10-K: Stemtech 2025 Annual Report: Financial Struggles Persist

Stemtech Corporation reports a significant decline in annual revenue and a widening net loss for fiscal year 2025 amid supply chain disruptions and liquidity constraints.

Summary

• Net sales for 2025 fell to $2,876,380, a 43% decrease from $5,053,690 in 2024.
• Net loss increased to $4,049,840 in 2025 compared to $3,772,701 in 2024.
• Current liabilities rose to $10,854,013, significantly exceeding current assets of $457,062.
• The company is in default under certain Merchant Cash Advance (MCA) financing agreements.
• Total shares outstanding increased to 2,067,960,034 as of May 26, 2026, due to significant debt-to-equity conversions.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a distressed financial situation characterized by recurring losses, debt defaults, and extreme shareholder dilution.

Positives

• Operating expenses were reduced by $1,095,286 compared to the prior year.
• Interest expense decreased to $1,452,150 from $1,579,370 in 2024.
• The company launched a new e-commerce retail platform in February 2026 to expand distribution.
• Secured financing in April 2026 to support $2.5 million in inventory production.

Negatives

• Revenue declined sharply due to stock-outs and supply chain disruptions.
• The company has a working capital deficiency of approximately $10.4 million.
• Substantial doubt exists regarding the company's ability to continue as a going concern.
• Material weaknesses in internal control over financial reporting persist, including lack of an independent audit committee.
• Significant dilution to shareholders resulting from the conversion of convertible debt into over 1.2 billion shares in early 2026.

Risks

• Reliance on discretionary funding from the Leviston Resources, LLC facility.
• Potential acceleration of debt obligations due to defaults on Merchant Cash Advance agreements.
• Lack of cyber liability insurance to mitigate potential data breach financial impacts.
• High concentration of financing from insiders and potential conflicts of interest.
• Penny stock status limits market liquidity and complicates capital raising efforts.

Future Outlook

The company intends to fund operations through the Leviston Resources facility, equity issuances, and director loans, while focusing on inventory replenishment and the new e-commerce platform to drive revenue recovery.

Management Comments

• Management believes it can reinvigorate sales to be more consistent with historical performance.
• Management acknowledges that reliance on the Leviston facility represents a significant risk factor.
• The company is evaluating the acquisition of cyber liability insurance.

Industry Context

StockSavvy.ai notes that Stemtech operates in the highly competitive network marketing and wellness supplement space, where it faces significant headwinds from supply chain volatility and a capital structure heavily burdened by convertible debt, distinguishing it negatively from more stable, cash-flow-positive peers in the direct-selling industry.

Comparison to Industry Standards

• Unlike established direct-selling companies, Stemtech lacks a positive cash flow from operations.
• The company's reliance on high-interest debt and frequent equity dilution is atypical for mature industry participants.
• The absence of an independent audit committee and financial expert deviates from standard corporate governance practices for public companies.

Corporate Governance

Legal Proceedings

• Ongoing lawsuit from former CEO regarding $267,000 in alleged unpaid salary.
• Lenders have initiated legal proceedings regarding defaults on Merchant Cash Advance agreements.

Related Party Transactions

• Short-term working capital loans provided by President/COO John W. Meyer.
• Convertible promissory note payable to director Darryl V. Green.
• Equity compensation issued to directors and officers in lieu of cash.

Stakeholder Impact

• Shareholders face significant dilution from ongoing debt-to-equity conversions.
• Creditors face risks associated with the company's default status and going concern uncertainty.
• Employees and distributors face uncertainty regarding the company's long-term viability.

Next Steps

• Continue efforts to secure additional funding to meet long-term operating requirements.
• Attempt to remediate material weaknesses in internal controls.
• Execute growth strategy through the new Stemtech BioSciences e-commerce platform.

Key Dates

Recommendation

The company is in a state of financial distress with recurring losses, significant debt defaults, and a massive dilution of equity, making it a high-risk investment with poor fundamentals.

Keywords

Stemtech, STEK, Stem Cell Nutrition, Network Marketing, Going Concern, Convertible Debt, OTC Markets