10-K: Biote Corp. Faces Revenue Decline, Control Weakness Amid Recall

Biote Corp. reported a 2.5% revenue decrease and an 8.1% Adjusted EBITDA decline for 2025, alongside un-remediated internal control weaknesses and a product recall, despite a significant increase in net income driven by non-operating gains.

Summary

• Total revenue for the year ended December 31, 2025, decreased by $5.0 million (2.5%) to $192.2 million, from $197.2 million in 2024.
• Net income significantly increased to $31.6 million in 2025, compared to $0.05 million in 2024, primarily due to a $13.0 million gain from the change in fair value of earnout liabilities.
• Adjusted EBITDA decreased by $4.7 million (8.1%) to $53.5 million in 2025, from $58.2 million in 2024.
• Net cash provided by operating activities decreased by $10.0 million (22.3%) to $35.2 million in 2025, from $45.2 million in 2024.
• The company initiated a voluntary recall of specific lots of hormone pellets on January 26, 2026, due to potential metal particulate matter, resulting in a $1.3 million inventory impairment charge in Q4 2025.
• Management concluded that internal control over financial reporting was not effective as of December 31, 2025, due to un-remediated material weaknesses.
• Bret Christensen was appointed Chief Executive Officer on February 1, 2025, succeeding Teresa S. Weber.
• The company settled the Right Value Litigation for $5.0 million, with payments made in February 2025 and February 2026.
• An amendment to the settlement agreement with Gary S. Donovitz resulted in the repurchase of 6.1 million Class V voting shares for $18.5 million, paid on January 2, 2026, and dismissal of related legal matters.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a concerning report due to declining core operational metrics (revenue, Adjusted EBITDA, operating cash flow), un-remediated material weaknesses in internal controls, and a product recall, despite a non-operating gain boosting net income.

Positives

• Net income increased significantly to $31.6 million in 2025 from $0.05 million in 2024, largely due to a non-operating gain from earnout liabilities.
• The company maintains a high practitioner retention rate of over 91% among Biote-certified practitioners as of December 31, 2025.
• Strategic acquisitions in 2024, including Asteria Health (503B outsourcing facility), Simpatra, LLC (intellectual property), and BioSana ID LLC (assets), aim to strengthen control over the supply chain and enhance operational efficiency.
• The Biote-branded dietary supplement business showed a $6.9 million increase in revenue in 2025, driven by e-commerce focus.
• The AnazaoHealth Pharmacy Services Agreement was extended through December 31, 2027, with a one-year extension option, securing a key supply relationship.
• The company successfully resolved the Yosaki and Mioko Trusts litigation, with the Delaware Supreme Court affirming dismissal on December 15, 2025.
• The temporary injunction in the Cindy Latch litigation was reversed on April 15, 2025.
• The Gary S. Donovitz / NIL Litigation was settled, including the repurchase of 6.1 million Class V voting shares for $18.5 million and dismissal of pending legal matters.

Negatives

• Total revenue decreased by $5.0 million (2.5%) in 2025 compared to 2024, primarily due to a $13.3 million decline in procedure revenue.
• Adjusted EBITDA decreased by $4.7 million (8.1%) in 2025 compared to 2024.
• Net cash provided by operating activities decreased by $10.0 million (22.3%) in 2025 compared to 2024.
• Management concluded that internal control over financial reporting was not effective as of December 31, 2025, due to un-remediated material weaknesses, which previously led to restatements of financial statements.
• A voluntary recall of specific lots of hormone pellets was initiated on January 26, 2026, due to the potential presence of metal particulate matter, resulting in a $1.3 million inventory impairment charge in Q4 2025.
• The closing price of Class A common stock was $1.72 per share on March 11, 2026, indicating significant stock price volatility and decline.
• The company's liquidity decreased, with cash and cash equivalents falling from $39.3 million in 2024 to $24.1 million in 2025, and available revolving loans decreasing from $50.0 million to $45.0 million.
• The company faces significant competition in both the hormone replacement therapy and dietary supplement markets, with many competitors having greater resources and brand recognition.
• The company's geographic concentration, with approximately 53% of 2025 revenue from 10 core states, makes it sensitive to regional regulatory, economic, environmental, and competitive conditions.
• The company has no current plans to pay cash dividends on its Class A common stock for the foreseeable future.

Risks

• The success of the Biote Method and Biote-branded dietary supplements depends on significant market acceptance among clinics, practitioners, and patients, which is not assured.
• Reliance on AnazaoHealth Corporation, Right Value Drug Stores, LLC, and Biote-owned Asteria Health for manufacturing bioidentical hormones, with potential for supply disruptions or regulatory non-compliance.
• Geographic concentration of Biote-certified practitioners and partnered clinics makes the company sensitive to regional conditions.
• The frequency of use of the Biote Method by practitioners and clinics may not increase as anticipated.
• Inadequate practitioner training could lead to negative patient outcomes and adversely affect the business.
• Maintaining strong working relationships with Biote-certified practitioners and other medical personnel is crucial for continued development.
• The company's focus on growth may negatively impact near-term results of operations.
• Significant competition in the hormone replacement therapy and dietary supplement markets could hinder market penetration and share.
• Inability to obtain and maintain patent protection or avoid infringement of third-party intellectual property rights could adversely affect commercialization.
• Exposure to intellectual property litigation or administrative proceedings could be costly and disruptive.
• Failure to protect the confidentiality of proprietary information and trade secrets could harm the business and competitive position.
• Claims of wrongful use or misappropriation of third-party intellectual property, or breach of non-competition/non-solicitation agreements.
• Challenges to the company's intellectual property.
• Inadequate protection of trademarks and trade names could hinder brand recognition.
• Failure to comply with FDA and FTC regulations for dietary supplements and convenience kits could lead to business cessation or financial penalties.
• Failure of compounding entities (including Asteria Health) to meet FDA requirements for compounded bioidentical hormones could cause business cessation or financial penalties.
• Regulatory scrutiny of compounded preparations and the compounding pharmacy industry may impair growth and sales.
• Patient injury or death, or product recalls, from compounded drug formulations could lead to significant liabilities and reputational harm (e.g., January 2026 recall).
• FDA regulatory action to implement NASEM recommendations for compounded bioidentical hormones could substantially impact the ability of outsourcing facilities to compound pellets.
• Failure to comply with the FDCA and analogous state laws and regulations could result in administrative, civil, or criminal penalties.
• Lack of third-party and government payor coverage for Biote Method products could decrease demand for training and support services.
• Compromise of information technology systems or data could lead to operational interruptions, data breaches, litigation, fines, and reputational harm.
• Significant increased expenses and administrative burdens as a public company.
• Internal controls over financial reporting do not meet Sarbanes-Oxley Act standards, with material weaknesses not yet remediated, impairing timely and accurate financial statements.
• Inability to maintain Nasdaq listing due to stock price volatility could make Class A common stock more difficult to sell.
• No current plans to pay cash dividends, meaning return on investment depends on stock price appreciation.
• Potential need for additional capital to support business growth, which could dilute existing stockholders or involve restrictive debt covenants.
• Anti-takeover provisions in the Charter and Bylaws, and Delaware law, could impair takeover attempts.
• Future sales by the company or stockholders, or issuance of equity awards, could dilute percentage ownership and cause stock price decline.
• Dependence on distributions from Holdings to pay expenses and TRA obligations, with potential for insufficient funds.
• Payments under the Tax Receivable Agreement (TRA) may exceed actual tax benefits or be accelerated, potentially impacting liquidity.
• Taxing authorities may successfully assert additional sales and use, gross receipts, or similar taxes.
• Unanticipated changes in effective tax rates or adverse outcomes from tax return examinations.
• Increases in income tax rates, changes in tax laws, or disagreements with tax authorities.
• Misconduct by employees, independent contractors, consultants, practitioners, clinics, medical advisors, and suppliers.
• Extreme weather conditions, natural disasters, and other catastrophic events could negatively impact operations and financial condition.
• Adverse developments affecting the financial services industry, such as bank failures, could threaten access to cash.
• Market and economic conditions, including inflation, interest rates, and geopolitical issues, may negatively impact business and stock price.
• International expansion creates various operational challenges and risks.
• International trade policies, including tariffs, sanctions, and trade barriers, may adversely affect the business.

Future Outlook

The company plans to expand its commercial sales team, add new geographies, and increase training capacity in 2026 to meet the increased rate of new Biote-partnered clinics. It will continue researching new dietary supplement formulations and product expansion opportunities, while evaluating selective business development opportunities. The primary focus remains on the U.S. growth strategy before launching international expansion. The company expects to add second source dietary supplement suppliers in 2026 to manage supply chain risks and reduce costs, and anticipates incurring additional costs in future periods related to the January 2026 product recall.

Management Comments

• We believe that our business model has been successful, remains differentiated, and is well positioned for future growth.
• We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our results of operations in the near term.
• We believe our revenue model represents an objective method to assess fees across the varying size and sophistication of our Biote-certified practitioners and clinics.
• We believe our brand advantage with both practitioners and patients is a key element of our commercial growth strategy, and an asset that we intend to leverage to expand our business.
• We believe that the quality of our platform, our size and scale differential, combined with strong brand placement throughout point-of-care delivery has enabled us to establish Biote as a highly recognized brand in the hormone optimization space.
• We are committed to advancing healthcare through product improvement. We constantly evaluate the potential for advanced education and tools to support the hormone optimization market.
• We believe our employee relations are good.
• We believe that our current office space is sufficient to meet our anticipated needs for the foreseeable future and is suitable for the conduct of our business.
• Management is of the opinion that the ultimate liability, if any, from these actions will not have a material effect on its financial condition or results of operations.

Industry Context

StockSavvy.ai notes that Biote Corp. operates within the large and growing U.S. hormone replacement therapy (HRT) market, estimated at over $7 billion in 2020 with an expected 7% annual growth through 2026, driven by aging demographics and increasing consumer demand for hormone imbalance treatments. The company's focus on bioidentical hormone therapy and dietary supplements positions it in a competitive landscape that includes specialized educators like Evexias Health Solutions and SottoPelle, as well as broader dietary supplement brands such as Natures Way and The Vitamin Shoppe. The industry faces ongoing regulatory scrutiny, particularly for compounded drugs, which could impact growth and sales across the sector.

Comparison to Industry Standards

• The filing states the hormone replacement therapy market is estimated to exceed $7 billion as of 2020 and is expected to grow 7% annually through 2026, providing a general market growth benchmark.
• Biote's retention rate of over 91% among Biote-certified practitioners as of December 31, 2025, is presented as evidence of high practitioner satisfaction, but no specific industry average or competitor retention rates are provided for direct comparison.
• The company identifies primary competitors in the education and bioidentical hormone pellet therapy space as Evexias Health Solutions, SottoPelle, Pellecome LLC, Purepell, and Pro-pell Therapy Program, but does not provide specific comparative financial or operational results for these companies.
• In the dietary supplement space, Biote competes with over 20 other accessible brands, including Natures Way and The Vitamin Shoppe, available online and through conventional retailers, but no specific sales figures or market share data for these competitors are given for direct comparison.
• The filing highlights a knowledge gap among medical practitioners regarding menopause and andropause treatment, citing a 2015 survey where 80% of medical residents felt barely comfortable discussing or treating menopause, which Biote aims to address through its training.

Management Changes

Corporate Governance

Legal Proceedings

• Right Value Litigation: Settled on February 26, 2025, with BioTE Medical agreeing to pay Right Value Drug Stores, LLC $5.0 million ($3.5 million paid in February 2025, $1.5 million paid in February 2026). All claims arising from the litigation were mutually released.
• Yosaki and Mioko Trusts Litigation: Dismissed by the Delaware Court of Chancery on March 15, 2025. The Delaware Supreme Court affirmed the dismissal on December 15, 2025, and denied a request for reargument on January 6, 2026, closing the case on January 7, 2026.
• Cindy Latch Litigation: Lawsuit filed on November 15, 2024, alleging misappropriation of name, image, and likeness. A temporary injunction was initially granted but reversed by the Dallas 5th District Court of Appeals on April 15, 2025. A motion for partial summary judgment is pending, with a trial date set for May 4, 2026.
• Gary S. Donovitz / NIL Litigation: Lawsuit filed on December 13, 2024, alleging misappropriation of name, image, and likeness. The company filed a counter-action in Delaware Chancery Court, which issued a preliminary injunction precluding the Texas litigation. An amendment to the settlement agreement with Gary S. Donovitz was executed on November 3, 2025, for the repurchase of 6.1 million Class V voting shares for $18.5 million (paid January 2, 2026), and all pending legal matters between the parties were dismissed with prejudice. Restrictive covenants from the original settlement agreement remain in effect until April 24, 2027.

Related Party Transactions

• The company entered into a consulting agreement with Teresa S. Weber (former CEO) on January 30, 2025, for strategic advisory services for up to one year, paying $0.2 million in 2025.
• The company purchases dietary supplement inventories from a vendor in which its founder holds a minority interest, totaling $0.6 million in 2025 and $0.7 million in 2024.
• The company engaged the services of its former Chief Executive Officer's brother-in-law, Mr. Andy Thacker, through a consulting firm for IT and project management, paying $0.03 million in 2024 (no compensation in 2025).

Stakeholder Impact

• Shareholders: Potential for dilution from future equity raises, volatility in stock price (down to $1.72/share), no planned cash dividends, and impact from earnout liabilities. The un-remediated material weakness in internal controls and product recall could negatively affect investor confidence.
• Employees: Workforce reduction of 16 employees in May 2025 due to organizational restructuring, potentially impacting morale. Management changes at the CEO level.
• Customers (Biote-partnered clinics/practitioners): Continued support through the Biote Method platform, education, and dietary supplements. However, the product recall of hormone pellets from Asteria Health could impact patient trust and practitioner operations. Reliance on third-party compounders and potential regulatory changes pose risks to their ability to provide treatments.
• Suppliers: Continued relationships with 11 U.S.-based dietary supplement suppliers and third-party logistics partners. Plans to add second source suppliers in 2026 to mitigate supply chain risks.
• Regulatory Authorities: Ongoing scrutiny from FDA and FTC regarding dietary supplements, compounded drugs, and medical devices. The company is subject to extensive federal and state healthcare laws and regulations.

Next Steps

• Expand commercial sales team, add new geographies, and increase training capacity in 2026.
• Continue researching new dietary supplement formulations and product expansion opportunities.
• Evaluate selective business development opportunities.
• Add second source dietary supplement suppliers in 2026 to manage supply chain risks and reduce costs.
• Incur additional costs in future periods associated with the January 2026 voluntary recall.
• Remediate identified material weakness in internal control over financial reporting, with efforts ongoing and not assured to be completed in fiscal year 2026.
• Trial date set for Cindy Latch litigation beginning on May 4, 2026.
• Monitor the marketplace and assess potential dietary supplement supply chain changes.

Key Dates

Recommendation

Biote Corp. exhibits several significant red flags for investors, including a decline in core operational revenue and Adjusted EBITDA, coupled with a substantial drop in its Class A common stock price. The un-remediated material weakness in internal controls over financial reporting raises serious concerns about financial integrity and governance. Furthermore, the voluntary recall of hormone pellets due to potential metal particulate matter highlights product quality and regulatory compliance risks. While net income increased, it was primarily driven by a non-operating gain, masking underlying operational challenges. These combined factors suggest a deteriorating financial and operational outlook, warranting a 'sell' recommendation for investors to mitigate further risk.

Keywords

Biote Corp, BTMD, Hormone Optimization, Bioidentical Hormone Replacement Therapy, Dietary Supplements, SEC Filing, 10-K, Financial Performance, Corporate Governance, Risk Factors, Product Recall, Internal Controls, Legal Proceedings, Healthcare Industry, FDA Regulation, Compounding Pharmacy, Nasdaq Listing, Stock Volatility, Acquisitions, Management Changes