biote Corp.

Previous wording

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. You should read this discussion and analysis in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Certain amounts may not foot due to rounding. This discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those discussed in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and Part I, Item 1A. “Risk Factors” in the 2023 Form 10-K. We assume no obligation to update any of these forward-looking statements except as required by law. Actual results may differ materially from those contained in any forward-looking statements.

Current wording

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. You should read this discussion and analysis in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Certain amounts may not foot due to rounding. This discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those discussed in Part I, Item 1A. “Risk Factors” in the 2024 Form 10-K, as supplemented by the risks and uncertainties discussed in Part II. Item 1A. “Risk Factors” in this Quarterly Report. You should carefully read the information under “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report. We assume no obligation to update any of these forward-looking statements except as required by law. Actual results may differ materially from those contained in any forward-looking statements.

Previous wording

We operate a high growth practice-building business within the therapeutic wellness and 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. The Biote Method (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 therapeutic wellness and hormone optimization space: Biote Method education, training and certification, practice management software, inventory management software, and information regarding available hormone replacement therapy (“HRT”) products, as well as digital and point-of-care marketing support. We also sell a complementary Biote-branded line of dietary supplements. We generate revenue by charging fees associated with the support Biote provides for HRT to the Biote-partnered clinics and from the sale of Biote-branded 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.

Current wording

Biote trains physicians and nurse practitioners in hormone optimization using bioidentical hormone replacement pellet therapy in men and women experiencing hormonal imbalance. 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. 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.

Previous wording

Increasing sales of Biote-branded dietary supplements. Our Biote-branded dietary supplement line currently includes 22 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 direct-to-patient eCommerce platform enables practitioners to invite their patients to buy Biote-branded dietary supplements online via our online store.

Current wording

Increasing sales of Biote-branded dietary supplements. 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. Our direct-to-patient eCommerce platform enables practitioners to invite their patients to buy Biote-branded dietary supplements online via our online store.

Previous wording

A majority of the hormone pellet products used by Biote-certified practitioners are manufactured by our 503B compounding pharmacy as well as by third-party compounding pharmacies and shipped directly to Biote-certified practitioners. Custody of the pellets is with Biote-certified practitioners. 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.

Current wording

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 and Carie Boyd each of which are FDA registered 503B outsourcing facilities. Bioidentical hormone pellets are shipped directly to Biote-certified practitioners. Custody of the pellets is with Biote-certified practitioners. However, the bioidentical hormone pellets are recorded as inventory on our unaudited condensed consolidated balance sheets from the date of shipment until the point in time they are dispensed by a Biote-certified practitioner. Biote-certified practitioners record the dispensation of bioidentical hormone pellets and monitor inventory levels in our BioTracker system, an inventory management system that is offered as part of the Biote Method.

Previous wording

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. We contract with a third party to provide warehousing, co-packing and logistics services for our Biote-branded dietary supplements.

Current wording

Bioidentical hormone pellets 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. We contract with a third party to provide warehousing, co-packing and logistics services for our Biote-branded dietary supplements.

Previous wording

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 January 2024, we completed an asset acquisition of Simpatra, LLC (“Simpatra”), in which we purchased certain intellectual property and intellectual property rights for a purchase price of (i) $1.5 million in cash, (ii) 291,829 shares of our Class A common stock and (iii) a future earnout payment of 194,553 shares of our Class A common stock upon achieving certain financial targets over a four-year period. Additionally, in January 2024 we reached an agreement with BioSana ID LLC (“BioSana”) to purchase certain assets for a purchase price of (i) $0.7 million in cash and (ii) a future earnout payment of up to $0.1 million upon the achievement of certain operating metrics. Further, in March 2024, we acquired F.H. Investments, Inc. d/b/a Asteria Health (“Asteria Health”), a 503B manufacturer of compounded bioidentical hormones, for a purchase price of (i) $8.4 million in cash and (ii) a future earnout payment of up to $0.5 million upon the achievement of certain operating metrics. As part of the integration process associated with these strategic transactions, we are narrowing our current vendor network to better manage our supply chain. 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. 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.

Current wording

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. As part of the integration process associated with this strategic transaction, we are narrowing our current vendor network to better manage our supply chain. 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. 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.

Previous wording

Our revenue was $51.4 million and $45.6 million, our net income was $12.7 million and $19.6 million, and our Adjusted EBITDA was $16.2 million and $14.0 million, for the three months ended September 30, 2024 and 2023, respectively. Our revenue was $147.4 million and $139.7 million, our net loss was $3.4 million and $14.9 million and our Adjusted EBITDA was $43.1 million and $41.7 million, for the nine months ended September 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.

Current wording

Our revenue was $49.0 million and $46.8 million, our net income (loss) was $15.8 million and $(5.7) million and our Adjusted EBITDA was $13.8 million and $14.2 million, for the three months ended March 31, 2025 and 2024, 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 conflicts in the Middle East, 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 nine months ended September 30, 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, uncertainties associated with the changes to and by the U.S. federal government 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 or geopolitical turmoil, 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, 2025 and 2024. Additionally, we continue to monitor ongoing changes to global trade policies, including the imposition of tariffs. The broader economic impact of these policies is uncertain, and while we may experience additional operational expenses related to the costs of obtaining materials, we do not expect to be materially impacted.

Previous wording

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. 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. 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 conflicts in the Middle East, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Current wording

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. 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. 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.

Previous wording

Substantially all of our revenue originates from sales to clinic locations in the United States.

Current wording

Substantially all of our revenue originates from sales to clinics located in the United States.

Previous wording

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. The master services agreements (“MSAs”) we enter into with Biote-partnered clinics contain tiered pricing provisions for the management fees. These provisions provide for decreasing management fees owed to us based on the number of new patients treated. This can result in declines in revenue we realize from management fees from existing Biote-partnered clinics unless these are offset by revenue generated from newly acquired Biote-partnered clinics which begin at higher fee levels under the MSA.

Current wording

Revenue generated from individual Biote-partnered clinics varies significantly due to many factors, including but not limited to, the tenure of 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. The MSAs we enter into with Biote-partnered clinics contain tiered pricing provisions for the management fees. These provisions provide for decreasing management fees owed to us based on the number of new patients treated. This can result in declines in revenue we realize from management fees from existing Biote-partnered clinics unless these are offset by revenue generated from new Biote-partnered clinics which begin at higher fee levels under the MSA.

Previous wording

Product revenue includes both pellets, in connection with the service described above, and the related inventory management services provided to clinics. Product revenue is recognized at the point in time when the clinic obtains ownership of the pellet, which we determined to be when the Biote-certified practitioner performs the procedure to implant the pellet into their patient. The consideration allocated to this performance obligation is a procedure-based service fee which we refer to as procedure revenue. Our product revenue also includes revenue earned from sales of pellet insertion kits and Biote-branded dietary supplements. Revenue from the sale of pellet insertion kits and Biote-branded dietary supplements is recognized when the clinic or clinic’s patient (supplements only) obtains control of the product and is generally at the time of shipment from our distribution facility or supplier. Any shipping or handling fees paid by clinics are also recorded within product revenue.

Current wording

Product revenue includes both bioidentical hormone pellets, in connection with the service described above, and the related inventory and practice management services provided to clinics. Product revenue is recognized at the point in time when the Biote-partnered clinic obtains ownership of the bioidentical hormone pellet, which we determined to be when the Biote-certified practitioner performs the procedure to implant the bioidentical hormone pellet into their patient. The consideration allocated to this performance obligation is a procedure-based service fee which we refer to as procedure revenue. Our product revenue also includes revenue earned from sales of pellet insertion kits and Biote-branded dietary supplements. Revenue from the sale of pellet insertion kits and Biote-branded dietary supplements is recognized when the clinic or clinic’s patient (supplements only) obtains control of the product, which generally occurs at the time of shipment from our third-party distribution facility or supplier. Any shipping or handling fees paid by clinics are also recorded within product revenue.

Previous wording

Service revenue is revenue earned from fees paid by Biote-partnered clinics for training services and other contract term services pursuant to our MSAs. 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.

Current wording

Service revenue is revenue earned from fees paid by Biote-partnered clinics for Biote Method education, training and certification services and other contract term services pursuant to our MSAs. 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.

Previous wording

Cost of service revenue consists primarily of costs incurred to deliver trainings to Biote-partnered clinics. Cost of product revenues include the pass-through cost of pellets purchased from outsourcing facilities, the cost of pellet insertion kits and Biote-branded dietary supplements purchased from manufacturing facilities, and the shipping and handling costs incurred to deliver these products to Biote-partnered clinics.

Current wording

Cost of product revenues include the pass-through cost of bioidentical hormone pellets purchased from outsourcing facilities, the cost of pellet insertion kits and Biote-branded dietary supplements purchased from manufacturing facilities, and the shipping and handling costs incurred to deliver these products to Biote-partnered clinics. Cost of service revenue consists primarily of costs incurred to deliver trainings to Biote-partnered clinics.

Previous 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.

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.

Previous wording

Other income and other expense consist of the foreign currency exchange gains and losses for sales denominated in foreign currencies and other income or payments not appropriately classified as operating expenses.

Current wording

Other expense consists of the foreign currency exchange losses for sales denominated in foreign currencies and other expenses not appropriately classified as operating expenses.

Previous wording

Cost of revenue for the three months ended September 30, 2024 increased $1.0 million, to $15.2 million, or 7.1%, compared to the three months ended September 30, 2023. Cost of Biote branded dietary supplements increased $1.1 million for the period primarily as a result of the increase in Biote-branded dietary supplement revenue, compared with the corresponding period of the prior year.

Current wording

Cost of revenue for the three months ended March 31, 2025 decreased $0.8 million, to $12.6 million, or 6.3%, compared to the three months ended March 31, 2024. Cost of pellet procedures decreased 24.7% while revenue from pellet procedures decreased 3.6%, reflecting continued cost savings from the vertical integration of Asteria Health compared to the three months ended March 31, 2024. Cost of Biote branded dietary supplements increased $0.7 million for the three months ended March 31, 2025 primarily as a result of the increase in Biote-branded dietary supplement revenue, compared to the three months ended March 31, 2024.

Previous wording

Interest expense, net for the three months ended September 30, 2024, increased $2.0 million to $3.5 million compared to the three months ended September 30, 2023. The increase was primarily a result of $1.1 million in accreted interest related to our share repurchase liability, higher interest rates on our Term Loan during the period and interest on borrowings under our Revolving Loans. These increases were partially offset by a $0.8 million decrease in interest income earned on our money market account as a result of lower cash balances during the period and the maturation of a short-term investment, compared to the three months ended September 30, 2023.

Current wording

Interest expense, net for the three months ended March 31, 2025, increased $1.2 million to $2.9 million compared to the three months ended March 31, 2024. The increase was primarily a result of $1.1 million in accreted interest related to our share repurchase liability and a decrease in interest income earned on our money market account as a result of lower cash balances during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. These increases were partially offset by a decrease in interest expense on our Term Loan due to a lower principal balance and lower monthly interest rates during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Previous wording

The change in fair value of the earnout liabilities was primarily due to an overall decrease in the earnout liabilities related to the Business Combination Agreement that resulted from the settlement of the Donovitz Litigation and the June 5, 2024 Litigation coupled with the change in the closing price of our Class A common stock during the three months ended September 30, 2024 and 2023. For the three months ended September 30, 2024, the closing price of the Company’s Class A common stock decreased 25.3%, compared with a decrease of 24.3% in the corresponding period of 2023. The decrease in the closing price of our Class A common stock for the three months ended September 30, 2024, outpaced the decrease in the closing price of our Class A common stock for the three months ended September 30, 2023, resulting in a gain from change in the fair value of the earnout liability during the current period.

Current wording

The change in fair value of the earnout liabilities was primarily due to an overall decrease in the earnout liabilities related to the Business Combination Agreement that resulted from the settlement of litigation with two of our former owners coupled with the change in the closing price of our Class A common stock during the three months ended March 31, 2025 and 2024. For the three months ended March 31, 2025, the closing price of the Company’s Class A common stock decreased 46%, compared with an increase of 17% for the three months ended March 31, 2024.

Previous wording

The change in other income (expense) for the three months ended September 30, 2024, compared with the three months ended September 30, 2023, primarily resulted from foreign currency fluctuations during the period.

Current wording

The change in other expense for the three months ended March 31, 2025, compared with the three months ended March 31, 2024, primarily resulted from foreign currency fluctuations during the period.

Previous wording

The following is a reconciliation of net income (loss) to Adjusted EBITDA (in thousands) for the three and nine months ended September 30, 2024 and 2023:

Current wording

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

Previous wording

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 nine months ended September 30, 2024, interest expense, net included $1.1 million and $1.5 million of accreted interest related to the share repurchase liability.

Current wording

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 months ended March 31, 2025, interest expense, net included $1.1 million of accreted interest related to the share repurchase liability. There was no accreted interest for the three months ended March 31, 2024.

Previous wording

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 and $0.03 million was included in cost of products for the three and nine months ended September 30, 2024, respectively.

Current wording

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 months ended March 31, 2025. There was no depreciation expense included in cost of products for the three months ended March 31, 2024.

Previous wording

Represents transaction costs including legal fees of $0.04 million and $0.08 million during the three and nine months ended September 30, 2024, respectively, and legal fees of $0.07 million and filing fees of $0.2 million during the three months ended September 30, 2023 and legal fees of $0.9 million, filing fees of $0.2 million and professional services fees of $1.0 million for the nine months ended September 30, 2023 that 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 three months ended March 31, 2024, which were incurred in connection with the filing of, and transactions contemplated by, the Company’s securities offerings. No such filing fees were incurred during the three months ended March 31, 2025.

Previous wording

Represents professional services fees of $0.07 million incurred related to the accounting treatment of the share repurchase liability and a realized foreign currency loss of less than $0.01 million during the three months ended September 30, 2024, and $0.2 million incurred related to the accounting treatment of the share repurchase liability, strategic consulting and advisory services of $0.6 million, executive severance costs of $0.3 million, excise tax related to repurchases of Class A common stock of $0.2 million and a realized foreign currency loss of less than $0.01 million for the nine months ended September 30, 2024, and executive severance costs of $0.04 million and a realized foreign currency loss of less than $0.01 for the three months ended September 30, 2023 and for the nine months ended September 30, 2023, executive severance costs of $0.3 million, a realized foreign currency loss of $0.02 million, costs related to recruiting executive level management, including the former Chief Commercial Officer of $0.2 million, and 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.

Current wording

Represents strategic consulting and legal expenses related to the recent CEO transition of $0.3 million and a realized foreign currency loss of less than $0.01 million for the three months ended March 31, 2025. Represents executive severance costs of $0.08 million and a realized foreign currency loss of less than $0.01 million for the three months ended March 31, 2024.

Previous wording

Represents legal fees of $0.2 million incurred during the three months ended September 30, 2024 and legal fees of $0.7 million and professional services fees of $0.3 million incurred during the nine months ended September 30, 2024, respectively, related to our recent acquisitions and other strategic opportunities. For the three and nine months ended September 30, 2023, the amount represents professional services fees of $0.05 million, consulting fees of $0.1 million and legal fees of $0.3 million incurred during the three months ended September 30, 2023 and professional fees of $0.05 million, consulting fees of $0.3 million and legal fees of $0.4 million incurred during the nine months ended September 30, 2023 all of which were associated with strategic opportunities to expand the business.

Current 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 2024 acquisitions.

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 September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $38.2 million and $89.0 million, respectively. Additionally, as of September 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.

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 March 31, 2025 and December 31, 2024, we had cash and cash equivalents of $41.7 million and $39.3 million, respectively. Additionally, as of each March 31, 2025 and December 31, 2024, we had $50.0 million of Revolving Loans available under our Truist Credit Agreement.

Previous wording

Net cash used in investing activities decreased $4.2 million to $17.5 million for the nine months ended September 30, 2024, compared to $21.7 million for the nine months ended September 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 nine months ended September 30, 2024.

Current wording

Net cash used in investing activities decreased $10.3 million to $1.8 million for the three months ended March 31, 2025, compared to $12.2 million for the three months ended March 31, 2024. This decrease was principally driven by the acquisition of Asteria Health, Simpatra and BioSana during the three months ended March 31, 2024 and was partially offset by a $0.9 million increase in cash used to purchase leasehold improvements and other fixed assets that will be used at our 503B manufacturing facility.

Previous wording

Net cash used in financing activities increased $54.3 million to $66.1 million for the nine months ended September 30, 2024, compared to $11.9 million for the nine months ended September 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 nine months ended September 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 $2.9 million reduction in distributions to our partners during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Current wording

Net cash used in financing activities decreased $3.2 million to $2.3 million for the three months ended March 31, 2025, compared to $5.4 million for the three months ended March 31, 2024. The decrease 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, that did not reoccur during the three months ended March 31, 2025. This decrease was partially offset by a $0.6 million increase in distributions to our partners during the three months ended March 31, 2025, compared to the three months ended March 31, 2024.