What changed in biote Corp.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of biote Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+168 added−124 removedSource: 10-K (2025-03-14) vs 10-K (2024-03-15)
Top changes in biote Corp.'s 2024 10-K
168 paragraphs added · 124 removed · 86 edited across 2 sections
- Item 6. [Reserved]+105 / −93 · 59 edited
- Item 1C. Cybersecurity+63 / −31 · 27 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
27 edited+36 added−4 removed19 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
27 edited+36 added−4 removed19 unchanged
2023 filing
2024 filing
Biggest changeOn November 4, 2022, the Delaware Court of Chancery denied that request for injunctive relief, permitting the Biote Dallas Action and all defenses and claims asserted therein to proceed in Texas. 57 A jury trial in the Biote Dallas Action was to commence on September 11, 2023, to address the Company’s affirmative claim for breach of contract, request for a permanent injunction, as well as the counterclaims and third-party claims asserted by Donovitz.
Biggest changeA jury trial in the Biote Dallas Action was to commence on September 11, 2023, to address our affirmative claim for breach of contract, request for a permanent injunction, as well as the counterclaims and third-party claims asserted by Donovitz.
Risk management and strategy We have implemented and maintain policies and processes designed to assess, identify, and manage material risk from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and trade secrets, data we may collect about trial participants in connection with clinical trials, sensitive third-party data, business plans, 55 transactions, and financial information (“Information Systems and Data”).
Risk management and strategy We have implemented and maintain policies and processes designed to assess, identify, and manage material risk from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic or competitive in nature, and trade secrets, data we may collect about trial participants in connection with clinical trials, sensitive third-party data, business plans, transactions, and financial information (“Information Systems and Data”).
Our CIO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Our CIO meets with the audit committee periodically to review our information technology systems and discuss key cybersecurity risks.
Our CIO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel. Our CIO meets with the audit committee periodically to review our information technology systems and discuss key cybersecurity risks.
On June 23, 2022, Donovitz sued Haymaker Sponsor, LLC, the Company’s outside legal counsel, and certain Company executive officers and directors in the District Court of Dallas County, Texas (the “Donovitz Dallas Action”), generally alleging fraud, fraudulent inducement, negligent misrepresentation, a breach of the covenant of good faith and fair dealing, breaches of fiduciary duties, and/or aiding and abetting those alleged breaches against the defendants (the “Donovitz Claims”).
On June 23, 2022, Donovitz sued Haymaker Sponsor, LLC, our outside legal counsel, and certain Company executive officers and directors in the District Court of Dallas County, Texas (the “Donovitz Dallas Action”), generally alleging fraud, fraudulent inducement, negligent misrepresentation, a breach of the covenant of good faith and fair dealing, breaches of fiduciary duties, and/or aiding and abetting those alleged breaches against the defendants (the “Donovitz Claims”).
Governance Our Board of Directors and Audit Committee are actively engaged in the oversight of our risk management, including cybersecurity risk. The Board of Directors and Audit Committee receive quarterly reports on information security from our CIO.
Governance 55 Our Board of Directors and Audit Committee are actively engaged in the oversight of our risk management, including cybersecurity risk. The Board of Directors and Audit Committee receive quarterly reports on information security from our CIO.
On April 12, 2023, Lani Hammonds Donovitz, individually and on behalf of Lani D Consulting, dismissed with prejudice all of her counterclaims and third-party claims in the Biote Dallas Action, and subsequently agreed to a permanent injunction in favor of the Company, which was entered by the Court on April 17, 2023.
On April 12, 2023, Lani Hammonds Donovitz, individually and on behalf of Lani D Consulting, dismissed with prejudice all of her counterclaims and third-party claims in the Biote Dallas Action, and subsequently agreed to a permanent injunction in our favor, which was entered by the Court on April 17, 2023.
On September 8, 2022, the Delaware Court of Chancery denied Donovitz’s request for injunctive relief, determining that expedited proceedings and a status quo order were both unwarranted and rejecting a mandated meeting of the stockholders. On August 2, 2022, the Company sued Donovitz, Lani Hammonds Donovitz, and Lani D.
On September 8, 2022, the Delaware Court of Chancery denied Donovitz’s request for injunctive relief, determining that expedited proceedings and a status quo order were both unwarranted and rejecting a mandated meeting of the stockholders. On August 2, 2022, we sued Donovitz, Lani Hammonds Donovitz, and Lani D.
The Company successfully obtained a temporary restraining order to enforce the non-disparagement obligations of Donovitz and Lani Hammonds Donovitz. The parties subsequently entered into an agreed order that the temporary restraining order will stay in effect until the entry of a final judgment.
We successfully obtained a temporary restraining order to enforce the non-disparagement obligations of Donovitz and Lani Hammonds Donovitz. The parties subsequently entered into an agreed order that the temporary restraining order will stay in effect until the entry of a final judgment.
On August 17, 2023, Donovitz nonsuited without prejudice all of his counterclaims and third-party claims in the Biote Dallas Action, leaving only the Company’s affirmative claim against Donovitz to be tried on September 11, 2023.
On August 17, 2023, Donovitz nonsuited without prejudice all of his counterclaims and third-party claims in the Biote Dallas Action, leaving only our affirmative claim against Donovitz to be tried on September 11, 2023.
On August 24, 2022, Donovitz sued the Company, including certain executive officers and directors of the Company, in the Delaware Court of Chancery, seeking (a) a status quo order preventing the defendants from diluting any stockholder’s equity or voting power, (b) an injunction requiring the defendants to convene a special meeting of the stockholders, and (c) a request to either void a portion of the Company’s Certificate of Incorporation or allow stockholders to elect directors to a vacancy on the board in accordance with Delaware General Corporate Law (the “Second Delaware Action”).
On August 24, 2022, Donovitz sued us, including certain of our executive officers and directors, in the Delaware Court of Chancery, seeking (a) a status quo order preventing the defendants from diluting any stockholder’s equity or voting power, (b) an injunction requiring the defendants to convene a special meeting of the stockholders, and (c) a request to either void a portion of our Certificate of Incorporation or allow stockholders to elect directors to a vacancy on the board in accordance with Delaware General Corporate Law (the “Second Delaware Action”).
On July 11, 2022, the Company sued Donovitz in the Delaware Court of Chancery, pursuing injunctive relief to prevent Donovitz from proceeding with the litigation in the Donovitz Dallas Action in Texas (the “First Delaware Action”).
On July 11, 2022, we sued Donovitz in the Delaware Court of Chancery, pursuing injunctive relief to prevent Donovitz from proceeding with the litigation in the Donovitz Dallas Action in Texas (the “First Delaware Action”).
On August 23, 2022, the defendants filed an answer in the Biote Dallas Action, which included affirmative defenses to the Company’s claims and certain counterclaims and third-party claims against certain executive officers of the Company.
On August 23, 2022, the defendants filed an answer in the Biote Dallas Action, which included affirmative defenses to our claims and certain counterclaims and third-party claims against certain of our executive officers.
In addition, the Company and Donovitz have agreed to, among other things, (i) a customary mutual release of all claims arising out of or relating to the Donovitz Litigation, (ii) the termination of the founder advisory agreement, dated as of May 18, 2022, by and between Donovitz and BioTE Medical, LLC, (iii) two year non-compete and non-solicitation agreements for Donovitz and (iv) the negotiation of and entry into a voting agreement with customary terms acceptable to the Company.
In addition, we and Donovitz have agreed to, among other things, (i) a customary mutual release of all claims arising out of or relating to the Donovitz Litigation, (ii) the termination of the founder advisory agreement, dated as of May 18, 2022, by and between Donovitz and BioTE Medical, LLC, (iii) two year non-compete and non-solicitation agreements for Donovitz and (iv) a voting agreement with customary terms acceptable to us.
It em 4. Mine Safety Disclosures. Not applicable. 58 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Prior to the closing of our business combination, HYAC common stock, units and warrants were listed on Nasdaq under the symbols “HYAC,” “HYACU” and “HYACW,” respectively.
Not applicable. 59 PART II It em 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Prior to the closing of our business combination, HYAC common stock, units and warrants were listed on Nasdaq under the symbols “HYAC,” “HYACU” and “HYACW,” respectively.
The Company seeks to enforce (a) the Company’s certificate of incorporation, which mandates that stockholders must bring certain actions, including some or all of the Donovitz Claims, exclusively in Delaware, and (b) the Business Combination Agreement, by which Donovitz consented to the exclusive jurisdiction of the Delaware Court of Chancery and agreed that Delaware law governs any related claims, including some or all of the Donovitz Claims.
We sought to enforce (a) our certificate of incorporation, which mandates that stockholders must bring certain actions, including some or all of the Donovitz Claims, exclusively in Delaware, and (b) the Business Combination Agreement, by which Donovitz consented to the exclusive jurisdiction of the Delaware Court of Chancery and agreed that Delaware law governs any related claims, including some or all of the Donovitz Claims.
On August 24, 2023, Donovitz filed amended counterclaims in the First Delaware Action, again generally reasserting the Donovitz Claims previously brought in the Donovitz Dallas Action but also asserting derivative claims against the Company’s directors. On October 23, 2023, the Company filed its response to Donovitz’s amended counterclaims.
On August 24, 2023, Donovitz filed amended counterclaims in the First Delaware Action, again generally reasserting the Donovitz Claims previously brought in the Donovitz Dallas Action but also asserting derivative claims against our directors. On October 23, 2023, we filed our response to Donovitz’s amended counterclaims.
After the filing of the Biote Dallas Action, the Company amended its claim in the Delaware Court of Chancery to also seek an injunction to prevent Donovitz from proceeding with certain of the affirmative defenses, counterclaims, and third-party claims filed by the defendants on August 23, 2022.
After the filing of the Biote Dallas Action, we amended our claim in the First Delaware Action to also seek an injunction to prevent Donovitz from proceeding with certain of the affirmative defenses, counterclaims, and third-party claims filed by the 57 defendants on August 23, 2022.
On November 2, 2023, the jury returned a verdict awarding the Company $4.7 million plus the potential for an additional $0.2 million for future fees, which constituted all of the attorneys’ fees that the Company had sought against Donovitz in the Biote Dallas Action. On November 16, 2023, Donovitz, as trustee for the Gary S.
On November 2, 2023, the jury returned a verdict awarding us $4.7 million plus the potential for an additional $0.2 million for future fees, which constituted all of the attorneys’ fees that we had sought against Donovitz in the Biote Dallas Action.
The Company sought recovery of its attorneys’ fees against Donovitz in a jury trial that began on October 30, 2023.
We sought recovery of our attorneys’ fees against Donovitz in a jury trial that began on October 30, 2023.
No market exists for the Class V common stock. Holders As of March 11, 2024, there were 36 holders of record of our Class A common stock, 9 holders of record of our Class V common stock.
No market exists for the Class V common stock. Holders As of March 12, 2025, there were 36 holders of record of our Class A common stock, 10 holders of record of our Class V common stock.
Pursuant to the settlement term sheet, the Company will repurchase all of the Class A common units of Biote Holdings, LLC, the Class V common stock of Biote and the Class A common stock of the Company, currently beneficially owned by Donovitz for approximately $76.9 million in the aggregate.
Pursuant to the settlement agreement, we agreed to repurchase all of the Class A common units of Biote Holdings, LLC, the Class V voting stock of Biote (together, “Paired Interests”) and the Class A common stock, currently beneficially owned by Donovitz for approximately $76.9 million in the aggregate.
The cybersecurity function within the Company, which comprises, in part, our information technology (“IT”) security director (who has several years of commercial experience and a master’s degree of information systems with a focus on cybersecurity) and other members of our technical staff management, along with our legal advisors, risk management team, and overall information security function, helps identify, assess and manage the Company’s cybersecurity threats and risks.
Our cybersecurity function, which comprises, in part, our information technology (“IT”) security director and other members of our technical staff management, along with our legal advisors, risk management team, and overall information security function, helps identify, assess and manage our cybersecurity threats and risks.
On May 27, 2022, our Class A common stock began trading on Nasdaq under the symbols “BTMD”. We no longer have any outstanding units or warrants. As of March 11, 2024, there were 35,712,492 shares of Class A common stock outstanding and 38,819,066 shares of our Class V common stock (the “Class V common stock”) issued and outstanding.
On May 27, 2022, our Class A common stock began trading on Nasdaq under the symbols “BTMD.” We no longer have any outstanding units or warrants. As of March 12, 2025, there were 33,073,277 shares of Class A common stock outstanding and 7,249,879 shares of our Class V common stock (the “Class V common stock”) issued and outstanding.
Regardless of the outcome, litigation has the potential to have an adverse impact on us due to defense costs and possible settlement expenses, diversion of management resources and other factors. Donovitz Litigation The Company is currently involved in litigation described below with one of the Company’s stockholders, Dr. Gary S. Donovitz (“Donovitz”) (the “Donovitz Litigation”).
Regardless of the outcome, litigation has the potential to have an adverse impact on us due to defense costs and possible settlement expenses, diversion of management resources and other factors.
Legal Proceedings. From time to time, we may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business.
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. Ite m 3. Legal Proceedings. From time to time, we may be involved in various legal proceedings and subject to claims that arise in the ordinary course of business.
Additionally, we lease two modest storage facilities, located in Irving, Texas. These spaces, which include a total of approximately 450 square feet, are leased on a month-to-month basis. 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. 56 Ite m 3.
We also lease two modest storage facilities, located in Irving, Texas. These spaces, which include a total of approximately 450 square feet, are leased on a month-to-month basis.
The Company will repurchase the shares over a three-year period commencing on the date the definitive settlement agreement is signed.
We will repurchase the shares over a three-year period commencing on April 26, 2024.
Removed
The outcome of the Donovitz Litigation, regardless of the merits, is inherently uncertain. At this point in time, the Company cannot predict the length of the Donovitz Litigation or the ultimate liability, if any, which may arise therefrom.
Added
On September 11, 2024, we entered into a 60-month operating lease agreement for approximately 19,076 square feet of office space in Birmingham, Alabama that will be used by Asteria Health to expand its compounded bioidentical hormones manufacturing facility capabilities.
Removed
In addition, litigation and related matters are costly and may divert the attention of the Company’s management and other resources that would otherwise be engaged in other activities. However, the Donovitz Litigation is not expected to have a material adverse effect on the consolidated results of operations or financial position of the Company.
Added
Right Value Litigation On January 30, 2024, a lawsuit was filed in the 162nd Judicial District Court of Dallas County, Texas (the “District Court of Dallas County”) against us by Right Value Drug Stores, LLC d/b/a Carie Boyd’s Prescription Ship n/k/a Carie Boyd Pharmaceuticals (“Right Value”). The lawsuit generally alleges breach of contract, fraud, and declaratory judgment (“Right Value Litigation”).
Removed
Donovitz 2012 Irrevocable Trust, together with Biote Management, LLC, sued Biote Holdings, LLC and BioTE Medical, LLC in the Delaware Court of Chancery. Donovitz sought inspection of the books and records of Biote Holdings, LLC. The parties stipulated to dismissal of BioTE Medical, LLC and agreed to stay the case pending completion of the parties’ scheduled mediation.
Added
We brought counterclaims against Right Value generally for fraud, breach of contract, and quantum meruit.
Removed
On February 13, 2024, the Company and Donovitz, through mediation, executed a binding settlement term sheet to resolve all remaining outstanding litigation with Donovitz. Pursuant to the settlement term sheet, the Company and other parties thereto have agreed to prepare and enter into a definitive settlement agreement, which will supersede the settlement term sheet and substantially incorporate the terms thereof.
Added
On September 26, 2024, Right Value amended its petition to seek injunctive relief, asking the District Court of Dallas County to impose a mandatory injunction that would require us to pay at least $1.2 million per month to Right Value through the conclusion of the trial.
Added
On September 27, 2024, the District Court of Dallas County conducted a hearing on Right Value’s application, and, at the conclusion of that hearing, the District Court of Dallas County denied Right Value’s application for temporary restraining order and set the hearing on Right Value’s application for temporary injunction on November 11, 2024 (the “November 11th Hearing”).
Added
The parties engaged in expedited discovery and briefing in advance of the November 11th Hearing. At the conclusion of the November 11th Hearing, the District Court of Dallas County denied Right Value’s request for a temporary injunction. On February 26, 2025, BioTE Medical entered into a Settlement Agreement (the “Settlement Agreement”) with Right Value.
Added
Pursuant to the Settlement Agreement, BioTE Medical agreed to pay Right Value an aggregate amount of $5.0 million according to the following schedule: (i) $3.5 million within three (3) business days upon execution of the Settlement Agreement and (ii) $1.5 million within one (1) business day following February 17, 2026.
Added
Additionally, the parties identified therein have agreed to, among other things, a customary mutual release of all claims arising out of or relating to the Right Value Litigation, except as expressly 56 provided in the Settlement Agreement. The Settlement Agreement also contains customary representations, warranties and agreements by the parties in addition to the terms described above.
Added
Yosaki and Mioko Trusts On July 12, 2024, a lawsuit was filed in the Delaware Court of Chancery against Haymaker Sponsor III, LLC, our outside legal counsel, and certain Company executive officers and directors (collectively, "Defendants") by two trusts ("Plaintiffs") that allegedly owned shares representing approximately 4.2% of our outstanding stock immediately following the May 26, 2022 transaction with Haymaker Acquisition Corp III.
Added
The lawsuit alleges breaches of fiduciary duties, aiding and abetting those alleged breaches, and unjust enrichment ("July 12, 2024 Litigation"). On July 22, 2024, the Plaintiffs amended their complaint to withdraw their allegation of current equity ownership. The Defendants have filed a motion to dismiss the lawsuit.
Added
Briefing on this motion concluded on November 22, 2024, and oral arguments are set to occur in March 2025. We believe the claims asserted in the July 12, 2024 Litigation are without merit and intend to vigorously defend against them.
Added
However, given the preliminary stage of the proceedings, we are currently unable to predict the outcome of this matter or estimate the range of potential loss, if any, that may result. Dr. Gary S. Donovitz Litigation On April 23, 2024, we settled all outstanding litigation described below with one of our stockholders, Dr. Gary S. Donovitz (“Donovitz”) (the “Donovitz Litigation”).
Added
On November 4, 2022, the Delaware Court of Chancery denied that request for injunctive relief, permitting the Biote Dallas Action and all defenses and claims asserted therein to proceed in Texas.
Added
On April 23, 2024, we executed a binding settlement agreement with Donovitz to resolve all remaining outstanding litigation with Donovitz.
Added
On April 26, 2024, we repurchased 5,075,090 shares of Class A common stock and 3,117,299 Paired Interests for approximately $32.2 million. Additionally, under the terms of the settlement agreement, we canceled 3,985,887 earnout securities. We recorded the impact of the settlement agreement during our second fiscal quarter ended June 30, 2024. Marci M.
Added
Donovitz On June 5, 2024, one of our stockholders, a trust associated with Marci M. Donovitz (“Ms.
Added
Donovitz”), sued Haymaker Sponsor III, LLC, our outside legal counsel, and certain of our executive officers and directors in the Delaware Court of Chancery, generally alleging negligent misrepresentation, breaches of fiduciary duties, and/or aiding and abetting those alleged breaches against the defendants (the “June 5, 2024 Litigation”). On June 28, 2024, we executed a settlement agreement with Ms.
Added
Donovitz to resolve the June 5, 2024 Litigation. Pursuant to the settlement agreement, we agreed to repurchase all of the Paired Interests and shares of Class A common stock beneficially owned by Ms. Donovitz for $60.0 million in the aggregate. We will repurchase the shares over a three-year period commencing on June 28, 2024. In addition, we and Ms.
Added
Donovitz have agreed to, among other things, (i) a customary mutual release of all claims arising out of or relating to the June 5, 2024 Litigation; (ii) a voting agreement with customary terms acceptable to us; and, the acceleration of the purchase schedule in the event of a change of control.
Added
On June 28, 2024, we repurchased 4,146,610 Paired Interests for $30.0 million. Additionally, under the terms of the settlement agreement, we canceled 3,985,887 earnout securities. As a result of settling the Donovitz Litigation and the June 5, 2024 Litigation, we recorded a combined repurchase liability of $128.4 million.
Added
Accreted interest on the share repurchase liability was $2.6 million which was included in interest expense, net on the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.
Added
Cindy Latch On November 15, 2024, Cindy Latch, an actress / model who formerly appeared in one BioTE marketing video, filed suit against BioTE alleging misappropriation of her name, image and likeness by both BioTE and various of its approved practitioners (the “November 15 2024 Litigation”) and seeking a temporary restraining order and temporary injunction.
Added
The November 15 2024 Litigation is pending in the 101st Judicial District Court of Dallas County, Texas. On November 25, 2024, a hearing was held on Latch’s request for a temporary restraining order.
Added
That same day, the court signed an order granting a temporary restraining order purporting to restrain BioTE and “all Biote affiliates and practitioners from further utilizing Plaintiff’s image or likeness for the furtherance of any Biote business” until a temporary injunction hearing can be held.
Added
A temporary injunction hearing was held on December 9, 2024, and on that same day, the 101st Judicial District Court judge signed a temporary injunction granting essentially the same relief as in the temporary restraining order.
Added
Believing there to be numerous deficiencies in the temporary injunction, on December 17, 2024, BioTE filed a Motion for Expedited Temporary Relief Staying the Temporary Injunction Pending Appeal seeking to stay the enforcement of the temporary injunction while BioTE pursued an appeal of that order. On February 12, 2025, the 5th District Court of Appeals denied that requested relief.
Added
In the interim, on January 16, 2025, BioTE filed its appellate brief seeking to overturn the December 9 temporary injunction order. Briefing on the appeal was completed on February 25, 2025. 58 Gary S.
Added
Donovitz / NIL Litigation On December 13, 2024, Donovitz filed suit against BioTE Medical alleging misappropriation of his name, image and likeness by BioTE and various of its approved practitioners (the “December 13, 2024 Litigation”) and seeking a temporary restraining order and temporary injunction.
Added
The December 13, 2024 Litigation is pending in the 101st Judicial District Court of Dallas County, Texas.
Added
Because BioTE contends that, pursuant to the April 23, 2024 settlement agreement, Donovitz’s claims were required to be brought before former Delaware Chancery Court Chancellor Chandler, on December 17, 2024, BioTE filed an action against Donovitz in Delaware Chancery Court (the “December 17, 2024 Litigation”) seeking a preliminary and permanent injunction enjoining Donovitz from pursuing the December 13, 2024 Litigation in Texas.
Added
On December 18, 2024, following a hearing on Donovitz’s request for a temporary restraining order, the 101st Judicial District Court judge entered a temporary restraining order purporting to enjoin Biote and “all its affiliates, partnered-clinics and practitioners” from further utilizing Donovitz’s name, image or likeness for furtherance of any Biote business until a hearing could be held on Donovitz’s request for a temporary injunction.
Added
The temporary injunction hearing was set for December 27, 2024. Also on December 18, 2024, the Delaware Chancery Court issued a temporary restraining order precluding Donovitz from prosecuting the December 13, 2024 Litigation in Texas.
Added
On December 23, 2024, a hearing was held before Vice Chancellor Laster of the Delaware Chancery Court to determine if the Delaware temporary restraining order should be renewed. Following the hearing, Vice Chancellor Laster entered an order renewing the Delaware temporary restraining order as a preliminary injunction which, again, precluded Donovitz from prosecuting the December 13, 2024 Litigation in Texas.
Added
Subsequently, on December 27, 2024, a hearing was held before the 101st Judicial District Court of Dallas County on Donovitz’s application for a temporary injunction.
Added
Following the hearing, the 101st Judicial District Court entered a temporary injunction continuing to enjoin BioTE and “all its affiliates, partnered-clinics and practitioners” from further utilizing Donovitz’s name, image or likeness for furtherance of any Biote business. BioTE has appealed the entry of the temporary injunction entered by the 101st Judicial District Court.
Added
Its opening brief was filed on February 24, 2025. Donovitz’s response is currently due on March 17, 2025. Donovitz has filed a request to appeal regarding the Delaware order renewing temporary restraining order as a preliminary injunction. The Delaware Supreme Court has not yet ruled on that request. It em 4. Mine Safety Disclosures.
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
59 edited+46 added−34 removed54 unchanged
Item 6. [Reserved]
Selected Financial Data — reserved (removed by SEC in 2021)
59 edited+46 added−34 removed54 unchanged
2023 filing
2024 filing
Biggest changeThe following table presents a reconciliation of net income (loss) to Adjusted EBITDA: Year Ended December 31, (in thousands) 2023 2022 Net income (loss) $ (2,805 ) $ 1,324 Interest expense, net 6,363 4,047 Income tax expense 2,682 388 Depreciation and amortization 2,994 2,199 Loss from extinguishment of debt (1) — 445 Share-based compensation expense (2) ` 9,057 82,180 Litigation expenses-former owner (3) 6,770 3,603 Litigation-other (4) 633 477 Legal settlement (gain) loss (5) 1,048 88 Transaction-related expenses (6) 2,118 21,627 Other expenses (7) 1,174 646 Merger and acquisition expenses (8) 2,821 — (Gain) loss from change in fair value of warrant liability 13,411 (5,127 ) (Gain) loss from change in fair value of earnout liability 8,990 (61,770 ) Adjusted EBITDA $ 55,256 $ 50,127 (1) Represents unamortized debt issuance costs of $0.4 million charged to extinguishment of debt upon full repayment of the Company’s credit agreement with Bank of America.
Biggest changeThe following table presents a reconciliation of net income (loss) to Adjusted EBITDA: Year Ended December 31, (in thousands) 2024 2023 Net Income (loss) $ 46 $ (2,805 ) Interest expense, net (1) 11,001 6,363 Income tax expense 970 2,682 Depreciation and amortization (2) 3,574 2,994 Share-based compensation expense (3) ` 8,735 9,057 Litigation expenses-former owner (4) 972 6,770 Litigation-other (5) 2,688 633 Legal settlement loss (6) 5,018 1,048 Inventory fair value write-up (7) 1,324 — Transaction-related expenses (8) 82 2,118 Other expenses (9) 3,191 1,174 Merger and acquisition expenses (10) 1,019 2,821 Loss from change in fair value of warrant liability — 13,411 Loss from change in fair value of earnout liabilities 19,605 8,990 Adjusted EBITDA $ 58,225 $ 55,256 (1) Represents cash and non-cash interest on our debt obligations, commitment fees for our unused Revolving Loans, net of interest income earned on our money market account and short-term investment.
Some of these limitations are as follows: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and 65 • Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us.
Some of these limitations are as follows: • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; • Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and • Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us.
The Biote Method is a comprehensive, end-to-end practice building platform that provides Biote-certified practitioners with the components specifically developed for practitioners in the hormone optimization space: Biote Method education, training and certification, practice management software, inventory management software, and information regarding available HRT products, as well as digital and point-of-care marketing support.
The Biote Method is a comprehensive, end-to-end practice building platform that provides Biote-certified practitioners with the following components specifically developed for practitioners in the hormone optimization space: Biote Method education, training and certification, practice management software, inventory management software, and information regarding available HRT products, as well as digital and point-of-care marketing support.
Refer to Note 2 to our consolidated financial statements for additional discussion of our revenue recognition policy. Inventories Our inventories consist of physician-prescribed pellets used by Biote-certified practitioners in partnered clinics and Biote-branded dietary supplements which are sold and distributed to the Biote-partnered clinics and their patients. Custody of the pellets remains with Biote-certified practitioners.
Refer to Note 2 to our consolidated financial statements for additional discussion of our revenue recognition policy. 69 Inventories Our inventories consist of physician-prescribed pellets used by Biote-certified practitioners in partnered clinics and Biote-branded dietary supplements which are sold and distributed to the Biote-partnered clinics and their patients. Custody of the pellets remains with Biote-certified practitioners.
Non-GAAP Measures Adjusted EBITDA is a non-GAAP performance measure that provides supplemental information that we believe is useful to analysts and investors to evaluate the Company’s ongoing results of operations when considered alongside net income (the most directly comparable U.S. GAAP measure). We use Adjusted EBITDA as alternative measures to evaluate our operational performance.
Non-GAAP Measures Adjusted EBITDA is a non-GAAP performance measure that provides supplemental information that we believe is useful to analysts and investors to evaluate our ongoing results of operations when considered alongside net income (the most directly comparable U.S. GAAP measure). We use Adjusted EBITDA as alternative measures to evaluate our operational performance.
However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP.
However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and 66 should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP.
We also sell a complementary Biote-branded line of dietary supplements. By virtue of our historical performance over the past 12 years, we believe that our business model has been successful, remains differentiated, and is well positioned for future growth. Our go-to-market strategy focuses on: • Increase the number of Biote-certified practitioners .
We also sell a complementary Biote-branded line of dietary supplements. By virtue of our historical performance over the past 13 years, we believe that our business model has been successful, remains differentiated, and is well positioned for future growth. Our go-to-market strategy focuses on: • Increase the number of Biote-certified practitioners .
While the option to receive and right to use the reusable trocars through the term of the contract represents an embedded lease, we have adopted the practical expedient within ASC 842 to combine the lease and non-lease components and account for the combined component under ASC 606. 62 For Biote Method arrangements, we recognize revenue for training and for management services over time.
While the option to receive and right to use the reusable trocars through the term of the contract represents an embedded lease, we have adopted the practical expedient within ASC 842 to combine the lease and non-lease components and account for the combined component under ASC 606. 63 For Biote Method arrangements, we recognize revenue for training and for management services over time.
Our Biote-branded dietary supplement line currently includes 19 dietary supplements that we offer to our Biote-certified practitioners through our eCommerce site, efficiently leveraging our core Biote provider platform. Practitioners then re-sell Biote-branded dietary supplements to their patients, enabling patients to receive physician-guided therapies to manage the related effects of aging.
Our Biote-branded dietary supplement line currently includes 24 dietary supplements that we offer to our Biote-certified practitioners through our eCommerce site, efficiently leveraging our core Biote provider platform. Practitioners then re-sell Biote-branded dietary supplements to their patients, enabling patients to receive physician-guided therapies to manage the related effects of aging.
We are exposed to interest rate risk in relation to our long-term debt outstanding. As is more fully described in Note 8 to the consolidated financial statements elsewhere in this Annual Report, our outstanding long-term debt has a variable rate of interest, which is primarily based on the Standard Overnight Financing Rate.
We are exposed to interest rate risk in relation to our long-term debt outstanding. As is more fully described in Note 10 to the consolidated financial statements elsewhere in this Annual Report, our outstanding long-term debt has a variable rate of interest, which is primarily based on the Standard Overnight Financing Rate.
The future amount and timing of interest payments under our long-term debt agreement are expected to vary with the amount and then-prevailing contractual interest rates of our debt, which are discussed in Note 8 to our consolidated financial statements.
The future amount and timing of interest payments under our long-term debt agreement are expected to vary with the amount and then-prevailing contractual interest rates of our debt, which are discussed in Note 10 to our consolidated financial statements.
Gain (Loss) from Change in Fair Value of Warrant Liability Gain (loss) from change in fair value of warrant liability consists of the change in fair value of the warrant liability during the period.
Loss from Change in Fair Value of Warrant Liability Loss from change in fair value of warrant liability consists of the change in fair value of the warrant liability during the period.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates continue to rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, consequences associated with global health crises and ongoing international conflicts such as the conflict between Russia and Ukraine and the Israel-Hamas war, and employee availability and wage increases, which may result in additional stress on our working capital resources.
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates continue to rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, international tariffs, consequences associated with global health crises and ongoing international conflicts such as the conflict between Russia and Ukraine and conflicts in the Middle East, and employee availability and wage increases, which may result in additional stress on our working capital resources.
Rising interest and inflation rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future.
Inflation and relatively high interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future.
On May 9, 2023, the Company announced the commencement of its offer to each holder of its outstanding warrants, the opportunity to receive shares of common stock in exchange for each warrant tendered by the holder. During the year ended December 31, 2023, the Company issued common stock valued at $17.5 million in exchange for all outstanding warrants.
On May 9, 2023, we announced the commencement of our offer to each holder of our outstanding warrants, the opportunity to receive shares of common stock in exchange for each warrant tendered by the holder. During the year ended December 31, 2023, we issued common stock valued at $17.5 million in exchange for all outstanding warrants.
We believe that for at least the next 12 months, our current cash position, coupled with anticipated cash generated from operations and the capacity under our revolving loans, is sufficient to fund our operations and our debt service obligations. As of December 31, 2023 and 2022, we had cash and cash equivalents of $89.0 million and $79.2 million, respectively.
We believe that for at least the next 12 months, our current cash position, coupled with anticipated cash generated from operations and the capacity under our revolving loans, is sufficient to fund our operations and our debt service obligations. As of December 31, 2024 and 2023, we had cash and cash equivalents of $39.3 million and $89.0 million, respectively.
The variable interest rate on our long-term debt has increased since our last fiscal year, to a rate of 8.0% as of December 31, 2023 from a rate of 6.9% as of December 31, 2022. Inflation We do not believe that inflation has had a material effect on our business, financial condition, or results of operations.
The variable interest rate on our long-term debt has increased since our last fiscal year, to a rate of 7.2% as of December 31, 2024 from a rate of 8.0% as of December 31, 2023. Inflation We do not believe that inflation has had a material effect on our business, financial condition, or results of operations.
Gain (Loss) from Change in Fair Value of Warrant Liability The change in the gain (loss) from change in fair value of warrant liability was primarily due to the Company’s offer to exchange its outstanding warrants for common stock.
Loss from Change in Fair Value of Warrant Liability The change in fair value of warrant liability was primarily due to our offer to exchange our outstanding warrants for common stock.
Recent Developments Impact of Global Economic Trends Global economic conditions have been challenging, with disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of public health crises and otherwise.
Recent Developments Impact of Global Economic Trends Global economic conditions have been challenging, with disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of public health crises, uncertainties associated with the changes to and by the U.S. federal government and otherwise.
(7) Represents executive severance costs of $0.8 million, costs related to recruiting executive level management, including the Chief Commercial Officer of $0.2 million, legal fees of $0.1 million and professional services fees of $0.1 million associated with the restatement of the Company’s financial statements for the quarters ended June 30, 2022 and September 30, 2022 and a realized foreign currency loss of less than $0.02 million.
For the year ended December 31, 2023, this amount represents executive severance costs of $0.8 million, costs related to recruiting executive level management, including the Chief Commercial Officer of $0.2 million, legal fees of $0.1 million and professional services fees of $0.1 million associated with the restatement of our financial statements for the quarters ended June 30, 2022 and September 30, 2022 and a realized foreign currency loss of less than $0.02 million.
Additionally, as of both December 31, 2023 and 2022, we had $50.0 million of revolving loans available under our Truist credit agreement.
Additionally, as of each of December 31, 2024 and 2023, we had $50.0 million of revolving loans available under our Truist credit agreement.
Dietary supplements are evaluated at the product level based on sales of our products in the recent past and/or expected future demand. Future demand is affected by market conditions, new products and strategic plans, each of which is subject to change with little or no forewarning.
Dietary supplements are evaluated at the product level based on sales of our products in the recent past and/or expected future demand. Future demand is affected by market conditions, new products and strategic plans, each of which is subject to change with little or no forewarning. In estimating obsolescence, we utilize information that includes projecting future demand.
Interest Expense, Net Interest expense, net consists primarily of cash and non-cash interest under our Term Loan, commitment fees for our unused Revolving Loans and interest income earned on our money market account and now matured short-term investment.
Interest Expense, Net Interest expense, net consists primarily of cash and non-cash interest under our Term Loan, commitment fees for our unused Revolving Loans, accreted interest related to our share repurchase liabilities, net of interest income earned on our money market account and our now matured short-term investment.
(2) Represents employee compensation expense associated with equity-based stock awards. This includes expense associated with equity incentive instruments including phantom stock awards, stock options and restricted stock units. (3) Represents legal expenses to defend the Company against claims asserted by the Company’s former owner.
(3) Represents employee compensation expense associated with equity-based stock awards. This includes expense associated with equity incentive instruments including phantom stock awards, stock options and restricted stock units. (4) Represents legal expenses to defend us against claims asserted by our former owner.
Cost of revenue Cost of revenue for the year ended December 31, 2023 increased $3.3 million, to $57.9 million, or 6.1% compared to the year ended December 31, 2022. The increase was primarily due to the net impact of higher volumes at sustained unit costs.
Cost of revenue Cost of revenue for the year ended December 31, 2024 increased $0.3 million, to $58.1 million, or 0.4% compared to the year ended December 31, 2023. The increase was primarily due to the net impact of higher volumes at sustained unit costs.
Cash Flows The following table summarizes our consolidated cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, (in thousands) 2023 2022 Consolidated Statements of Cash Flows Data: Net cash provided by (used in) operating activities $ 26,883 $ (9,157 ) Net cash used in investing activities (2,713 ) (1,838 ) Net cash provided by (used in) financing activities (14,380 ) 63,460 Operating Activities Cash flows from operating activities result primarily from fees associated with the Biote Method and from the sale of Biote-branded dietary supplements.
Cash Flows The following table summarizes our consolidated cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, (in thousands) 2024 2023 Consolidated Statements of Cash Flows Data: Net cash provided by operating activities $ 45,243 $ 26,883 Net cash used in investing activities (18,798 ) (2,713 ) Net cash used in financing activities (76,083 ) (14,380 ) Operating Activities Cash flows from operating activities result primarily from fees associated with the Biote Method and from the sale of Biote-branded dietary supplements.
Our revenue was $185.4 million and $165.0 million, our net loss was $2.8 million and our net income was $1.3 million, and our Adjusted EBITDA was $55.3 million and $50.1 million, for the years ended December 31, 2023 and 2022, respectively.
Our revenue was $197.2 million and $185.4 million, our net income was $0.05 million and our net loss was $2.8 million, and our Adjusted EBITDA was $58.2 million and $55.3 million, for the years ended December 31, 2024 and 2023, respectively.
Net cash provided by operating activities increased $36.0 million to $26.9 million for the year ended December 31, 2023 compared to cash used by operating activities of $9.2 million for the year ended December 31, 2022.
Net cash provided by operating activities increased $18.4 million to $45.2 million for the year ended December 31, 2024 compared to cash provided by operating activities of $26.9 million for the year ended December 31, 2023.
In estimating obsolescence, we utilize information that includes projecting future demand. 68 The need for strategic inventory levels to ensure competitive delivery performance to our Biote-partnered clinics are balanced against the risk of inventory obsolescence due to clinic requirements.
The need for strategic inventory levels to ensure competitive delivery performance to our Biote-partnered clinics are balanced against the risk of inventory obsolescence due to clinic requirements.
We will remain an emerging growth company under the JOBS Act until the earliest of (i) March 4, 2026, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years. 69 Ite m 7A.
As a result, following the Business Combination, our consolidated financial statements may not be comparable to the financial statements of companies that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. 70 We will remain an emerging growth company under the JOBS Act until the earliest of (i) March 4, 2026, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years. 71 Ite m 7A.
However, the pellets are recorded as inventory on our financial statements from the date of shipment until such time as they are administered in a patient treatment as monitored and recorded in our BioTracker system as an additional service for administrative convenience of Biote-certified practitioners and Biote-partnered clinics. 60 These products have a finite life ranging from six to twelve months.
However, the bioidentical hormone pellets are recorded as inventory on our consolidated balance sheets from the date of shipment until such time as they are administered in a patient treatment as monitored and recorded in our BioTracker system as an additional service for administrative convenience of Biote-certified practitioners and Biote-partnered clinics.
We regularly assess the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 63 Results of Operations Comparison of the years ended December 31, 2023 and 2022 The table and discussion below present our results for the years ended December 31, 2023 and 2022: Year Ended December 31, (in thousands) 2023 2022 Revenue: Product revenue $ 182,573 $ 163,133 Service revenue 2,787 1,824 Total revenue 185,360 164,957 Cost of revenue Cost of products 54,246 51,990 Cost of services 3,631 2,585 Cost of revenue 57,877 54,575 Selling, general and administrative 98,826 171,104 Income (loss) from operations 28,657 (60,722 ) Other income (expense), net: Interest expense, net (6,363 ) (4,047 ) Gain (loss) from change in fair value of warrant liability (13,411 ) 5,127 Gain (loss) from change in fair value of earnout liability (8,990 ) 61,770 Loss from extinguishment of debt — (445 ) Other income (expense) (16 ) 29 Total other income (expense), net (28,780 ) 62,434 Income (loss) before provision for income taxes (123 ) 1,712 Income tax expense 2,682 388 Net income (loss) $ (2,805 ) $ 1,324 Revenue Revenue for the year ended December 31, 2023 increased $20.4 million to $185.4 million, or 12.4% compared to the year ended December 31, 2022.
We regularly assess the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 64 Results of Operations Comparison of the years ended December 31, 2024 and 2023 The table and discussion below present our results for the years ended December 31, 2024 and 2023: Year Ended December 31, (in thousands) 2024 2023 Revenue: Product revenue $ 192,240 $ 182,573 Service revenue 4,951 2,787 Total revenue 197,191 185,360 Cost of revenue Cost of products 55,087 54,246 Cost of services 3,043 3,631 Cost of revenue 58,130 57,877 Selling, general and administrative 107,450 98,826 Income from operations 31,611 28,657 Other income (expense), net: Interest expense, net (11,001 ) (6,363 ) Loss from change in fair value of warrant liability — (13,411 ) Loss from change in fair value of earnout liabilities (19,605 ) (8,990 ) Other income (expense) 11 (16 ) Total other income (expense), net (30,595 ) (28,780 ) Income (loss) before provision for income taxes 1,016 (123 ) Income tax expense 970 2,682 Net income (loss) $ 46 $ (2,805 ) Revenue Revenue for the year ended December 31, 2024 increased $11.8 million to $197.2 million, or 6.4% compared to the year ended December 31, 2023.
(6) Represents transaction costs including legal fees of $0.9 million, filing fees of $0.2 million and professional services fees of $1.0 million, each of which were incurred in connection with the filing of, and transactions contemplated by, the Company’s securities offerings.
(8) Represents transaction costs, including legal fees of $0.08 million and $0.9 million, incurred during the years ended December 31, 2024 and 2023, respectively, and for the year ended December 31, 2023, filing fees of $0.2 million and professional services fees of $1.0 million, each of which were incurred in connection with the filing of, and transactions contemplated by, our securities offerings during the years ended December 31, 2024 and 2023.
Cash flows from operating activities are affected by earnings levels and changes in working capital related to our business. Working capital varies from period to period and can be affected by changes in our inventory levels due to varying demand for our products.
Cash flows from operating activities are affected by earnings levels and changes in working capital related to our business.
We believe that the accounting policies described reflect our most critical accounting policies and estimates, which represent those that involve a significant degree of judgment and complexity. Accordingly, we believe these policies are critical in fully understanding and evaluating our reported financial condition and results of operations.
Our significant accounting policies are described in Note 2 to our consolidated financial statements. We believe that the accounting policies described reflect our most critical accounting policies and estimates, which represent those that involve a significant degree of judgment and complexity.
We assume the risk of loss due to expiration, damage or otherwise. Additionally, the products offered in our Biote-branded dietary supplement portfolio are produced by third-party manufacturers located in the United States. Biote contracts with a third-party to provide warehousing, co-packing and logistics services for our Biote-branded dietary supplements.
These products have a finite life ranging from six to twelve months. We assume the risk of loss due to expiration, damage or otherwise. Additionally, the products offered in our Biote-branded dietary supplement portfolio are produced by third-party manufacturers located in the United States.
Refer to Note 8 and Note 10 to our consolidated financial statements for a discussion of the nature and timing of our obligations under these agreements.
Contractual Obligations Our principal contractual obligations and commitments consist of obligations to pay loan principal and interest under our long-term debt agreement and obligations under our operating lease agreement. Refer to Note 10 and Note 16 to our consolidated financial statements for a discussion of the nature and timing of our obligations under these agreements.
In August 2021, we launched a direct-to-patient eCommerce platform whereby practitioners can invite their patients to buy Biote-branded dietary supplements online via our online store. The hormone pellet products used by Biote-certified practitioners are manufactured by third-party compounding pharmacies and shipped directly to Biote-certified practitioners. Custody of the pellets is with Biote-certified practitioners.
In August 2021, we launched a direct-to-patient eCommerce platform whereby practitioners can invite their patients to buy Biote-branded dietary supplements online via our online store.
Chief Financial Officer Transition On January 8, 2024, the Company appointed Robert C. Peterson as Chief Financial Officer (principal accounting and principal financial officer) of the Company. In connection with his appointment, the Company entered into an employment agreement with Mr. Peterson, dated as of January 8, 2024, which provides for Mr.
Chief Executive Officer Transition On February 1, 2025, we appointed Bret Christensen as Chief Executive Officer. In connection with his appointment, we entered into an employment agreement with Mr. Christensen, dated as of January 29, 2025 which provides for Mr.
Gain (Loss) from Change in Fair Value of Earnout Liability Gain (loss) from change in fair value of earnout liability consists of the change in fair value of the Member and Sponsor earnouts during the period.
Loss from Change in Fair Value of Earnout Liabilities Loss from change in fair value of earnout liabilities consists of the change in fair value of the earnout liability related to the Business Combination Agreement and the earnout liability related to the acquisition of Simpatra. during the period.
Throughout this section, unless otherwise noted, “Holdings” refers to BioTE Holdings, LLC and its consolidated subsidiaries. The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition.
Item 6. [Reserved]. 60 Ite m 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition.
Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
GAAP requires our management to make judgments, assumptions and estimates that affect the amounts reported in our accompanying consolidated financial statements and the accompanying notes included elsewhere in this Annual Report. Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances.
The impact of global health crises and the related disruptions caused to the global economy did not have a material impact on our business during the years ended December 31, 2023 and 2022. Additionally, the recent trends of rising inflation may also materially adversely affect our business and corresponding financial position and cash flows.
The impact of global health crises and the related disruptions caused to the global economy did not have a material impact on our business during the years ended December 31, 2024 and 2023. Additionally, inflationary factors, such as increases in the cost of our materials and supplies, interest rates and overhead costs may adversely affect our business and operating results.
As a result of this refinancing, the Company recorded a $0.5 million charge to loss from extinguishment of debt during the year ended December 31, 2022. Other Income (Expense) The change in other income (expense) for the year ended December 31, 2023 compared to the year ended December 31, 2022. primarily resulted from currency fluctuations during the period.
Other Income (Expense) The change in other income (expense) for the year ended December 31, 2024 compared to the year ended December 31, 2023. primarily resulted from currency fluctuations during the period. Income Tax Expense (Benefit) Income tax expense for the year ended December 31, 2024 decreased $1.7 million compared to the year ended December 31, 2023.
The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.
Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Our most critical accounting estimates include revenue recognition, the valuation of inventory, the valuation of stock compensation and the valuation of earnout liability.
(8) Represents professional fees of $0.6 million, consulting fees of $0.4 million and legal fees of $1.8 million all of which were associated with strategic opportunities to expand the business. 66 Liquidity and Capital Resources Our liquidity is derived primarily from available cash and cash equivalents, cash generated from operations, capacity under our revolving loans and, when necessary, debt and equity financing activities.
Liquidity and Capital Resources Our liquidity is derived primarily from available cash and cash equivalents, cash generated from operations, capacity under our revolving loans and, when necessary, debt and equity financing activities.
Components of Results of Operations Revenue We generate revenue by charging the Biote-partnered clinics fees associated with the Biote Method and from the sale of Biote-branded dietary supplements.
Additionally, the agreement provides for a future earnout payment of 194,553 shares of our Class A common stock upon achieving certain financial targets over a four-year period. Components of Results of Operations Revenue We generate revenue by charging the Biote-partnered clinics fees associated with the Biote Method and from the sale of Biote-branded dietary supplements.
These decreases were partially offset by a $5.3 million increase in employee-related expenses due to an overall increase in headcount, an increase in sales incentives consistent with sales growth for the year and an increase in severance expense.
This increase was primarily driven by a $5.0 million increase in employee-related expenses that resulted from an increase in our executive-level headcount, an increase in sales incentives consistent with sales 65 growth for the year and an increase in severance expense compared with 2023.
Off-Balance Sheet Commitments and Arrangements As of December 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K. Contractual Obligations Our principal contractual obligations and commitments consist of obligations to pay loan principal and interest under our long-term debt agreement and obligations under our operating lease agreement.
The significant assumptions used in the valuations include our stock price, volatility and the risk-free rate. Off-Balance Sheet Commitments and Arrangements As of December 31, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Investing Activities Net cash used in investing activities increased $0.9 million to $2.7 million for the year ended December 31, 2023 compared to $1.8 million for the year ended December 31, 2022, principally related to expenditures for capitalized software development costs.
Investing Activities Net cash used in investing activities increased $16.1 million to $18.8 million for the year ended December 31, 2024 compared to $2.7 million for the year ended December 31, 2023, primarily due to the use of $11.8 million in cash to acquire Asteria Health, Simpatra and BioSana in 2024.
See “Donovitz Litigation” under Item 3 Legal Proceedings in this Annual Report on Form 10-K and Note 18 to our consolidated financial statements for additional information. (4) Represents litigation expenses other than those incurred in connection with claims asserted by the Company’s former owner that are not related to the Company’s ongoing business. (5) Represents settlements of legal matters.
(5) Represents litigation expenses other than those incurred in connection with claims asserted by our former owner that are not related to our ongoing business. (6) Represents settlements of legal matters. (7) Represents the fair market value write-up of inventory accounted for under ASC 805 related to the acquisition of Asteria Health.
Peterson’s at-will employment as the Chief Financial Officer for a term commencing on January 8, 2024 and continuing until terminated by either the Company or Mr. Peterson. Samar Kamdar, the Company’s prior Chief Financial Officer, transitioned out of his role, effective immediately. On January 11, 2024, Mr.
Christensen’s at-will employment as the Chief Executive Officer for a term commencing on February 1, 2025 and continuing until terminated by either us or Mr. Christensen. Teresa S. Weber, our prior Chief Executive Officer, transitioned out of her role, effective February 1, 2025. On January 30, 2025, Ms. Weber entered into a consulting agreement with us, which provides that Ms.
Additionally, outsourced professional services fees increased $6.0 million, primarily due to an increase in legal expenses related to litigation costs incurred to defend the Company against claims asserted by the Company’s former owner (see “Donovitz Litigation” under Item 3 Legal Proceedings in this Annual Report on Form 10-K and Note 18 to our consolidated financial statements for 64 additional information).
Legal settlement expenses increased $4.0 million in 2024 principally due to the execution of a settlement agreement with Carie Boyd (see “Right Value Litigation” under Part I, Item 3. Legal Proceedings in this Annual Report on Form 10-K and Note 20 to our consolidated financial statements for additional information).
Interest Expense, Net Interest expense, net for the year ended December 31, 2023 increased $2.3 million to $6.4 million, or 57.2%, compared to the year ended December 31, 2022. The increase was primarily a result of higher interest rates incurred during the period, partially offset by interest income earned on our money market account and no matured short-term investment.
The increase was primarily the result of $2.6 million in accreted interest related to our share repurchase liability, higher interest rates on our Term Loan during 2024 and interest incurred on borrowings under our Revolving Loans. These increases were partially offset by interest income earned on our money market account in 2024.
Income Tax Expense (Benefit) Income tax expense for the year ended December 31, 2023 increased $2.3 million compared to the year ended December 31, 2022.
Interest Expense, Net Interest expense, net for the year ended December 31, 2024 increased $4.6 million to $11.0 million, or 72.9%, compared to the year ended December 31, 2023.
For the year ended December 31, 2022, this amount represents transaction costs including professional services fees of $4.0 million, legal fees of $4.8 million, consulting fees of $0.2 million, filing fees of $0.4 million, share redemption costs of $7.2 million and transaction bonuses of $4.2 million, each of which were incurred in connection with the Business Combination that occurred during the year ended December 31, 2022.
(10) Represents professional fees of $0.3 million and $0.6 million and legal fees of $0.7 million and $1.8 million incurred during the years ended December 31, 2024 and 2023, respectively and consulting fees of $0.4 million incurred during the year ended December 31, 2023, all of which were associated with strategic opportunities to expand the business.
Additionally, there was an increase in both trocar and shipping and freight costs of $0.7 million and $0.2 million, respectively. Selling, General and Administrative Selling, general and administrative expense for the year ended December 31, 2023 decreased $72.3 million to $98.8 million, or (42.2%), compared to the year ended December 31, 2022.
Selling, General and Administrative Selling, general and administrative expense for the year ended December 31, 2024 increased $8.6 million to $107.5 million, or 8.7%, compared to the year ended December 31, 2023.
Furthermore, during the year ended December 31, 2023, the Company entered into a $1.2 million legal settlement with a former employee. Marketing expenses increased $1.9 million due to an increase in web-based marketing and the production of informational materials in an ongoing effort to increase awareness of the products and services offered by Biote-certified practitioners.
Additionally, in 2024 we incurred expenses related to our first annual marketing event for Biote-certified providers since the onset of the COVID-19 pandemic of $0.8 million and other marketing-related expenses increased $0.8 million in 2024 due to an increase in web-based marketing in an ongoing effort to increase awareness of the products and services offered by Biote-certified practitioners, compared with 2023.
The significant assumptions used in the valuation include the constant risk-free rate, constant volatility factor and the Geometric Brownian Motion. Earnout Liability Our earnout liability was valued using a Monte-Carlo simulation in order to simulate the future path of our stock price over the earnout period.
Earnout Liabilities Our earnout liabilities were valued using a Monte-Carlo simulation in order to simulate the future path of our stock price over the earnout period. The carrying amount of the liabilities may fluctuate significantly and actual amounts paid may be materially different from the liabilities’ estimated value.
Removed
Item 6. [Reserved]. 59 Ite m 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Added
Actual results may differ materially from those contained in any forward-looking statements. Overview Biote trains physicians and nurse practitioners in hormone optimization using bioidentical hormone replacement pellet therapy in men and women experiencing hormonal imbalance.
Removed
Unless the context otherwise requires, all references in this section to the “Company,” “Biote,” “we,” “us”, or “our” refer to the business of the “BioTE Companies” prior to the business combination and to biote Corp. and its subsidiaries from and following the Business Combination in the present tense.
Added
A majority of the bioidentical hormone pellets used by Biote-certified practitioners are manufactured by our 503B compounding pharmacy: however, in order to meet demand we have agreements with AnazaoHealth (AnazaoHealth Pharmacy Services Agreement) and Carie Boyd (Outsourcing Facility Services Agreement) each of which are FDA registered 503B outsourcing facilities. Bioidentical hormone pellets are shipped directly to Biote-certified practitioners.
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Actual results may differ materially from those contained in any forward-looking statements. Overview We operate a high growth practice-building business within the hormone optimization space. Similar to a franchise model, we provide the necessary components to enable Biote-certified practitioners to establish, build, and successfully implement a program designed to optimize hormone levels using personalized solutions for their aging patient populations.
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Custody of the bioidentical hormone pellets is with Biote-certified practitioners.
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As such our consolidated balance sheets as of December 31, 2023 and December 31, 2022 reflect inventories relating to these items.
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Biote contracts with a third-party to provide warehousing, co-packing and logistics services for our Biote-branded dietary supplements. 61 To strengthen control over our supply chain, enhance operational efficiency and reduce production costs, we are focused on vertical integration through strategic transactions. For example, in March 2024, we acquired Asteria Health, a 503B manufacturer of compounded bioidentical hormones.
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Inflationary factors, such as increases in the cost of our clinical trial materials and supplies, interest rates and overhead costs may adversely affect our operating results.
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As part of the integration process associated with this strategic transaction, we are narrowing our current vendor network to better manage our supply chain.
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Kamdar entered into an executive transition agreement with the Company, which provided that Mr. Kamdar would remain employed by the Company through February 29, 2024, to assist with the transition and work on special projects.
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On November 1, 2024, AnazaoHealth provided notice that it was exercising its right to terminate the Pharmacy Services Agreement (the “AnazaoHealth Pharmacy Services Agreement”), which we previously entered into on October 30, 2020, with such termination to be effective as of May 1, 2025.
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Business Combination On May 26, 2022 (the “Closing Date”), BioTE Holdings, LLC (“Holdings,” inclusive of its direct and indirect subsidiaries, the “BioTE Companies,” and as to its members, the “Members”) completed a series of transactions (the “Business Combination”) with Haymaker Acquisition Corp. III (“Haymaker”), Haymaker Sponsor III LLC (the “Sponsor”), BioTE Management, LLC, Dr. Gary S.
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While there is no guarantee that we will be able to negotiate a new agreement with AnazaoHealth and continue our partnership following such notice of termination on terms that are acceptable to us, if at all, we believe we can continue to meet the product demands of our Biote-practitioners through our existing direct manufacturing capabilities and vendor network while continuing to expand our vertical integration.
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Donovitz, in his individual capacity, and Teresa S. Weber, in her capacity as the Members’ representative (in such capacity, the “Members’ Representative”) pursuant to the business combination agreement (the “Business Combination Agreement”) dated December 13, 2021. The Business Combination was accounted for as a common control transaction, in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
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Revenue generated from individual Biote-partnered clinics varies significantly. This variability is due to many factors, including: tenure of its practitioners as Biote-certified practitioners; the number of certified practitioners in an individual clinic; the number of patients served by a clinic; the clinic’s patient demographics; and the clinic’s geographic location and population density.
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Under this method of accounting, Haymaker’s acquisition of the BioTE Companies was accounted for at their historical carrying values, and the BioTE Companies were deemed the predecessor entity.
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Weber will serve as a strategic advisor to us and our Board of Directors for up to one year, to assist with the transition and to work on special projects. Acquisitions On March 18, 2024, we acquired Asteria Health, a privately held 503B manufacturer of compounded bioidentical hormones.
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This method of accounting is similar to a reverse recapitalization whereby the Business Combination was treated as the equivalent of the BioTE Companies issuing stock for the net assets of Haymaker, accompanied by a recapitalization. The net assets of Haymaker are stated at historical cost, with no goodwill or other intangible assets recorded.
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The total consideration of $9.0 million consisted of $8.5 million in cash payments and an additional $0.5 million cash earnout payment that was contingent on meeting certain operating metrics. On January 29, 2024, we executed an asset purchase agreement with BioSana ID LLC (“BioSana”) to purchase certain assets for cash consideration of $0.7 million.
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Operations prior to the Business Combination are those of the BioTE Companies.
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