Stemtech Corporation Reports 47% Decline in Net Sales for Q1 2026

Stemtech Corporation reported its financial results for the first quarter of 2026, revealing a significant decline in net sales and ongoing operational challenges. The company generated net sales of $462,957, a decrease of 47% from $868,046 in the same period of 2025. This decline was attributed to reduced inventory levels that hindered the fulfillment of distributor orders. Despite the drop in sales, the company is actively working to restore product availability through secured inventory financing, which management believes will gradually improve sales volume.

The cost of goods sold for the quarter was $109,304, down from $147,782 in the prior year, reflecting the lower sales volume. Gross profit fell to $353,653, compared to $720,264 in the previous year, resulting in a gross margin of 76.4%, down from 83.0%. The decrease in gross margin was influenced by a less favorable product mix and fixed fulfillment costs that did not decrease proportionally with revenue. Operating expenses also decreased to $1,447,902 from $1,925,169, primarily due to reductions in commission, marketing, and general administrative expenses, leading to an operating loss of $1,094,249, an improvement from the loss of $1,204,905 in the same quarter of 2025.

The company reported a net loss of $1,252,880 for the quarter, which is an improvement from the net loss of $1,458,726 in the prior year. This reduction in loss was primarily due to lower operating expenses and interest costs, despite recognizing a loss on extinguishment of debt of $60,972. The total current assets increased to $602,589 as of March 31, 2026, up from $457,062 at the end of 2025, largely due to a rise in inventory levels. However, current liabilities also increased to $11,064,353, resulting in a working capital deficit of $10,461,764.

Strategically, Stemtech has been focusing on expanding its Independent Business Partner (IBP) network, with plans to add 30,000 new representatives over the next 12 to 24 months. The company is also preparing to launch new products, including a pet supplement, which is expected to tap into the growing pet care market. In April 2026, Stemtech secured financing to support the production of approximately $2.5 million in inventory, aimed at improving product availability and meeting anticipated customer demand.

Looking ahead, Stemtech's management acknowledges the need for additional capital to sustain operations and fund growth initiatives. The company plans to raise funds through equity or debt securities and is exploring various financing options, including short-term loans from directors. However, the reliance on external financing poses risks, and the company has expressed uncertainty regarding its ability to continue as a going concern without sufficient revenue generation and capital influx.