biote Corp
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
BTMD$1.06+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0000950170-24-057713
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000950170-24-094529
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 116 previous paragraphs and 130 current paragraphs.
94 unchanged; 18 reworded; 13 added; 3 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Income tax expense for the three months ended June 30, 2024 decreased $0.7 million, compared to the three months ended June 30, 2023. This decrease in expense was primarily driven by a decrease in the forecasted annual tax rate of approximately 6.9% for the fiscal year ended December 31, 2024.
Current report
Revenue
Current report
Cost of revenue
Current report
Cost of revenue for the six months ended June 30, 2024 decreased $1.1 million, to $28.7 million, or (3.5%), compared to the six months ended June 30, 2023. Cost of Biote-branded dietary supplements decreased $3.3 million for the period primarily due to the decrease in Biote-branded dietary supplement sales, compared with the corresponding period of the prior year. This decrease in cost of revenue was partially offset by a $1.4 million increase in cost of pellet procedures, which was driven by the increase in revenue, compared to the six months ended June 30, 2023.
Current report
Selling, General and Administrative
Current report
Selling, general and administrative expense for the six months ended June 30, 2024 increased $1.8 million to $50.7 million, or 3.7%, compared to the six months ended June 30, 2023. This increase was primarily due to a $2.0 million increase in payroll and related expenses that was driven by an increase in the Company’s executive-level headcount and expenses related to the Company’s first annual marketing event for Biote-certified practitioners since the onset of the COVID-19 pandemic of $1.0 million, compared with the corresponding period of the prior year. Marketing expenses increased $0.4 million during the six months ended June 30, 2024 due to an increase in web-based marketing and the production of informational materials in the ongoing effort to increase awareness of the products and services offered by Biote-certified practitioners compared to the six months ended June 30, 2023. Additionally, during the six months ended June 30, 2024, amortization expense increased $0.7 million compared to the six months ended June 30, 2023, due to the addition of intangible assets acquired during the first quarter of 2024. These increases were partially offset by a $1.2 million decrease in legal expenses as a result of settling the Donovitz Litigation during the six months ended June 30, 2024 and the completion of the acquisitions during the first quarter of 2024, compared to the six months ended June 30, 2023. Additionally, during the six months ended June 30, 2024, expenses related to outsourced professional services decreased $0.8 million due to a decrease in consulting service fees and travel related expenses decreased $0.4 million compared to the three months ended June 30, 2023.
Current report
Interest expense, net for the six months ended June 30, 2024 increased $0.9 million to $4.2 million compared to the six months ended June 30, 2023. The increase was primarily a result of $0.5 million in accreted interest related to our share repurchase liability, higher interest rates on our Term Loan during the period and a decrease in interest income earned on our money market account.
Current report
Other Income (Expense)
Current report
Income Tax Expense (Benefit)
Current report
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. For the three and six months ended June 30, 2024, interest expense, net included $0.5 million of accreted interest related to the share repurchase liability.
Current report
Represents depreciation expense on property and equipment, amortization expense on capitalized software and amortization expense on purchased intangible assets. Depreciation expense of $0.01 million was included in cost of products for the three and six months ended June 30, 2024.
Current report
Represents the fair market value write-up of inventory accounted for under ASC 805 related to the acquisition of Asteria Health.
Current report
Net cash provided by operating activities for the six months ended June 30, 2024 decreased $2.4 million to $17.3 million compared to cash provided by operating activities of $19.8 million for the six months ended June 30, 2023. Our cash flow from working capital for the six months ended June 30, 2024, was impacted by a $0.3 million increase in Biote-branded dietary supplement inventory, compared with a $4.2 million decrease in Biote-branded dietary supplement inventory during the six months ended June 30, 2023. Additionally, in March 2024 we acquired Asteria Health, resulting in a $0.6 million increase in pellets in process and raw material used in the production of our pellets for the six months ended June 30, 2024. Further, due to the settlement of the Donovitz Litigation, legal and other related accrued liabilities decreased approximately $1.0 million compared to the six months ended June 30, 2023. During the six months ended June 30, 2024, we made investments in key sales and marketing initiatives, including our annual marketing event for Biote-certified practitioners, which impacted cash from working capital by $0.8 million, compared to the six months ended June 30, 2023. Cash used by these activities during the six months ended June 30, 2024 was partially offset by a $2.7 million reduction in cash used for advances on future inventory purchases, compared with the six months ended June 30, 2023.
Removed paragraphs (3)
Previous report
Interest Expense, Net
Previous report
Interest Expense, Net
Previous report
Net cash provided by operating activities for the three months ended March 31, 2024 decreased $5.6 million to $7.4 million compared to cash provided by operating activities of $13.0 million for the three months ended March 31, 2023. Our cash flow from working capital for the three months ended March 31, 2024, was impacted by a slight decrease in our dietary supplement inventory of $0.2 million for the three months ended March 31, 2024 compared with a $1.8 million decrease for the three months ended March 31, 2023. Additionally, because the Company paid annual 2023 bonuses to employees in March 2024, compared to paying 2022 annual bonuses in April 2023, accrued expenses decreased during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Reworded paragraphs (18)
Previous wording
Our revenue was $46.8 million and $44.8 million, our net loss was $5.8 million and $21.4 million, and our Adjusted EBITDA was $14.2 million and $13.1 million, for the three months ended March 31, 2024 and 2023, respectively. Please refer to “Non-GAAP Measures” below for reconciliations of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss and for additional information about Adjusted EBITDA.
Current wording
Our revenue was $96.0 million and $94.1 million, our net loss was $16.3 million and $34.5 million, and our Adjusted EBITDA was $26.9 million and $27.6 million, for the six months ended June 30, 2024 and 2023, respectively. Please refer to “Non-GAAP Measures” below for reconciliations of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss and for additional information about Adjusted EBITDA.
Previous wording
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. If these conditions persist and deepen, we could experience an inability to access additional capital or our liquidity could otherwise be impacted. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or additional market corrections resulting from the impact of the effects of global health crises, such as the COVID-19 pandemic, or geopolitical turmoil, such as the Israel-Hamas war, could materially affect our business and the value of our securities. 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 three months ended March 31, 2024 and 2023.
Current wording
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. If these conditions persist and deepen, we could experience an inability to access additional capital or our liquidity could otherwise be impacted. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or additional market corrections resulting from the impact of the effects of global health crises, such as the COVID-19 pandemic, or geopolitical turmoil, such as the Israel-Hamas war, could materially affect our business and the value of our securities. 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 three and six months ended June 30, 2024 and 2023.
Previous wording
Interest expense 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 short-term investment.
Current wording
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 liability, net of interest income earned on our money market account and short-term investment.
Previous wording
Gain (loss) from change in fair value of warrant liability consists of the change in fair value of the warrant liability during the period.
Current wording
Loss from change in fair value of warrant liability consists of the change in fair value of the warrant liability during the period.
Previous wording
Revenue for the three months ended March 31, 2024 increased $2.0 million to $46.8 million, or 4.4%, compared to the three months ended March 31, 2023, which was primarily driven by a $2.3 million increase in revenue from pellet procedures, partially offset by a $0.9 million decrease in Biote-branded dietary supplements. Furthermore, service revenue increased 11.8% during the three months ended March 31, 2024, compared with the corresponding period of the prior year, primarily as a result of technology fees earned from physician orders placed through our new platform, BioteRx, partially offset by a reduction in training revenue during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.
Current wording
Revenue for the three months ended June 30, 2024 decreased $0.1 million to $49.2 million, or 0.2%, compared to the three months ended June 30, 2023, which was primarily driven by a $3.9 million decrease in Biote-branded dietary supplements, offset by a $2.8 million increase in revenue from pellet procedures. Furthermore, service revenue increased 74.9% during the three months ended June 30, 2024, compared with the corresponding period of the prior year, primarily as a result of technology fees earned from physician orders placed through our new platform, BioteRx and an increase in training revenue during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Previous wording
Cost of revenue for the three months ended March 31, 2024 decreased $0.5 million, to $13.4 million, or (3.7%), compared to the three months ended March 31, 2023. Cost of Biote branded dietary supplements decreased $1.1 million for the period as a result of a change in suppliers during the last half of 2023. This decrease in cost of revenue was partially offset by a $0.5 million increase in cost of pellet procedures, which was driven by the increase in revenue.
Current wording
Cost of revenue for the three months ended June 30, 2024 decreased $0.5 million, to $15.3 million, or (3.4%), compared to the three months ended June 30, 2023. Cost of Biote branded dietary supplements decreased $2.2 million for the period primarily as a result of the decrease in Biote-branded dietary supplement revenue, compared with the corresponding period of the prior year. This decrease in cost of revenue was partially offset by a $0.8 million increase in cost of pellet procedures, which was driven by an increase in pellet procedure revenue, compared to the three months ended June 30, 2023.
Previous wording
Selling, general and administrative expense for the three months ended March 31, 2024 decreased $0.1 million to $23.0 million, or 0.3%, compared to the three months ended March 31, 2023. This increase was primarily due to a $0.6 million increase in payroll and related expenses that was driven by an increase in the Company’s executive-level headcount, compared with the corresponding period of the prior year. Additionally, during the three months ended March 31, 2024, general operating expenses increased $0.3 million, compared with the three months ended March 31, 2023, due to an increase in merchant fees related to the increase in revenue and an increase in bad debt expense as a result of the Company’s adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments. During the three months ended March 31, 2024, legal fees increased $0.4 million, compared with the three months ended March 31, 2023, which was primarily driven by legal expenses incurred to acquire Asteria Health, Simpatra and BioSana and litigation expenses incurred to defend the Company against claims asserted by the Company’s former owner. These increases were partially offset by a $1.1 million decrease in expenses related to a legal settlement with a former employee that occurred in the three months ended March 31, 2023.
Current wording
Selling, general and administrative expense for the three months ended June 30, 2024 increased $1.9 million to $27.6 million, or 7.3%, compared to the three months ended June 30, 2023. This increase was primarily due to a $1.4 million increase in payroll and related expenses that was driven by an increase in the Company’s executive-level headcount and expenses related to its first annual marketing event for Biote-certified practitioners since the onset of the COVID-19 pandemic of $1.3 million, compared with the corresponding period of the prior year. Additionally, during the three months ended June 30, 2024, amortization expense increased $0.4 million compared to the three months ended June 30, 2023, due to the addition of intangible assets acquired during the first quarter of 2024. These increases were partially offset by a $1.1 million decrease in legal expenses as a result of settling the Donovitz Litigation during the three months ended June 30, 2024. Additionally, during the three months ended June 30, 2024, expenses related to outsourced professional services decreased $0.7 million due to a decrease in consulting service fees and travel related expenses decreased $0.3 million compared to the three months ended June 30, 2023.
Previous wording
Interest expense, net for the three months ended March 31, 2024, remained flat compared to the three months ended March 31, 2023. The immaterial increase was primarily a result of higher interest rates incurred during the period, partially offset by interest income earned on our money market account.
Current wording
Interest expense, net for the three months ended June 30, 2024, increased $0.9 million to $2.6 million compared to the three months ended June 30, 2023. The increase was primarily a result of $0.5 million in accreted interest related to our share repurchase liability, higher interest rates on our Term Loan during the period and a decrease in interest income earned on our money market account.
Previous wording
The loss recognized from change in fair value of the earnout liability was primarily due to the change in the closing price of our Class A common stock during the three months ended March 31, 2024 and 2023. For the three months ended March 31, 2024, the closing price of the Company’s Class A common stock increased 17.0%, compared with an increase of 66.0% in the corresponding period of 2023. The increase in the closing price of our Class A common stock for the three months ended March 31, 2023 outpaced the increase in the closing price of our Class A common stock for the three months ended March 31, 2024, resulting in a decrease in the loss from change in the fair value of the earnout liability during the 2024 period.
Current wording
The loss recognized from change in fair value of the earnout liability was primarily due to the change in the closing price of our Class A common stock during the three months ended June 30, 2024 and 2023. For the three months ended June 30, 2024, the closing price of the Company’s Class A common stock increased 28.8%, compared with an increase of 9.2% in the corresponding period of 2023. The increase in the closing price of our Class A common stock for the three months ended June 30, 2023 outpaced the increase in the closing price of our Class A common stock for the three months ended June 30, 2024, resulting in a decrease in the loss from change in the fair value of the earnout liability during the 2024 period.
Previous wording
Loss from Change in Fair Value of Warrant Liability
Current wording
Loss from Change in Fair Value of Earnout Liability,
Previous wording
Income tax expense for the three months ended March 31, 2024 increased $1.9 million, compared to the three months ended March 31, 2023. This increase in expense was primarily driven by an increase in forecasted taxable income for fiscal 2024 compared to fiscal 2023. The increase in tax expense was also attributable to the increase in Biote’s ownership of Holdings as of March 31, 2024 compared to March 31, 2023.
Current wording
Income tax expense for the six months ended June 30, 2024 increased $1.1 million, compared to the six months ended June 30, 2023. The increase in tax expense was primarily attributable to the increase in Biote’s ownership of Holdings as of June 30, 2024 compared to June 30, 2023. This increase in expense was partially offset by a decrease in the forecasted annual tax rate of approximately 6.9% for the fiscal year ended December 31, 2024.
Previous wording
The following is a reconciliation of net loss to Adjusted EBITDA (in thousands) for the three months ended March 31, 2024 and 2023:
Current wording
The following is a reconciliation of net loss to Adjusted EBITDA (in thousands) for the three and six months ended June 30, 2024 and 2023:
Previous wording
Represents transaction costs including legal fees of $0.04 million during the three months ended March 31, 2024, and legal fees of $0.3 million and professional services fees of $0.02 million for the three months ended March 31, 2023, each of which were incurred in connection with the filing of, and transactions contemplated by, the Company’s securities offerings.
Current wording
Represents transaction costs including legal fees of $0.04 million during the six months ended June 30, 2024, and professional services fees of $0.9 million and legal fees of $0.5 million during the three months ended June 30, 2023 and professional services fees of $0.9 million and legal fees of $0.8 million for the six months ended June 30, 2023 that were incurred in connection with the filing of, and transactions contemplated by, the Company’s securities offerings.
Previous wording
Represents executive severance costs of $0.08 million and a realized foreign currency loss of less than $0.01 for the three months ended March 31, 2024. For the three months ended March 31, 2023, the amount represents executive severance costs of $0.06 million, costs related to recruiting executive level management, including the Chief Commercial Officer of $0.03 million, professional services fees of $0.09 million and legal fees of $0.08 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 $0.01 million.
Current wording
Represents professional services fees of $0.1 million incurred related to the accounting treatment of the share repurchase liability, strategic consulting and advisory services of $0.5 million, executive severance costs of $0.3 million and a realized foreign currency loss of less than $0.01 million for each of the three and six months ended June 30, 2024, and professional services fees of $0.05 million associated with the restatement of the Company’s financial statements for the quarters ended June 30, 2022 and September 30, 2022, executive severance costs of $0.2 million, costs related to recruiting executive level management, including the Chief Commercial Officer of $0.1 million and a realized foreign currency gain of less than $0.01 million for the three months ended June 30, 2023 and professional services fees of $0.1 million and legal 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, executive severance costs of $0.2 million and costs related to recruiting executive level management, including the Chief Commercial Officer of $0.2 million and a realized foreign currency loss of $0.01 million for the six months ended June 30, 2023.
Previous wording
Represents legal fees of $0.4 million and professional services fees of $0.1 million incurred during the three months ended March 31, 2024 related to our recent acquisitions. For the three months ended March 31, 2023, the amount represents legal fees of $0.02 million associated with strategic opportunities to expand the business.
Current wording
Represents legal fees of $0.2 million and $0.5 million and professional services fees of $0.2 million and $0.3 million incurred during the three and six months ended June 30, 2024, respectively, related to our recent acquisitions and other strategic opportunities. For the three and six months ended June 30, 2023, the amount represents professional services fees of $0.1 million and legal fees of $0.05 million associated with strategic opportunities to expand the business.
Previous wording
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. 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 March 31, 2024 and December 31, 2023, we had cash and cash equivalents of $78.8 million and $89.0 million, respectively. Additionally, as of both March 31, 2024 and December 31, 2023, we had $50.0 million of Revolving Loans available under our Truist Credit Agreement.
Current wording
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. 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 June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $26.4 million and $89.0 million, respectively. Additionally, as of June 30, 2024 and December 31, 2023, we had $40.0 million and $50.0 million, respectively, of Revolving Loans available under our Truist Credit Agreement.
Previous wording
Net cash used in investing activities increased $11.8 million to $12.2 million for the three months ended March 31, 2024, compared to $0.4 million for the three months ended March 31, 2023. This increase was principally driven by the acquisition of Asteria Health, Simpatra and BioSana.
Current wording
Net cash used in investing activities decreased $5.7 million to $15.5 million for the six months ended June 30, 2024, compared to $21.2 million for the six months ended June 30, 2023. This decrease was principally driven by the maturity of a $20.0 million short- term investment that was purchased in 2023 and not replaced with a new investment in 2024, partially offset by the acquisition of Asteria Health, Simpatra and BioSana during the six months ended June 30, 2024.
Previous wording
Net cash used in financing activities increased $1.2 million to $5.4 million for the three months ended March 31, 2024, compared to $4.2 million for the three months ended March 31, 2023. The increase in our cash flow used in financing activities was primary driven by the repurchase of $4.1 million of our Class A common stock during the three months ended March 31, 2024. This increase was partially offset by a $3.0 million reduction in distributions to our partners during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.
Current wording
Net cash used in financing activities increased $55.1 million to $64.4 million for the six months ended June 30, 2024, compared to $9.3 million for the six months ended June 30, 2023. The increase in our cash flow used in financing activities was primary driven by a $62.2 million payment on our share repurchase liability that we recorded related to the settlement of the Donovitz Litigation and the June 5, 2024 Litigation. Additionally we used cash of $5.6 million to repurchase Class A common stock during the six months ended June 30, 2024. This increase was partially offset by a $10.0 million draw under our Revolving Loans, which was used to fund a portion of the $62.2 million payment on the share repurchase liability and a $2.4 million reduction in distributions to our partners during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
The table and discussion below present our results for the six months ended June 30, 2024:
Current report — wording carried from elsewhere
Revenue for the six months ended June 30, 2024 increased $1.9 million to $96.0 million, or 2.0%, compared to the six months ended June 30, 2023, which was primarily driven by a $5.1 million increase in revenue from pellet procedures, partially offset by a 23.7% decrease in Biote-branded dietary supplements. Furthermore, service revenue increased 41.3% during the six months ended June 30, 2024, compared with the corresponding period of the prior year, primarily as a result of technology fees earned from physician orders placed through our new platform, BioteRx, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Current report — wording carried from elsewhere
The change in the loss from change in fair value of warrant liability was due to the Company’s offer to exchange its outstanding warrants for common stock. 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. As a result of the tender offer in the second quarter of 2023, the Company exchanged all of its outstanding warrants for Class A common stock; therefore, no warrants remained outstanding subsequent to June 30, 2023.
Current report — wording carried from elsewhere
The loss recognized from change in fair value of the earnout liability was primarily due to the change in the closing price of our Class A common stock during the six months ended June 30, 2024 and 2023. For the six months ended June 30, 2024, the closing price of the Company’s Class A common stock increased 51.2%, compared with an increase of 81.2% in the corresponding period of 2023. The increase in the closing price of our Class A common stock for the six months ended June 30, 2023 outpaced the increase in the closing price of our Class A common stock for the six months ended June 30, 2024, resulting in a decrease in the loss from change in the fair value of the earnout liability during the 2024 period.
Current report — wording carried from elsewhere
The change in other income (expense) for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily resulted from foreign currency fluctuations during the period.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Loss from Change in Fair Value of Warrant Liability