What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-13 · 154 added, 129 removed, 544 unchanged (34% of the section changed)

1 unchanged sentence

MANNATECH, INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS – (UNAUDITED)

(in thousands, except share and per share amounts)

ASSETS June 30, 2024 (unaudited) December 31, 2023

ASSETS September 30, 2024 (unaudited) December 31, 2023

Cash and cash equivalents $ 12,150 $ 7,731

17 unchanged sentences

Accounts payable 3,580 4,010

Current portion of operating lease liabilities 1,508 1,661

Taxes payable 1,361 1,521

10 unchanged sentences

Preferred stock, $0.01 par value, 1,000,000 shares authorized, no shares issued or outstanding — —

Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,742,857 shares issu ed and 1,884,814 s hares outstanding as of June 30, 2024 and 2,742,857 shares issued and 1,860,154 shares outstanding as of December 31, 2023

Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,742,857 shares issu ed and 1,884,814 s hares outstanding as of September 30, 2024 and 2,742,857 shares issued and 1,860,154 shares outstanding as of December 31, 2023

Additional paid-in capital 33,005 33,309

1 unchanged sentence

Accumulated other comprehensive loss ( 1,997 ) ( 1,015 )

Treasury stock, at average cost, 858,043 s hares as of June 30, 2024 and 882,703 shares as of December 31, 2023

Treasury stock, at average cost, 858,043 s hares as of September 30, 2024 and 882,703 shares as of December 31, 2023

( 19,936 ) ( 20,509 )

1 unchanged sentence

Total liabilities and shareholders’ equity $ 40,572 $ 41,206

See accompanying notes to unaudited condensed consolidated financial statements.

MANNATECH, INCORPORATED AND SUBSIDIARIES

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

Total operating expenses 22,733 25,756 67,530 78,288

Loss from operations ( 1,143 ) ( 954 ) ( 322 ) ( 241 )

Interest (expense) income, net ( 105 ) ( 10 ) ( 87 ) 14

Other income, net 1,120 150 1,990 483

Income (loss) from operations 887 172 565 ( 69 )

Interest expense, net ( 109 ) ( 17 ) ( 196 ) ( 3 )

Other (expense) income, net ( 1,495 ) 320 495 803

(Loss) income before income taxes ( 717 ) 475 864 731

Income tax expense ( 496 ) ( 291 ) ( 1,025 ) ( 757 )

Income tax benefit (expense) 389 ( 457 ) ( 636 ) ( 1,214 )

Net (loss) income $ ( 328 ) $ 18 $ 228 $ ( 483 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Foreign currency translations 2,105 ( 889 ) ( 982 ) ( 2,339 )

Comprehensive loss $ ( 2,280 ) $ ( 1,756 ) $ ( 2,531 ) $ ( 1,951 )

Comprehensive income (loss) $ 1,777 $ ( 871 ) $ ( 754 ) $ ( 2,822 )

See accompanying notes to unaudited condensed consolidated financial statements.

18 unchanged sentences

Balance at June 30, 2024 1,884,814 $ — $ 32,982 $ ( 745 ) $ ( 4,102 ) $ ( 19,936 ) $ 8,199

Net loss — — — ( 328 ) — — ( 328 )

Charge related to stock-based compensation — — 23 — — — 23

Foreign currency translations — — — — 2,105 — 2,105

Balance at September 30, 2024 1,884,814 $ — $ 33,005 $ ( 1,073 ) $ ( 1,997 ) $ ( 19,936 ) $ 9,999

Common Stock, $0.0001 par value

18 unchanged sentences

Balance at June 30, 2023 1,866,212 $ — $ 33,294 $ 437 $ ( 1,658 ) $ ( 20,431 ) $ 11,642

Net income — — — 18 — — 18

Charge related to stock-based compensation — — 7 — — — 7

Repurchase of common stock ( 6,058 ) — — — — ( 78 ) ( 78 )

Foreign currency translations — — — — ( 889 ) — ( 889 )

Balance at September 30, 2023 1,860,154 $ — $ 33,301 $ 455 $ ( 2,547 ) $ ( 20,509 ) $ 10,700

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

4 unchanged sentences

Provision for inventory losses 661 279

Provision for allowance for credit losses 106 130

Loss on retirement of fixed assets 126 —

Provision for (reversal of) allowance for credit losses ( 319 ) 345

Loss on retirement of property and equipment 253 7

Gain on disposal of subsidiary entity ( 226 ) —

Unrealized loss (gain) from foreign exchange ( 1,895 ) —

Unrealized gain from foreign exchange ( 146 ) —

Charge related to stock-based compensation 269 259

16 unchanged sentences

Acquisition of property and equipment ( 403 ) ( 540 )

Net cash used in investing activities ( 143 ) ( 354 )

Cash used in investing activities ( 403 ) ( 539 )

CASH FLOWS FROM FINANCING ACTIVITIES:

10 unchanged sentences

See accompanying notes to unaudited condensed consolidated financial statements.

Six Months Ended

Nine Months Ended

September 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

13 unchanged sentences

(ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom);

and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan, Thailand, Hong Kong, and China).

During the quarter ended June 30, 2024 the Company liquidated its entity in Sweden, Mannatech Sverige AB.

and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Thailand, Hong Kong, Taiwan and China).

During the second quarter of 2024 the Company liquidated its entity in Sweden, Mannatech Sverige AB.

The Company sells its products principally through network marketing distribution channels via its active associates (“independent associate” or “associates” or “distributors”) and its “preferred customers,” Active business building associates and preferred customers purchase the Company’s products at published wholesale prices.

25 unchanged sentences

Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2023 included in our 2023 Annual Report.

There have been no significant changes in our accounting policies or the application thereof during the first or second quarter of 2024.

There have been no significant changes in our accounting policies or the application thereof during the first, second and third quarter of 2024.

MANNATECH, INCORPORATED AND SUBSIDIARIES

5 unchanged sentences

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

Cash and cash equivalents was $ 9.2 million at June 30, 2024 and $ 7.7 million at December 31, 2023.

Cash and cash equivalents was $ 12.2 million at September 30, 2024 and $ 7.7 million at December 31, 2023.

The Company includes in its cash and cash equivalents credit card receivables due from its credit card processor, as the cash proceeds from credit card receivables are received within 24 to 72 hours.

At June 30, 2024 and December 31, 2023, credit card receivables were $ 2.2 million and $ 1.4 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $ 3.9 million and $ 3.5 million at June 30, 2024 and December 31, 2023, respectively.

At September 30, 2024 and December 31, 2023, credit card receivables were $ 2.0 million and $ 1.4 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $ 4.8 million and $ 3.5 million at September 30, 2024 and December 31, 2023, respectively.

The Company invests cash in liquid instruments, such as money market funds and interest-bearing deposits.

The Company holds cash in high quality financial institutions and does not believe it has an excessive exposure to credit concentration risk.

A significant portion of our cash and cash equivalent balances were concentrated within the Republic of Korea, with cash and cash equivalents totaling $ 3.2 million and $ 2.3 million at June 30, 2024 and December 31, 2023, respectively.

In addition, for the three and six months ended June 30, 2024 and 2023, a concentrated portion of our operating cash flows were earned from operations within the Republic of Korea.

A significant portion of our cash and cash equivalent balances were concentrated within the Republic of Korea, with cash and cash equivalents totaling $ 3.3 million and $ 2.3 million at September 30, 2024 and December 31, 2023, respectively.

In addition, for the three and nine months ended September 30, 2024 and 2023, a concentrated portion of our operating cash flows were earned from operations within the Republic of Korea.

An adverse change in economic conditions within the Republic of Korea could negatively affect the Company’s results of operations.

2 unchanged sentences

(i) direct selling insurance premiums and credit card sales in the Republic of Korea;

(ii) reserve on credit card sales in the United States and Canada;

(ii) reserves related to credit card sales in the United States and Canada;

and (iii) the Australia building lease collateral.

At June 30, 2024 and December 31, 2023, our total restricted cash was $ 1.6 million and $ 1.7 million, respectively.

At September 30, 2024 and December 31, 2023, our total restricted cash was $ 1.6 million and $ 1.7 million, respectively.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's condensed consolidated balance sheets to the total amount presented in the condensed consolidated statement of cash flows (in thousands) :

June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022

September 30, 2024 December 31, 2023 September 30, 2023 December 31, 2022

Cash and cash equivalents $ 12,150 $ 7,731 $ 7,928 $ 13,777

5 unchanged sentences

Receivables are created upon shipment of an order if the credit card payment is rejected or does not match the order total.

As of June 30, 2024 and December 31, 2023, receivables consisted primarily of amounts due from preferred customers and associates.

As of September 30, 2024 and December 31, 2023, receivables consisted primarily of amounts due from preferred customers and associates.

The Company's accounts receivable balances, net, are presented below (in thousands) :

June 30, 2024 December 31, 2023 December 31, 2022

September 30, 2024 December 31, 2023 December 31, 2022

Accounts receivable, net

7 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

At June 30, 2024 and June 30, 2023, the Company held an allowance for credit losses of $ 1.4 million and $ 1.1 million, respectively.

June 30, 2024 June 30, 2023

At September 30, 2024 and September 30, 2023, the Company held an allowance for credit losses of $ 0.9 million and $ 1.3 million, respectively.

September 30, 2024 September 30, 2023

Allowance for credit losses at beginning of period $ 1,278 $ 973

5 unchanged sentences

Other Assets consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Investment in Korea Mutual Aid Cooperative & Consumer $ 2,177 $ 2,204

2 unchanged sentences

$ 3,674 $ 3,751

The Company accounts for its investment in Korea Mutual Aid Cooperative & Consumer at its initial investment amount, in accordance with ASC 321, Investments - Equity Securities (“ASC 321”).

This guidance offers an alternative to the requirement of carrying equity interests at fair value as per ASC 820, Fair Value Measurement.

The measurement alternative is applicable to certain equity interests without readily determinable fair values that fall within the scope of ASC 321 and are otherwise required to be measured at fair value.

The application of this measurement alternative is optional and is applied upon the acquisition of an equity interest.

See Note 9, Fair Value , for more information.

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Accrued compensation $ 2,100 $ 1,707

Operating Lease Liabilities - Current Portion 1,679 1,661

Accrued legal and accounting fees 931 865

13 unchanged sentences

S ee Note 9, Employee Benefit Plans , of the Company’s 2023 Annual Report for more information.

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Government required severance $ 926 $ 822

6 unchanged sentences

The Company records revenue net of any sales taxes and records a reserve for expected sales returns based on its historical experience.

The Company recognizes revenue from shipped products when delivered to the customer, thus the performance obligation is satisfied.

Corporate-sponsored event revenue is recognized when the event is held.

At June 30, 2024 and December 31, 2023, remaining performance obligations related to shipments were $ 1.2 million and $ 1.4 million, respectively.

The Company's remaining performance obligations related to associate fees were $ 0.1 million at both June 30, 2024 and December 31, 2023.

During the quarter ended September 30, 2024 the Company changed its shipping terms with customers such that ownership transfers upon delivery to the freight carrier, satisfying the Company's performance obligation.

Previously, the Company's shipping terms were FOB destination, so the Company recognized revenue upon delivery of the product to the customer.

As a result of the change in shipping terms, no revenue was required to be deferred for product sales that were in transit at September 30, 2024.

The Company's deferred revenue balances related to product orders in transit were $0 at September 30, 2024 and $ 1.4 million at December 31, 2023, respectively.

The Company's remaining performance obligations related to associate fees were $ 0.1 million at both September 30, 2024 and December 31, 2023.

These amounts are included in Deferred revenue on the accompanying Condensed Consolidated Balance Sheets, respectively.

16 unchanged sentences

Deferred revenue consisted of:

(i) sales of products shipped but not received by customers by the end of the respective period;

(i) sales of products shipped but not received by customers by the end of the respective period (up to the change in shipping terms with customers);

(ii) revenue from the loyalty program;

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

8 unchanged sentences

Breakage rates are estimated based on historical data and can be reasonably and objectively determined.

The deferred revenue associated with the loyalty program at each of June 30, 2024 and June 30, 2023 was $ 2.9 million and $ 2.6 million, respectively.

The deferred revenue associated with the loyalty program at each of September 30, 2024 and September 30, 2023 was $ 2.9 million.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Loyalty program (in thousands)

7 unchanged sentences

Deferred Commissions

The Company defers commissions on (i) the sales of products shipped but not received by customers by the end of the respective period and (ii) the loyalty program.

The Company defers commissions on (i) the sales of products shipped but not received by customers by the end of the respective period (up to the change in shipping terms with the customers) and (ii) the loyalty program.

Deferred commissions are incremental costs and are charged to expense when the related revenue is recognized.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

10 unchanged sentences

As of each of the periods shown below , our sales return reserve consisted of the following (in thousands) :

June 30, 2024 June 30, 2023

September 30, 2024 September 30, 2023

Sales reserve at beginning of period $ 41 $ 59

7 unchanged sentences

The Company records freight and shipping fees collected from its customers as fulfillment costs.

In accordance with ASC 606-10-25-18a, freight and shipping fees are not deemed to be separate performance obligations as these activities occur before the customer receives the product.

Freight and shipping fees are accounted for as activities to fulfill the promise to transfer the products to the customer, not as a separate performance obligation.

Commissions and Incentives

1 unchanged sentence

The Company accrues commissions and incentives when earned by associates and pays commissions on product and pack sales on a monthly basis.

Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

The Company’s comprehensive income consists of the Company’s net income, foreign currency translation adjustments from its Japan, Republic of Korea, Taiwan, Denmark, Norway, Sweden, Mexico and China operations, remeasurement of intercompany balances of a long-term-investment nature from its Taiwan, Mexico and Cyprus operations, and changes in the pension obligation for its Japanese employees.

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources and includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

The Company’s comprehensive income (loss) consists of the Company’s net income (loss), foreign currency translation adjustments from its Japan, Republic of Korea, Denmark, Norway, Sweden, Mexico, Taiwan and China operations, remeasurement of intercompany balances of a long-term-investment nature from its Mexico, Taiwan, and Cyprus operations, and changes in the pension obligation for its Japanese employees.

Accounting Pronouncements Issued but Not Yet Effective

10 unchanged sentences

The Company provides an allowance for any slow-moving or obsolete inventories.

The allowance for slow-moving inventory obsolescence was $ 0.4 million at each of June 30, 2024 and December 31, 2023.

Inventories as of June 30, 2024 and December 31, 2023, consisted of the following (in thousands) :

June 30, 2024 December 31, 2023

The allowance for slow-moving inventory obsolescence was $ 0.6 million at each of September 30, 2024 and December 31, 2023.

Inventories as of September 30, 2024 and December 31, 2023, consisted of the following (in thousands) :

September 30, 2024 December 31, 2023

Raw materials $ 5,110 $ 5,104

1 unchanged sentence

Total $ 11,660 $ 14,535

For the three and six months ended June 30, 2024, the Company’s effective tax rate was ( 277.4 )% and 74.8 %, respectively.

For the three and six months ended June 30, 2023, the Company’s effective tax rate was ( 20.8 )% and ( 228.0 )%, respectively.

For the three and six months ended June 30, 2024 and 2023, the Company's effective tax rate was determined based on the estimated annual effective income tax rate.

For the three and nine months ended September 30, 2024, the Company’s effective tax rate was 83.9 % and 71.1 %, respectively.

For the three and nine months ended September 30, 2023, the Company’s effective tax rate was 43.0 % and 166.1 %, respectively.

For the three and nine months ended September 30, 2024 and 2023, the Company's effective tax rate was determined based on the estimated annual effective income tax rate.

The effective tax rate for the three and nine months ended September 30, 2024 and September 30, 2023, was different from the federal statutory rate due to the mix of earnings across jurisdictions and the associated valuation allowances recorded on losses in certain jurisdictions.

MANNATECH, INCORPORATED AND SUBSIDIARIES

1 unchanged sentence

NOTES PAYABLE

Notes payable were $ 4.0 million and $ 0.2 million as of June 30, 2024 and December 31, 2023, respectively.

The current portion was $ 0.4 million and $ 0.2 million at June 30, 2024 and December 31, 2023, respectively, as a result of insurance financing arrangements.

Notes payable were $ 3.8 million and $ 0.2 million as of September 30, 2024 and December 31, 2023, respectively.

The current portion was $ 0.2 million at each of September 30, 2024 and December 31, 2023, as a result of insurance financing arrangements.

The notes are fully amortizing and payments are made monthly, according to the terms of the agreements which have a weighted average effective interest rate of 10.5 %.

The long-term portion of notes payable relates to three unsecured notes, described below.

The long-term portion of notes payable was $ 3.6 million and $ 0.0 million as of June 30, 2024 and December 31, 2023, respectively.

The long-term portion of notes payable was $ 3.6 million as of September 30, 2024.

There were no unsecured notes at December 31, 2023.

On April 23, 2024, the Company issued an unsecured note payable to Jade Capital in the amount of $ 2.5 million.

3 unchanged sentences

Tyler Rameson is an independent member of Mannatech's Board of Directors, and is the managing member of Jade Capital.

As of June 30, 2024, there was no current portion and the long term portion of the balance was $2.5 million.

As of September 30, 2024, there was no current portion and the long-term portion of the balance was $2.5 million.

On April 23, 2024, the Company issued an unsecured note payable to J.

4 unchanged sentences

Fredrick is the Chairman of Mannatech's Board of Directors.

As of June 30, 2024, there was no current portion and the long term portion of the balance was $1.0 million.

As of September 30, 2024, there was no current portion and the long-term portion of the balance was $1.0 million.

On April 23, 2024, the Company issued an unsecured note payable to Kevin Robbins in the amount of $ 0.1 million.

3 unchanged sentences

Robbins is a member of Mannatech's Board of Directors.

As of June 30, 2024, there was no current portion and the long term portion of the balance was $0.1 million.

As of June 30, 2024, the Company's future principal payments on notes payable were as follows (in thousands):

As of September 30, 2024, there was no current portion and the long-term portion of the balance was $0.1 million.

As of September 30, 2024, the Company's future principal payments on notes payable were as follows (in thousands):

Principal Payments Remaining 2024 2025 2026 Thereafter Total

8 unchanged sentences

The Board has reserved a maximum of 370,000 shares of our common stock that may be issued under the 2017 Plan (subject to adjustments for stock splits, stock dividends or other changes in corporate capitalization).

As of June 30, 2024, the Company had a total of 94,621 shares available for grant under the 2017 Plan, which expires on April 16, 2027.

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2024, the Company had a total of 121,971 shares available for grant under the 2017 Plan, which expires on April 16, 2027.

The 2017 Plan provides for grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock and performance stock units to our employees, board members, and consultants.

6 unchanged sentences

The fair value of the stock option award is calculated using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model requires us to apply judgment and use subjective assumptions, including expected stock option life, expected volatility, expected average risk-free interest rates, and expected forfeiture rates.

The Black-Scholes option-pricing model

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

requires us to apply judgment and use subjective assumptions about expected dividend yields, risk-free interest rates, price volatility related to the underlying shares, and the expected stock option life, including forfeitures.

The following assumptions were used to calculate the fair value of stock options granted:

June 2024 Grant

June 2024 Grant July 2024 Grant

Estimated fair value per share of options granted:

$ 4.67 $ 4.00

Annualized dividend yield — % — %

4 unchanged sentences

The expected life assumptions are based on the Company’s historical employee exercise and forfeiture behavior.

During the six months ended June 30, 2024 and 2023, the Company granted 10,000 and 5,000 stock options, respectively.

The fair value of stock options granted during the six months ended June 30, 2024 and 2023 was approximately $ 4.67 and $ 4.32 per share, respectively.

During the nine months ended September 30, 2024 and 2023, the Company granted 14,500 and 5,000 stock options, respectively.

The weighted average fair value of stock options granted during the nine months ended September 30, 2024 and 2023 was approximately $ 4.47 and $ 4.32 per share, respectively.

On March 11, 2024, the Company issued a grant of 8,187 restricted stock units of our common stock to our Chief Executive Officer.

3 unchanged sentences

The Company has determined the fair value of the grant is $ 0.1 million.

Accordingly, the company has recognized compensation expense related to the grant of $10 thousand and $13 thousand for the three and six months ended June 30, 2024, respectively.

The Company recognized compensation expense as follows for the three and six months ended June 30 (in thousands) :

Accordingly, the company has recognized compensation expense related to the grant of $10 thousand and $23 thousand for the three and nine months ended September 30, 2024, respectively.

The Company recognized compensation expense as follows for the three and nine months ended September 30 (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Total net compensation expense $ 20 $ 6 $ 58 $ 28

As of June 30, 2024, the Company expects to record compensation expense in the future as follows (in thousands) :

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2024, the Company expects to record compensation expense in the future as follows (in thousands) :

2024 Years ending December 31,

2 unchanged sentences

At the discretion of the Board, each director may receive a portion of their fees payable in stock grants in lieu of cash compensation.

At June 30, 2024 and 2023, the Company issued a total of 24,660 and 12,808 treasury stock to the members of the Board as a part of their compensation, respectively.

The stock grants to the Board were vested upon grant and the Company recognized $0.2 million compensation expense at each of June 30, 2024 and 2023.

For the nine months ending September 30, 2024 and 2023, the Company issued a total of 24,660 and 12,808 treasury stock to the members of the Board as a part of their compensation, respectively.

The stock grants to the Board were vested upon grant and the Company recognized $0.2 million compensation expense for each of the nine months ending September 30, 2024 and 2023.

MANNATECH, INCORPORATED AND SUBSIDIARIES

2 unchanged sentences

Treasury Stock

There were no shares repurchased during the three and six months ended June 30, 2024.

During the three and six months ended June 30, 2023, the Company repurchased 7,396 shares of its outstanding common stock.

As of June 30, 2024 and December 31, 2023 , the Company had 858,043 and 882,703 treasury s hares, respectively.

There were no shares repurchased during the three and nine months ended September 30, 2024.

During the three and nine months ended September 30, 2023, the Company repurchased 6,058 and 13,454 shares of its outstanding common stock, respectively.

As of September 30, 2024 and December 31, 2023 , the Company had 858,043 and 882,703 treasury s hares, respectively.

Accumulated Other Comprehensive Loss

8 unchanged sentences

( 982 ) — ( 982 )

Balance as of June 30, 2024 $ ( 4,514 ) $ 412 $ ( 4,102 )

Balance as of September 30, 2024 $ ( 2,409 ) $ 412 $ ( 1,997 )

(1) No material amounts were reclassified from accumulated other comprehensive loss.

Holders of Common Stock are entitled to receive dividends at the same rate, when, as and if declared by our Board of Directors out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends and to the rights of the holders of one or more outstanding series of our preferred stock.

For the three and six months ended June 30, 2024, the Company did not pay any dividends.

For the three and six months ended June 30, 2023, the Company paid dividends of $ 0.20 per share to holders of our Common Stock in the amount of $ 0.4 million and $ 0.8 million, respectively.

For the three and nine months ended September 30, 2024, the Company did not pay any dividends.

During the nine months ended September 30, 2023, the Company paid dividends of $ 0.20 per share to holders of our Common Stock in the amount of $ 0.7 million.

Litigation in General

As of June 30, 2024, the Company had no open or pending litigation and no legal reserve was deemed necessary.

As of September 30, 2024, the Company had no open or pending litigation and no legal reserve was deemed necessary.

The Company has incurred several claims in the normal course of business.

10 unchanged sentences

Generally, the Company’s operating leases relate to office space used in Mannatech’s operations, including its headquarters in Flower Mound, Texas and office space in international locations in which the Company does business.

As of June 30, 2024 and December 31, 2023, all of the Company’s finance leases pertain to certain equipment used in the business.

As of September 30, 2024 and December 31, 2023, all of the Company’s finance leases pertain to certain equipment used in the business.

On March 10, 2023, the Company entered into a five-year agreement to sublease 10,000 rentable square feet of the Company's leased office space in Flower Mound, Texas to a subtenant.

2 unchanged sentences

The Company has made a policy election in accordance with ASC 842-10-15-39A to exclude from consideration taxes that are assessed on and collected from the sublessee from consideration.

For the three and six months ended June 30, 2024, the Company had earned less than $ 0.1 million and $ 0.1 million income from the sublease, respectively.

For the three and six months ended June 30, 2023, the Company had earned less than $ 0.1 million and $ 0.1 million income from the sublease, respectively.

As of June 30, 2024, the Company had net operating lease right-of-use assets of $ 2.8 million and net finance lease right-of-use assets of $ 1.1 million.

At June 30, 2024, our operating lease liabilities were $ 3.7 million and our finance lease liabilities were $ 1.1 million.

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of June 30, 2024 were 2.99 years and 5.2 %, respectively.

The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of June 30, 2024 were 3.79 years and 6.5 %, respectively.

For the three and nine months ended September 30, 2024, the Company had earned less than $ 0.1 million and $ 0.1 million income from the sublease, respectively.

For the three and nine months ended September 30, 2023, the Company had earned less than $ 0.1 million and $ 0.1 million income from the sublease, respectively.

As of September 30, 2024, the Company had net operating lease right-of-use assets of $ 2.5 million and net finance lease right-of-use assets of $ 1.0 million.

At September 30, 2024, our operating lease liabilities were $ 3.3 million and our finance lease liabilities were $ 1.0 million.

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of September 30, 2024 were 2.82 years and 5.3 %, respectively.

The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of September 30, 2024 were 3.54 years and 6.5 %, respectively.

The Company uses the discount rates implicit in each lease, or an estimate of the Company's incremental borrowing rate if the rate implicit in a lease cannot be readily determined.

As of June 30, 2024 and December 31, 2023 our right-of-use assets and lease liabilities balances, net of accumulated amortization, were as follows (in thousands) :

Leases Classification June 30, 2024 December 31, 2023

As of September 30, 2024 and December 31, 2023 our right-of-use assets and lease liabilities balances, net of accumulated amortization, were as follows (in thousands) :

Leases Classification September 30, 2024 December 31, 2023

Right-of-use assets

3 unchanged sentences

Current portion of lease liabilities

Operating leases Accrued expenses $ 1,679 $ 1,661

Operating leases Current portion of operating leases $ 1,508 $ 1,661

Finance leases Current portion of finance leases 271 269

5 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2024, the Company's future sublease income and minimum future lease payments on operating and finance leases were as follows (in thousands) :

June 30, 2024

As of September 30, 2024, the Company's future sublease income and minimum future lease payments on operating and finance leases were as follows (in thousands) :

Future Maturities of Leases Operating Leases Finance Leases Sublease Income

18 unchanged sentences

These investments are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets.

The Company does not have any material financial liabilities that were required to be measured at fair value on a recurring basis at June 30, 2024.

The tables below present the recorded amount of financial assets measured at fair value (money market fund) (in thousands) on a recurring basis as of June 30, 2024 and December 31, 2023.

The Company does not have any material financial liabilities that were required to be measured at fair value on a recurring basis at September 30, 2024.

As of September 30, 2024, the Company valued its investment in Korea Mutual Aid Cooperative & Consumer based on the initial investment amount in accordance with ASC 321.

The Company determined that the investment was not impaired as of that date.

Since these securities are not actively traded, the Company will apply valuation adjustments if and when relevant indicators become available.

Consequently, these securities are carried at cost and are classified as Level 3 within the fair value hierarchy.

The tables below present the recorded amount of financial assets and liabilities measured at fair value (in thousands) on a recurring basis as of September 30, 2024 and December 31, 2023.

The Company's interest-bearing deposits are measured at amortized cost, which approximates fair value to the carrying value due to the relatively short maturity of the asset, (in thousands).

The Company did not have any financial assets measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023.

The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at June 30, 2024 and December 31, 2023.

June 30, 2024

The Company did not have any financial assets measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023.

The Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023.

September 30, 2024

Level 1 Level 2 Level 3 Total

7 unchanged sentences

Total $ 5,414 $ — $ — $ 5,414

Unsecured notes payable $ 3,600 $ — $ — $ 3,600

Total Liabilities $ 3,600 $ — $ — $ 3,600

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

22 unchanged sentences

(ii) Europe/the Middle East/Africa (“EMEA”) (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, Namibia, the Netherlands, Norway, South Africa, Spain, Sweden and the United Kingdom);

and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan, Hong Kong, and China).

and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Hong Kong, Taiwan and China).

It also ships products to customers in the following countries:

Belgium, France, Greece, Italy, Luxembourg, and Poland.

Consolidated net sales shipped to customers in these regions, along with pack or associate fee and product information for the three and six months ended June 30, were as follows (in millions, except percentages) :

Consolidated net sales shipped to customers in these regions, along with pack or associate fee and product information for the three and nine months ended September 30, were as follows (in millions, except percentages) :

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Region 2024 2023 2024 2023

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

3 unchanged sentences

Total sales $ 31.7 $ 32.6 $ 88.9 $ 99.3

Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of June 30, 2024 and December 31, 2023, reside in the following regions, as follows (in millions) :

Region June 30, 2024 December 31, 2023

Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of September 30, 2024 and December 31, 2023, reside in the following regions, as follows (in millions) :

Region September 30, 2024 December 31, 2023

Americas $ 2.6 $ 3.6

2 unchanged sentences

Inventory balances, which consist of raw materials, finished goods, and promotional materials, as offset by the allowance for slow moving or obsolete inventories, reside in the following regions (in millions) :

Region June 30, 2024 December 31, 2023

Region September 30, 2024 December 31, 2023

Americas $ 6.9 $ 8.3

6 unchanged sentences

Diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards outstanding under the Mannatech, Incorporated 2017 Stock Incentive Plan (described above).

In determining the potential dilutive effect of outstanding stock options for the three and six months ended June 30, 2024, the Company used the quarterly and six-month average common stock close price of $ 7.92 and $ 8.37 per share, respectively.

For three months ended June 30, 2024, the Company's common stock subject to options were excluded from the diluted EPS calculation as their effect would have been antidilutive.

The company reported a net loss for the three months ended June 30, 2024.

For the six months ended June 30, 2024, there were 1.89 million weighted-average common shares outstanding used for the basic EPS calculation.

For the six months ended June 30, 2024, 8,187 shares granted (see Note 5 — Stock Based Compensation, for more information).

In determining the potential dilutive effect of outstanding stock options for the three and nine months ended September 30, 2024, the Company used the quarterly and nine-month average common stock close price of $ 7.32 and $ 8.01 per share, respectively.

For the three months ended September 30, 2024, the Company's common stock subject to options were excluded from the diluted EPS calculation as their effect would have been antidilutive.

The company reported a net loss for the three months ended September 30, 2024.

For the nine months ended September 30, 2024, there were 1.89 million weighted-average common shares outstanding used for the basic EPS calculation.

For the nine months ended September 30, 2024, 8,187 shares granted (see Note 5, Stock Based Compensation, for more information).

These shares were excluded from the calculation of diluted EPS because the related market condition was not achieved.

In addition, 524,122 shares underlying stock options were excluded from the diluted EPS calculation, as their effect would have been antidilutive.

For the three and six months ended June 30, 2023, the Company's common stock subject to options were excluded from the diluted EPS calculation as their effect would have been antidilutive.

The company reported a net loss for the three and six months ended June 30, 2023.

In determining the potential dilutive effect of outstanding stock options for the three and nine months ended September 30, 2023, the Company used the quarterly and nine-month average common stock close price of $ 11.90 and $ 14.11 per share, respectively.

For the three months ended September 30, 2023, there were 1.86 million weighted-average common shares outstanding used for the basic EPS calculation.

For the three months ended September 30, 2023, approximately 0.2 million shares were excluded from the diluted EPS calculation as their effect would have been antidilutive.

The company reported a net loss for the nine months ended September 30, 2023.

Calculation of net EPS— basic and diluted ( in thousands, except EPS ):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

EPS - Diluted $ ( 0.17 ) $ 0.01 $ 0.12 $ ( 0.26 )

SUBSEQUENT EVENTS

CFO Executive Employment Agreement

On July 1, 2024, the Board of Directors appointed James Clavijo as Chief Financial Officer ("CFO"), principal financial officer and principal accounting officer of the Company.

Per the terms of the Employment Agreement with Mr.

Clavijo, he is entitled to an annual base salary of $275,000 and is eligible to participate in the Company's annual executive bonus program established by the Board of Directors' Compensation Committee.

The Company granted an option to Mr.

Clavijo to purchase 4,500 shares of the Company's common stock, pursuant to the Company's 2017 Plan.

The Company extended a one-time $15,000 relocation allowance to Mr.

Clavijo and he will be eligible to participate in the Company's employee benefits, including its 401k, health insurance, and paid time off benefits.

Under the terms of the Employment Agreement, Mr.

Clavijo is entitled to severance if the Company either exercises its right to early termination or provides notice of its intent to not renew the agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements