loss) | $3,925 | $(10,368) | $19,764 | $(16,094) | | Net income (loss) attributable to biote Corp. | $3,185 | $(7,087) | $16,903 | $(11,248) | | Basic EPS | $0.10 | $(0.21) | $0.54 | $(0.33) | | Diluted EPS | $0.10 | $(0.21) | $0.46 | $(0.33) | Condensed Consolidated Statements of Stockholders' Equity (Deficit) This section outlines changes in stockholders' equity, including accumulated deficit and share-based compensation Table: Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands) | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | | :-------------------------------- | :------------------------------- | :----------------------------- | | Accumulated deficit | $(100,297) | $(79,478) | | Total stockholders' deficit | $(102,200) | $(78,840) | | Net income (loss) | N/A | $13,718 (attributable to biote Corp.) | | Share-based compensation | N/A | $2,127 (attributable to biote Corp.) | Table: Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands) | Metric | December 31, 2023 (in thousands) | June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------- | :----------------------------- | | Accumulated deficit | $(29,391) | $(137,532) | | Total stockholders' deficit | $(36,546) | $(141,460) | | Net loss | N/A | $(7,087) (attributable to biote Corp.) | | Share-based compensation | N/A | $2,841 (attributable to biote Corp.) | Condensed Consolidated Statements of Cash Flows This section details cash flows from operating, investing, and financing activities for the specified periods Table: Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | $13,553 | $17,319 | | Net cash used in investing activities | $(3,810) | $(15,513) | | Net cash used in financing activities | $(29,489) | $(64,381) | | Net decrease in cash and cash equivalents | $(19,741) | $(62,583) | | Cash and cash equivalents at end of period | $19,601 | $26,419 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of the company's financial statements and accounting policies 1. Description of Business and Basis of Presentation Biote Corp. trains medical practitioners in bioidentical hormone replacement pellet therapy and operates under an Up-C structure. The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim reporting, and prior period statements for June 30, 2024, were revised to correct an overstatement of net loss attributable to noncontrolling interest, which was deemed immaterial - Biote Corp. was founded in 2012 and trains physicians and nurse practitioners in therapeutic wellness and hormone optimization using bioidentical hormone replacement pellet therapy26 - The Company revised its prior period condensed consolidated financial statements for the second quarter of fiscal 2024 to correct an overstatement of net loss attributable to noncontrolling interest by $0.9 million for the three months and $3.0 million for the six months ended June 30, 20243132 2. Summary of Significant Accounting Policies This section details significant accounting policies, including the composition of other current assets, the accounting for share repurchase liabilities, contributions to the 401(k) Plan, and concentrations of credit risk and inventory purchases. It also notes the adoption of ASU 2023-07 with no material impact and the evaluation of ASU 2024-03 and ASU 2023-09 Table: Other Current Assets (in thousands) | Other Current Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Prepaid expenses | $4,487 | $3,322 | | Advances | $4,028 | $2,805 | | Income tax receivable | $97 | $71 | | Other assets | $84 | $111 | | Total other current assets | $8,696 | $6,309 | - During Q2 2025, the Company repurchased approximately 5.5 million shares of Class V voting stock for $25.1 million, reducing its share repurchase liability42 - The Company has significant concentrations in inventory purchases, with three vendors accounting for 78.8% and four vendors for 91.9% of purchases for the three and six months ended June 30, 2025, respectively, but does not believe the loss of any single vendor would have a material adverse impact47 - The Company adopted ASU 2023-07 (Segment Reporting) with no material impact and is evaluating ASU 2024-03 (Expense Disaggregation) and ASU 2023-09 (Income Tax Disclosures) for future impact495051 3. Acquisitions In 2024, Biote Corp. completed three acquisitions: F.H. Investments (Asteria Health) for $9.0 million (cash and earnout), Simpatra, LLC for $1.5 million cash and 389,105 Class A common shares plus an earnout, and BioSana ID LLC for $0.7 million cash plus a potential earnout. These acquisitions resulted in the recognition of goodwill and various intangible assets - On March 18, 2024, Biote acquired F.H. Investments Inc. (Asteria Health), a 503B manufacturer of compounded bioidentical hormones, for $9.0 million ($8.5 million cash + $0.5 million cash earnout)53 Table: Asteria Health Acquisition (in thousands) | Asteria Health Acquisition (in thousands) | Final Purchase Price Allocation | | :---------------------------------------- | :------------------------------ | | Accounts receivable | $27 | | Inventory | $1,722 | | Customer relationships | $1,340 | | Goodwill | $5,833 | - On January 2, 2024, Biote acquired intellectual property from Simpatra, LLC for $1.5 million cash and 389,105 shares of Class A common stock, plus a future earnout of 194,553 shares contingent on financial targets60 - On January 29, 2024, Biote acquired assets from BioSana ID LLC for $0.7 million cash and a potential earnout of up to $0.1 million, recording a $0.8 million customer relationship intangible asset63 4. Revenue Recognition Revenue is primarily generated from product sales (pellet procedures, dietary supplements, disposable trocars) and service revenue (training, contract-term services). For the three months ended June 30, 2025, total revenue was $48.9 million, with the majority from the United States. Contract liabilities include unsatisfied obligations for training, contract-term services, and pellet procedures Table: Revenue by Stream (in thousands) | Revenue Stream (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Pellet procedures | $35,205 | $38,418 | $71,247 | $75,807 | | Dietary supplements | $10,749 | $8,241 | $20,019 | $15,630 | | Product revenue | $47,657 | $48,111 | $94,682 | $94,146 | | Service revenue | $1,206 | $1,058 | $3,173 | $1,827 | | Total revenue | $48,863 | $49,169 | $97,855 | $95,973 | Table: Revenue by Geographic Region (in thousands) | Revenue by Geographic Region (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States (Product) | $47,405 | $47,568 | $94,184 | $93,224 | | All other (Product) | $252 | $543 | $498 | $922 | | United States (Service) | $1,206 | $1,058 | $3,173 | $1,827 | | Total revenue | $48,863 | $49,169 | $97,855 | $95,973 | Table: Unsatisfied Obligations (in thousands) | Unsatisfied Obligations (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------- | :------------ | :---------------- | | Unsatisfied training obligations – Current | $101 | $16 | | Total allocated to unsatisfied contract-term services | $2,536 | $2,758 | | Total allocated to unsatisfied pellet procedures | $1,817 | $1,740 | | Total deferred revenue – Current | $3,052 | $2,961 | | Total deferred revenue – Long-term | $1,402 | $1,553 | 5. Inventory, Net The company's inventory primarily consists of pellets and dietary supplements, with a total net inventory of $12.1 million as of June 30, 2025. Allowances for obsolete and expired inventory are maintained for both categories Table: Inventory Component (in thousands) | Inventory Component (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Pellet inventory, net | $5,629 | $6,824 | | Dietary supplement inventory, net | $6,503 | $8,021 | | Inventory, net | $12,132 | $14,845 | 6. Property and Equipment, Net Property and equipment, net, totaled $9.9 million as of June 30, 2025, primarily comprising trocars, leasehold improvements, and construction in process. Depreciation expense for the three and six months ended June 30, 2025, was $0.2 million and $0.4 million, respectively, for SG&A, and $0.06 million and $0.07 million for cost of products Table: Property and Equipment (in thousands) | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Trocars | $4,644 | $4,644 | | Leasehold improvements | $8,809 | $3,251 | | Construction in process | $1,527 | $4,226 | | Property and equipment, net | $9,928 | $6,973 | - Depreciation expense in SG&A was $0.2 million for both Q2 2025 and Q2 2024, and $0.4 million (2025) vs. $0.3 million (2024) for the six-month periods. Depreciation in cost of products was $0.06 million (Q2 2025) vs. $0.01 million (Q2 2024)68 7. Capitalized Software, Net Capitalized software, net, amounted to $3.6 million as of June 30, 2025, primarily consisting of website costs. Total amortization expense for capitalized software was $0.3 million for the three months and $0.7 million for the six months ended June 30, 2025 Table: Capitalized Software (in thousands) | Capitalized Software (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Website costs | $10,130 | $9,812 | | Capitalized software, net | $3,582 | $3,877 | - Total amortization expense for capitalized software was $0.3 million (Q2 2025) vs. $0.4 million (Q2 2024) for the three-month periods, and $0.7 million (2025) vs. $0.8 million (2024) for the six-month periods70 8. Intangible Assets, Net Net intangible assets totaled $4.9 million as of June 30, 2025, including customer relationships, developed technology, non-compete agreements, and trade names. Total amortization expense for definite-lived intangible assets was $0.3 million for the three months and $0.6 million for the six months ended June 30, 2025 Table: Intangible Assets (in thousands) | Intangible Assets (in thousands) | June 30, 2025 Net Carrying Value | December 31, 2024 Net Carrying Value | | :------------------------------- | :------------------------------- | :----------------------------------- | | Customer relationships | $1,854 | $2,005 | | Developed technology | $2,804 | $3,205 | | Non-compete agreement | $135 | $172 | | Trade names | $90 | $118 | | Total intangible assets | $4,883 | $5,500 | - Total amortization expense for definite-lived intangible assets was $0.3 million for both Q2 2025 and Q2 2024, and $0.6 million (2025) vs. $0.5 million (2024) for the six-month periods71 Table: Estimated Amortization Expense (in thousands) | Estimated Amortization Expense (in thousands) | Amount | | :-------------------------------------------- | :----- | | 2025 (remaining six months) | $617 | | 2026 | $1,234 | | 2027 | $1,128 | | 2028 | $1,102 | | 2029 | $164 | | Thereafter | $638 | | Total | $4,883 | 9. Accrued Expenses Accrued expenses totaled $9.0 million as of June 30, 2025, primarily consisting of employee-related costs, professional fees, and a legal settlement accrual Table: Accrued Expenses (in thousands) | Accrued Expenses (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------ | :------------ | :---------------- | | Accrued professional fees | $1,238 | $638 | | Accrued employee-related costs | $4,198 | $5,645 | | Legal settlement accrual | $1,500 | $3,500 | | Other | $2,047 | $1,510 | | Accrued expenses | $8,983 | $11,293 | 10. Long-Term Debt The company has a $125.0 million Term Loan and a $50.0 million Revolving Credit Facility with Truist Bank, secured by company assets. As of June 30, 2025, the Term Loan balance was $106.3 million, with $50.0 million available under the Revolving Loans. The company was in compliance with all financial covenants - The Company has a $125.0 million Term Loan and a $50.0 million Revolving Loans facility with Truist Bank, maturing on May 26, 20277374 - As of June 30, 2025, the interest rate on the Term Loan was approximately 7.18%, and the Company had $50.0 million available under its Revolving Loans7475 - The Company was in compliance with all required financial covenants (maximum total net leverage ratio and minimum fixed charge coverage ratio) as of June 30, 202576 Table: Long-Term Debt Maturities (in thousands) | Long-Term Debt Maturities (in thousands) | Amount | | :--------------------------------------- | :----- | | 2025 (remaining six months) | $3,125 | | 2026 | $6,250 | | 2027 | $96,875 | | Total | $106,250 | 11. Earnout Liability Earnout liabilities are classified as a liability and remeasured each reporting period, tied to share price targets ($12.50, $15.00, $17.50 VWAP) or a change of control by May 26, 2027. Additional earnout liabilities were recorded in Q1 2024 due to acquisitions - Earnout securities vest upon achieving specific volume-weighted average share price (VWAP) targets ($12.50, $15.00, $17.50) or a change of control by May 26, 20277987 - The earnout securities are classified as a liability and remeasured at fair value each reporting period, with changes recorded in the statements of operations80 - Additional earnout liabilities were recorded in connection with acquisitions completed during the first quarter of 202481 12. Fair Value Measurements The company's financial liabilities measured at fair value on a recurring basis consist of earnout liabilities, which are classified as Level 3 due to significant unobservable inputs. As of June 30, 2025, the total earnout liability was $8.3 million, a decrease from $17.2 million at December 31, 2024, primarily due to a gain from change in fair value Table: Liabilities (in thousands) | Liabilities (in thousands) | June 30, 2025 (Level 3) | December 31, 2024 (Level 3) | | :------------------------- | :---------------------- | :-------------------------- | | Earnout liability | $8,279 | $17,235 | - Earnout liabilities are valued using Monte Carlo simulations, projecting future stock price and/or revenue, with significant unobservable inputs classified in Level 3 of the fair value hierarchy85 Table: Significant Inputs for Earnout Liability (Business Combination) | Significant Inputs for Earnout Liability (Business Combination) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------------------ | :------------ | :---------------- | | Stock price | $4.02 | $6.18 | | Risk-free rate | 3.7% | 4.2% | | Volatility | 71.6% | 75.0% | | Term (in years) | 1.9 | 2.4 | Table: Changes in Fair Value of Level 3 Financial Instruments (in thousands) | Changes in Fair Value of Level 3 Financial Instruments (in thousands) | Earnout Liability | | :---------------------------------------------------- | :---------------- | | Fair value as of December 31, 2024 | $17,235 | | Settlement | $(75) | | Gain on asset acquisition | $(25) | | Gain from change in fair value | $(8,856) | | Fair value as of June 30, 2025 | $8,279 | 13. Noncontrolling Interest Biote Corp. operates under an Up-C structure, with its business conducted by Holdings. As of June 30, 2025, Biote's ownership of Holdings was approximately 87.9%. Non-controlling interest is presented in permanent equity because Biote controls the redemption of Holdings units for cash or Class A common stock - Biote Corp. operates in an Up-C structure, with its only material direct asset being equity interests in Holdings, which conducts the company's business89 - As of June 30, 2025, Biote's ownership of Holdings was approximately 87.9%89 - Non-controlling interest is presented in permanent equity because Biote has the sole control over whether Holdings units are redeemed for cash or Class A common stock90 14. Share-Based Compensation The company grants restricted stock units (RSUs), stock options, and offers an Employee Stock Purchase Plan (ESPP). For the six months ended June 30, 2025, 266,849 RSUs and 4,228,627 stock options were granted. Total share-based compensation expense was $0.3 million for RSUs and $3.9 million for stock options for the six months ended June 30, 2025 Table: RSU Activity | RSU Activity | Shares (Six Months Ended June 30, 2025) | Weighted-Average Grant-Date Fair Value | | :------------- | :-------------------------------------- | :------------------------------------- | | Granted | 266,849 | $3.72 | | Vested | (24,039) | $5.57 | | Outstanding | 282,758 | $3.84 | - Unrecognized share-based compensation expense for RSUs was $0.5 million as of June 30, 2025, to be recognized over a weighted-average remaining vesting period of 3.75 years91 Table: Stock Option Activity | Stock Option Activity | Shares (Six Months Ended June 30, 2025) | Weighted-Average Exercise Price | | :-------------------- | :-------------------------------------- | :------------------------------ | | Granted | 4,228,627 | $3.97 | | Exercised | (64,040) | $3.53 | | Outstanding | 13,146,085 | $4.68 | | Exercisable | 4,893,930 | $4.75 | - Unrecognized share-based compensation expense for stock options was $21.2 million as of June 30, 2025, to be recognized over a weighted-average remaining vesting period of 2.72 years92 15. Leases The company has operating leases for office space in Irving, TX, and a manufacturing facility in Birmingham, AL. Operating lease right-of-use assets totaled $3.0 million and total lease liabilities were $3.2 million as of June 30, 2025. Fixed lease expense for the six months ended June 30, 2025, was $0.4 million - The Company has operating leases for office space in Irving, TX (extended through November 30, 2028) and a manufacturing facility in Birmingham, AL (60-month agreement from September 2024)9697 Table: Lease Metrics (in thousands) | Lease Metrics (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $2,978 | $3,246 | | Total lease liabilities | $3,158 | $3,413 | | Fixed lease expense (Six Months) | $385 | $297 | Table: Future Lease Payments (in thousands) | Future Lease Payments (in thousands) | Amount | | :----------------------------------- | :----- | | 2025 (remaining six months) | $375 | | 2026 | $774 | | 2027 | $801 | | 2028 | $701 | | 2029 | $185 | | Thereafter | $1,021 | | Total lease payments | $3,857 | 16. Income Taxes Biote Corp. is subject to U.S. federal and state taxes, while Holdings is generally treated as a partnership. The company has a Tax Receivable Agreement (TRA) with non-controlling interest holders. Income tax expense for the three and six months ended June 30, 2025, was $2.2 million and $3.8 million, respectively. The company is evaluating the impact of the recently enacted One Big Beautiful Bill Act on its deferred tax assets and effective tax rate - Biote Corp. is subject to U.S. federal and state taxes, while Holdings is generally treated as a partnership for tax purposes99 - The Tax Receivable Agreement (TRA) provides payments to non-controlling interest holders for approximately 85% of tax benefits realized from increases in tax basis100 Table: Income Tax Expense (in thousands) | Income Tax Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax expense | $2,150 | $73 | $3,766 | $2,475 | - The Company is evaluating the potential implications of the recently enacted One Big Beautiful Bill Act on its deferred tax assets, valuation allowance assessments, and effective tax rate104 17. Capital Stock On January 24, 2024, the Board approved a share repurchase program authorizing up to $20.0 million of Class A common stock repurchases. As of June 30, 2025, $14.4 million remained available under this program - The Board of Directors approved a share repurchase program on January 24, 2024, authorizing up to $20.0 million of Class A common stock repurchases105 - As of June 30, 2025, the remaining balance of the repurchase program was $14.4 million106 18. Net Income (Loss) Per Common Share Basic and diluted net income per common share for the three months ended June 30, 2025, was $0.10, compared to a loss of $(0.21) for the same period in 2024. For the six months ended June 30, 2025, basic EPS was $0.54 and diluted EPS was $0.46, a significant improvement from a loss of $(0.33) in 2024 Table: EPS Metric | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.10 | $(0.21) | $0.54 | $(0.33) | | Diluted EPS | $0.10 | $(0.21) | $0.46 | $(0.33) | Table: Weighted Average Shares Outstanding | Weighted Average Shares Outstanding | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic | 31,625,485 | 33,072,156 | 31,556,017 | 34,185,578 | | Diluted | 31,743,162 | 33,072,156 | 36,959,274 | 34,185,578 | Table: Antidilutive Securities Excluded | Antidilutive Securities Excluded | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock Options | 13,146,085 | 11,615,972 | 10,815,887 | 11,615,972 | | Class V Voting Stock | 5,221,653 | 5,221,653 | — | 5,221,653 | | Member Earnout Units | 2,028,226 | 2,028,226 | 2,028,226 | 2,028,226 | 19. Commitments and Contingencies The company is involved in several legal proceedings, including the Right Value Litigation (settled for $5.0 million), Yosaki and Mioko Trusts litigation (dismissed, appealed), Cindy Latch litigation (temporary injunction reversed), and Gary S. Donovitz / NIL Litigation (ongoing, with a Delaware injunction precluding Texas prosecution). Additionally, the company has inventory purchase commitments totaling $12.1 million, with $5.8 million due by December 31, 2025 - The Right Value Litigation was settled on February 26, 2025, with BioTE Medical agreeing to pay $5.0 million, of which $3.5 million was paid in February 2025, and the remaining $1.5 million is accrued112 - The Yosaki and Mioko Trusts litigation was dismissed on March 15, 2025, but the Plaintiffs appealed to the Delaware Supreme Court on April 15, 2025114 - In the Cindy Latch litigation, the temporary injunction against BioTE was reversed by the Dallas 5th District Court of Appeals on April 15, 2025116218 - The Gary S. Donovitz / NIL Litigation is ongoing, with a Delaware Chancery Court temporary restraining order precluding Donovitz from prosecuting the Texas litigation, which was subsequently removed to the U.S. District Court for the District of Delaware117118120 - As of June 30, 2025, the Company had inventory purchase commitments of $5.8 million expected by December 31, 2025, and an additional $6.3 million by December 31, 2026122 20. Related-Party Transactions Related-party transactions include a consulting agreement with former CEO Teresa S. Weber ($0.1 million paid in H1 2025) and inventory purchases from a vendor in which the company's founder holds a minority interest ($0.08 million in H1 2025). The founder advisory agreement with Dr. Gary S. Donovitz was terminated in April 2024 - The Company entered into a consulting agreement with Ms. Teresa S. Weber (former CEO) on January 30, 2025, paying her $0.1 million during the six months ended June 30, 2025125 - The Company purchased $0.08 million in dietary supplements from a vendor in which its founder holds a minority interest during the six months ended June 30, 2025126 - The founder advisory agreement with Dr. Gary S. Donovitz was terminated effective April 23, 2024127 21. Segments The company operates as a single operating segment, with the Chief Executive Officer reviewing consolidated financial information to allocate resources and assess performance. Substantially all revenue and long-lived tangible assets are located in the U.S - The Company operates as one operating segment, with the Chief Executive Officer serving as the Chief Operating Decision Maker (CODM) and reviewing financial information on a consolidated basis129 Table: Selected Financial Information (in thousands) | Selected Financial Information (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $48,863 | $49,169 | $97,855 | $95,973 | | Cost of revenue | $13,875 | $15,361 | $26,485 | $28,813 | | Net income (loss) | $3,925 | $(10,368) | $19,764 | $(16,094) | - Substantially all of the Company's revenue and long-lived tangible assets are located within the United States131132 22. Restructuring On May 1, 2025, the Board approved an organizational restructuring plan, reducing the workforce by approximately 15 employees (7.2%). This resulted in a one-time expense of $0.6 million for employee severance and legal fees, with $0.4 million paid in Q2 2025 and the remainder accrued - On May 1, 2025, the Board approved a restructuring plan to reduce the workforce by approximately 15 employee roles (7.2% of workforce), primarily in commercial organization and corporate overhead133 - A one-time expense of $0.6 million was recorded for employee severance payments and related legal fees, with $0.4 million paid in Q2 2025 and $0.2 million accrued as of June 30, 2025134 23. Subsequent Events The company evaluated subsequent events from June 30, 2025, through August 8, 2025, and determined no events required adjustment or disclosure in the unaudited condensed consolidated financial statements - Subsequent events were evaluated from June 30, 2025, through August 8, 2025, with no events requiring adjustment or disclosure135 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Biote Corp.'s financial condition and results of operations, including an overview of its business model, go-to-market strategy, and detailed analysis of financial performance for the three and six months ended June 30, 2025 and 2024. It also covers non-GAAP measures, liquidity, capital resources, and critical accounting policies Overview Biote Corp. specializes in hormone optimization therapy, offering an end-to-end platform for practitioners and selling dietary supplements. The company is focused on vertical integration, as evidenced by the acquisition of Asteria Health and the extension of the AnazaoHealth Pharmacy Services Agreement. Bret Christensen was appointed CEO on February 1, 2025. Global economic trends and recent tax developments are being monitored for potential impacts - Biote trains physicians and nurse practitioners in hormone optimization using bioidentical hormone replacement pellet therapy, offering a comprehensive 'Biote Method' platform137 - The go-to-market strategy focuses on increasing Biote-certified practitioners, growing their practices through support and marketing, and increasing sales of Biote-branded dietary supplements via e-commerce (including Amazon)139 - To strengthen its supply chain, Biote acquired Asteria Health in March 2024 and extended its Pharmacy Services Agreement with AnazaoHealth through December 31, 2027141 Table: Key Financial Results (in thousands) | Key Financial Results (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $48,863 | $49,169 | $97,855 | $95,973 | | Net income (loss) | $3,925 | $(10,368) | $19,764 | $(16,094) | | Adjusted EBITDA | $15,174 | $12,742 | $28,926 | $26,900 | - Bret Christensen was appointed Chief Executive Officer on February 1, 2025, succeeding Teresa S. Weber, who transitioned to a strategic advisor role145 Components of Results of Operations Biote generates revenue from fees associated with the Biote Method and sales of Biote-branded dietary supplements, primarily in the U.S. Product revenue is recognized upon pellet implantation or product shipment, while service revenue is recognized over time for training and contract-term services. Key expense categories include cost of revenue, selling, general and administrative (SG&A), interest expense, changes in fair value of earnout liabilities, and income tax - Revenue is generated from fees for the Biote Method (initial training, bioidentical hormone pellets, software tools, marketing support) and sales of Biote-branded dietary supplements148 - Product revenue is recognized when the Biote-partnered clinic obtains ownership of the pellet (at implantation) or when products (kits, supplements) are shipped. Service revenue for training and contract-term services is recognized over time151154 - Revenue fluctuates due to sales volumes, patient mix (male/female), product mix, competition, net new clinics, procedure numbers, medical industry acceptance, business days, weather, regulations, and economic cycles153 - Cost of revenue includes pass-through costs of pellets, kits, supplements, and shipping. SG&A covers software, sales force, corporate functions, rent, depreciation, share-based compensation, and marketing156157 Results of Operations This section provides a detailed analysis of the company's financial performance for the specified periods Three Months Ended June 30, 2025 and 2024 For the three months ended June 30, 2025, total revenue decreased by 0.6% to $48.9 million, primarily due to a $3.2 million decrease in pellet procedures, partially offset by a $2.5 million increase in dietary supplements. Cost of revenue decreased by 9.7% due to cost savings from Asteria Health integration. SG&A decreased by 12.2% due to lower employee-related expenses, consulting, and legal fees, partially offset by a $0.6 million restructuring charge and increased marketing. Net income was $3.9 million, a significant improvement from a $10.4 million net loss in the prior year Table: Financial Performance (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total revenue | $48,863 | $49,169 | $(306) | (0.6%) | | Cost of revenue | $13,875 | $15,361 | $(1,486) | (9.7%) | | SG&A | $24,223 | $27,575 | $(3,352) | (12.2%) | | Income from operations | $10,765 | $6,233 | $4,532 | 72.7% | | Net income (loss) | $3,925 | $(10,368) | $14,293 | N/A | - Revenue from pellet procedures decreased by $3.2 million, while Biote-branded dietary supplements revenue increased by $2.5 million, driven by a shift to the Amazon e-commerce site164 - Cost of pellet procedures decreased by 21.0%, reflecting cost savings from the vertical integration of Asteria Health165 - SG&A decrease was due to lower employee-related expenses ($0.9M), consulting expenses ($0.8M), and legal fees ($0.5M), partially offset by a $0.6 million restructuring charge and $0.4 million increase in marketing expenses166167 - Interest expense, net, increased by $0.3 million, primarily due to a $0.4 million increase in accreted interest on share repurchase liability and a $0.2 million decrease in interest income168 Six Months Ended June 30, 2025 and 2024 For the six months ended June 30, 2025, total revenue increased by 2.0% to $97.9 million, driven by a $4.4 million increase in dietary supplements and a $1.3 million increase in service revenue, partially offset by a $4.6 million decrease in pellet procedures. Cost of revenue decreased by 8.1% due to Asteria Health integration savings. SG&A increased by 0.8% due to higher marketing and audit/tax fees, partially offset by lower consulting and employee expenses. Net income was $19.8 million, a significant improvement from a $16.1 million net loss in the prior year Table: Financial Performance (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total revenue | $97,855 | $95,973 | $1,882 | 2.0% | | Cost of revenue | $26,485 | $28,813 | $(2,328) | (8.1%) | | SG&A | $50,915 | $50,500 | $415 | 0.8% | | Income from operations | $20,455 | $16,660 | $3,795 | 22.8% | | Net income (loss) | $19,764 | $(16,094) | $35,858 | N/A | - Revenue from Biote-branded dietary supplements increased by $4.4 million due to a shift to the Amazon e-commerce site, and service revenue increased by $1.3 million from technology fees. Pellet procedures revenue decreased by $4.6 million172173 - Cost of pellet procedures decreased by 22.6%, reflecting continued cost savings from Asteria Health vertical integration174 - SG&A increased due to a $1.1 million rise in marketing expenses and a $0.5 million increase in audit and tax services, partially offset by a $0.7 million decrease in consulting expenses and a $0.3 million decrease in employee-related expenses175 - Interest expense, net, increased by $1.5 million, primarily due to a $1.5 million increase in accreted interest on share repurchase liability and a $0.7 million decrease in interest income176 - The company recorded a gain from change in fair value of earnout liabilities of $8.9 million in 2025, compared to a loss of $26.0 million in 2024, primarily due to a 35.6% decrease in Class A common stock price in 2025 versus a 51.2% increase in 2024177 Non-GAAP Measures This section presents Adjusted EBITDA as a non-GAAP performance measure used by management to evaluate operational performance. For the six months ended June 30, 2025, Adjusted EBITDA was $28.9 million, up from $26.9 million in the prior year. A reconciliation to net income (loss) is provided, along with a discussion of the limitations of non-GAAP financial information - Adjusted EBITDA is a non-GAAP measure used by management to evaluate operational performance, excluding interest expense, depreciation and amortization, income taxes, and certain non-recurring expenses180181 Table: Adjusted EBITDA Reconciliation (in thousands) | Adjusted EBITDA Reconciliation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $3,925 | $(10,368) | $19,764 | $(16,094) | | Interest expense, net | $2,852 | $2,577 | $5,757 | $4,237 | | Income tax expense | $2,150 | $73 | $3,766 | $2,475 | | Depreciation and amortization | $910 | $876 | $1,767 | $1,626 | | Share-based compensation expense | $2,186 | $2,841 | $4,313 | $4,604 | | (Gain) loss from change in fair value of earnout liabilities | $1,832 | $13,949 | $(8,856) | $26,038 | | Adjusted EBITDA | $15,174 | $12,742 | $28,926 | $26,900 | - Limitations of Adjusted EBITDA include not reflecting cash capital expenditure requirements, changes in working capital needs, or tax payments184 Liquidity and Capital Resources The company's liquidity is primarily from cash and cash equivalents ($19.6 million as of June 30, 2025), cash from operations, and $50.0 million available under Revolving Loans. Net cash provided by operating activities decreased by $3.8 million to $13.6 million for the six months ended June 30, 2025, mainly due to increased cash used for other assets, accounts payable, and a legal settlement payment. Net cash used in investing activities decreased by $11.7 million, and net cash used in financing activities decreased by $34.9 million, primarily due to lower payments on repurchase liabilities - Liquidity is derived from cash and cash equivalents ($19.6 million as of June 30, 2025), cash generated from operations, and $50.0 million available under Revolving Loans186 - Net cash provided by operating activities decreased by $3.8 million to $13.6 million for the six months ended June 30, 2025, primarily due to a $3.2 million increase in cash used for other assets, a $3.4 million increase in cash used for accounts payable, and a $3.5 million legal settlement payment191 - Net cash used in investing activities decreased by $11.7 million to $3.8 million for the six months ended June 30, 2025, mainly due to the absence of significant acquisitions compared to the prior year194 - Net cash used in financing activities decreased by $34.9 million to $29.5 million for the six months ended June 30, 2025, primarily due to a $37.1 million decrease in payments on repurchase liabilities195 Critical Accounting Policies and Estimates The company's financial statements rely on estimates and judgments in accordance with U.S. GAAP. There were no material changes to critical accounting policies and estimates from those discussed in the 2024 Form 10-K for the three and six months ended June 30, 2025 - No material changes to critical accounting policies and estimates were identified for the three and six months ended June 30, 2025, from those discussed in the 2024 Form 10-K197 Recently Issued and Adopted Accounting Pronouncements Information regarding recent accounting pronouncements is detailed in Note 2 to the unaudited condensed consolidated financial statements - For a description of recent accounting pronouncements, refer to Note 2 to the unaudited condensed consolidated financial statements198 JOBS Act Accounting Election Biote Corp. is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards, which may result in financial statements not being comparable to other public companies - Biote Corp. is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards under the JOBS Act199 - The company will remain an emerging growth company until the earliest of December 31, 2026, achieving $1.235 billion in annual gross revenue, becoming a 'large accelerated filer,' or issuing over $1.0 billion in non-convertible debt200 Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Biote Corp. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Biote Corp. is not required to provide quantitative and qualitative disclosures about market risk201 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to an unremediated material weakness in internal control over financial reporting related to insufficient qualified personnel and control issues in IT general controls and segregation of duties. Remediation efforts are ongoing, including hiring and implementing enhanced controls, but full remediation is not assured by fiscal year 2025 - As of June 30, 2025, the company's disclosure controls and procedures were not effective due to an unremediated material weakness in internal control over financial reporting203204 - The material weakness stems from an ineffective control environment (insufficient qualified technical accounting personnel) and inadequate control and monitoring activities (IT general controls, user access, segregation of duties)204 - Remediation efforts include hiring additional accounting and finance personnel, implementing enhanced financial statement close processes, and reviewing/assessing access within information systems205 - The material weakness is not expected to be remediated during fiscal year 2025, and no other material changes in internal control over financial reporting occurred during Q2 2025206207 PART II. OTHER INFORMATION This section includes legal proceedings, risk factors, and other required disclosures Item 1. Legal Proceedings This section provides updates on significant legal proceedings. The Right Value Litigation was settled for $5.0 million. The Yosaki and Mioko Trusts litigation was dismissed but is currently under appeal. The temporary injunction in the Cindy Latch litigation was reversed. The Gary S. Donovitz / NIL Litigation is ongoing, with a Delaware court issuing a temporary restraining order precluding prosecution in Texas, and the case subsequently removed to federal court - The Right Value Litigation was settled on February 26, 2025, with BioTE Medical agreeing to pay $5.0 million213 - The Yosaki and Mioko Trusts litigation was dismissed on March 15, 2025, but the Plaintiffs appealed to the Delaware Supreme Court on April 15, 2025215 - The temporary injunction in the Cindy Latch litigation, which restrained BioTE from using her image/likeness, was reversed by the Dallas 5th District Court of Appeals on April 15, 2025218 - In the Gary S. Donovitz / NIL Litigation, a Delaware Chancery Court temporary restraining order precludes Donovitz from prosecuting the Texas litigation, which was later removed to the U.S. District Court for the District of Delaware219220222 Item 1A. Risk Factors This section supplements previously disclosed risk factors, highlighting the potential adverse impact of international trade policies, including tariffs, sanctions, and trade barriers, on the company's business, financial condition, results of operations, and prospects - International trade policies, including tariffs, sanctions, and trade barriers, may adversely affect the company's business, financial condition, results of operations, and prospects225 - Such policies could raise costs of raw materials (e.g., estradiol from China, trocars from Pakistan), disrupt supply chains, reduce margins, necessitate price increases, and harm competitive position and customer demand226 - Ongoing trade uncertainty may complicate strategic planning, increase legal risks related to trade regulations, and lead to heightened international operational difficulties228229 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report231 Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report232 Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable233 Item 5. Other Information There is no other information to report for the period - No other information to report234 Item 6. Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including the Business Combination Agreement, Certificate of Incorporation, Bylaws, and various certifications Table: Exhibits Filed | Exhibit Number | Description | | :------------- | :---------- | | 2.1† | Business Combination Agreement | | 3.1 | Second Amended and Restated Certificate of Incorporation | | 3.2 | Amended and Restated Bylaws | | 31.1* | Certification of Principal Executive Officer | | 31.2* | Certification of Principal Financial Officer and Principal Accounting Officer | | 32.1** | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 | | 32.2** | Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350 | | 101.INS | Inline XBRL Instance Document | | 101.SCH | Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents | | 104 | Cover Page Interactive Data File | Signatures This section confirms the official signing and submission of the report by the authorized officer - The report was signed on August 8