Stemtech Corp SEC 10-K Report

Stemtech Corporation, known as the Stem Cell Nutrition Company®, has released its annual 10-K report, providing a comprehensive overview of its financial and operational performance for the year. The company, which operates in the global network marketing industry, focuses on developing science-based products aimed at supporting wellness by enhancing stem cell physiology. The report highlights key financial metrics, business achievements, strategic initiatives, and the challenges and risks faced by the company.

Financial Highlights

• Net Sales: $5.05 million, reflecting a slight increase from the previous year due to an increase in Independent Business Partners (IBPs).
• Gross Profit: $3.73 million, a decrease from the previous year, primarily due to increased cost of goods sold.
• Operating Loss: $2.39 million, an improvement from the previous year driven by effective cost management initiatives, including a reduction in general and administrative expenses.
• Net Loss: $3.77 million, an improvement from the previous year, primarily driven by reductions in operating expenses and interest expense.
• Net Loss Per Common Share - Basic and Diluted: $(0.03), reflecting the company's ongoing efforts to manage costs and improve financial performance.

Business Highlights

• Company Overview: Stemtech Corporation is a global network marketing company that develops science-based products aimed at supporting wellness by enhancing stem cell physiology. The company operates through a network of independent distributors and subsidiaries across various countries.
• New Product Launches: In December 2022, Stemtech introduced the Cellect One® Rapid Renew Stem Cell Peptide Night Cream, a proprietary formula containing an FDA patented ingredient, Red Oak Bark, for promoting skin health. In January 2025, the company launched Cellect One® Shield HOCL, a skin care mist supporting healthier skin and wound care.
• Geographical Performance: The company operates in three main geographical segments: North America, Latin America, and Asia. In 2024, the Americas generated $2,168,270 in net sales, Latin America contributed $2,670,163, and Asia accounted for $215,257. The Latin American market saw a slight decrease in sales compared to the previous year.
• Revenue Segments: Stemtech markets its products under several brands, including RCM System, stemrelease3™, StemFlo®, MigraStem®, and OraStem®. The company also plans to introduce StemPets™, a pet supplement, in April 2025, targeting the $303 billion global pet industry.
• Sales Units: The company projects the addition of 30,000 new independent business partner representatives over the next 12 to 24 months, aiming to expand its sales force and enhance market penetration.
• Future Outlook: Stemtech plans to continue expanding its product offerings and market presence through its network marketing model. The company is focused on increasing its independent business partner base and leveraging its direct-to-consumer network marketing distribution model to achieve global reach.

Strategic Initiatives

• Strategic Initiatives: Stemtech Corporation is focusing on expanding its product offerings and market presence. The company introduced new products such as Cellect One® Shield and plans to launch StemPets™ in 2025, targeting the growing pet supplement market. Additionally, Stemtech is leveraging its Independent Business Partner (IBP) sales force to enhance market penetration and reduce customer acquisition costs.
• Capital Management: Stemtech has been actively managing its capital through various financing activities. In 2024, the company raised capital through notes payable, factoring arrangements, and stock issuance, resulting in net cash provided by financing activities of $1,079,110. The company also increased its authorized shares to 400,000,000 and issued shares for services and debt conversion. Despite these efforts, Stemtech continues to face a stockholders' deficit, which increased to $5,226,804 as of December 31, 2024.
• Future Outlook: Stemtech plans to continue funding its operations through a combination of existing funds, equity securities, and debt instruments. The company anticipates additional capital needs to support its growth initiatives, including inventory acquisition and marketing expenses. Stemtech is also exploring potential mergers and acquisitions, as evidenced by the recent merger agreement with Seacret Direct, LLC, which is expected to enhance its product portfolio and market reach.

Challenges and Risks

• Challenges and Risks: Stemtech Corporation operates in the global network marketing industry, focusing on science-based products that support wellness through stem cell physiology. The company faces challenges related to maintaining its competitive edge in a rapidly evolving market, particularly with its reliance on independent distributors for product marketing. The introduction of new products, such as the Cellect One® Shield HOCL skin care product and the planned StemPets™ supplement, indicates a strategic move to diversify offerings and tap into the growing pet industry, which presents both opportunities and risks.
• Risk Factors: As a smaller reporting company, Stemtech is not required to provide detailed risk factors, but it is important to note the inherent risks associated with being an emerging growth company. These include potential vulnerabilities to market fluctuations, regulatory changes, and the need for continuous innovation to stay competitive. The company's exemption from certain regulatory requirements may also pose risks if these exemptions are removed or altered.
• Management’s Discussion and Analysis: Stemtech's financial performance shows a net loss for the years ended December 31, 2024, and 2023, highlighting ongoing challenges in achieving profitability. The company has managed to reduce operating expenses and interest expenses, but the absence of derivative-related gains from the previous year has impacted financial results. The increase in current liabilities and stockholders' deficit underscores the need for effective debt management and capital raising strategies. Management anticipates the need for additional capital to meet long-term operating requirements, which may involve further equity or debt financing, potentially leading to shareholder dilution.
• Market Risk: Stemtech is exposed to market risks, including fluctuations in the nutraceutical industry and broader capital markets, which could affect its ability to secure financing. The company's strategy to expand its Independent Business Partner network and introduce new products aims to mitigate some of these risks by increasing revenue streams and market presence. However, the success of these initiatives is uncertain and contingent on market acceptance and effective execution.

SEC Filing: Stemtech Corp [ STEK ] - 10-K - Jun. 30, 2025