What changed in this filing

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Item 9A. Controls and Procedures

2025-03-26 compared with 2024-03-28 · 343 added, 297 removed, 963 unchanged (40% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (principal executive officer) and our Chief Operating Officer and Interim Chief Financial Officer (principal financial officer), have concluded, based on their evaluation as of December 31, 2023, that our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d – 15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer), have concluded, based on their evaluation as of December 31, 2024, that our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d – 15(e) under the Exchange Act) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and include controls and procedures designed to ensure that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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10-K 00-24657 10.61 March 14, 2017

14.1* Code of Ethic s for Officer s

14.1* Code of Ethics for Officers

10-K 00-24657 14.1 March 25, 2025

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March 25, 2025 By:

/s/ Alfredo Bala

/s/ Landen Fredrick

Landen Fredrick

Chief Executive Officer

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March 25, 2025 By:

/s/ Landen Fredrick

Landen Fredrick

Chief Operating Officer and Interim Chief Financial Officer

/s/ James Clavijo

James Clavijo

Chief Financial Officer

(principal financial officer)

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Signature Title Date

/s/ Alfredo Bala Chief Executive Officer

/s/ Landen Fredrick Chief Executive Officer

(principal executive officer) March 25, 2025

/s/ Landen Fredrick President and Chief Operating Officer and Interim Chief Financial Officer

(principal financial officer) March 28, 2024

Landen Fredrick

/s/ James Clavijo Chief Financial Officer

(principal financial officer) March 25, 2025

James Clavijo

Stanley Fredrick Chairman of the Board March 25, 2025

Stanley Fredrick

/s/ Robert A.

Toth Vice Chairman of the Board March 25, 2025

/s/ Kevin Andrew Robbins Director March 25, 2025

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(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the Company’s Determination of Transfer Pricing Policies

As described in Note 1 to the consolidated financial statements, the Company is subject to transfer pricing tax regulations designed to ensure the appropriate allocation of income between the U.S.

As described in Note 1 to the consolidated financial statements, the Company is subject to transfer pricing tax regulations designed to ensure the appropriate allocation of income and expenses between the U.S.

and foreign entities and that the Company is taxed accordingly.

As disclosed in Note 7 to the consolidated financial statements, the Company’s loss before income taxes of $1.1 million for the year ended December 31, 2023 comprised of a loss before income taxes of $5.4 million in the United States and income before income taxes of $4.3 million outside of the United States.

This is a function of the Company’s transfer pricing policies, which govern the allocation of taxable income among the Company’s various tax jurisdictions.

As disclosed in Note 7 to the consolidated financial statements, the Company’s income before income taxes of $3.7 million for the year ended December 31, 2024 comprised of income before income taxes of $0 million in the United States and $3.7 million outside of the United States.

This is in part a function of the Company’s transfer pricing policies, which govern the allocation of taxable income and expenses among the Company’s various tax jurisdictions.

We identified the Company’s determination of transfer pricing policies as a critical audit matter.

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The primary procedures we performed to address this critical audit matter included:

• Utilizing personnel with specialized knowledge and skill in transfer pricing regulations to assist in evaluating (i) the Company’s transfer pricing policies, which is based on comparisons to comparable companies and precedents set by the various taxing authorities that govern the jurisdictions in which the Company operates, and (ii) jurisdictional profit margins to ensure that the Company’s intercompany transactions and other income allocation methodologies are appropriate and comply with the Company’s transfer pricing policies.

• Utilizing personnel with specialized knowledge and skill in transfer pricing regulations to assist in evaluating (i) the Company’s transfer pricing policies, which is based on comparisons to comparable companies and precedents set by the various taxing authorities that govern the jurisdictions in which the Company operates, and (ii) jurisdictional profit or loss margins to ensure that the Company’s intercompany transactions and other income and expense allocation methodologies are appropriate and comply with the Company’s transfer pricing policies.

/s/ BDO USA, P.C.

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Restricted cash 550 938

Accounts receivable, net of allowance of $1,278 and $973 in 2023 and 2022, respectively

Accounts receivable, net of allowance of credit losses of $935 and $1,278 in 2024 and 2023, respectively 19 91

Income tax receivable 737 465

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Property and equipment, net 2,858 4,147

Long-term restricted cash 718 476

Operating lease right-of-use assets 2,094 3,315

Other assets 2,644 3,751

Deferred tax assets, net 1,770 1,611

Long-term restricted cash 569 718

Total assets $ 36,056 $ 41,206

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current portion of finance leases $ 269 $ 61

Accounts payable 4,010 4,361

Accrued expenses 6,779 7,510

Commissions and incentives payable $ 8,642 $ 8,175

Accrued expenses 3,832 5,119

Deferred revenue 3,027 4,786

Accounts payable 2,070 4,010

Current portion of operating lease liabilities 1,178 1,660

Taxes payable 1,788 1,521

Current notes payable 84 240

Deferred revenue 4,786 5,106

Current portion of finance lease liabilities 275 269

Total current liabilities 20,896 25,780

Finance leases, excluding current portion 956 88

Long-term notes payable, excluding current portion 2,900 —

Operating lease liabilities, excluding current portion 1,576 2,582

Other long-term liabilities 1,390 1,404

Finance lease liabilities, excluding current portion 680 956

Total liabilities 27,442 30,722

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Selling and administrative expenses 41,722 50,241

Depreciation and amortization 1,628 1,627

Total operating expenses 90,031 103,829

Loss from operations ( 964 ) ( 405 )

Interest income 4 88

Other expense, net ( 170 ) ( 162 )

Loss before income taxes ( 1,130 ) ( 479 )

Income (loss) from operations 1,429 ( 964 )

Interest (expense) income, net ( 279 ) 4

Other income (expense), net 2,590 ( 170 )

Income (loss) before income taxes 3,740 ( 1,130 )

Income tax provision ( 1,250 ) ( 1,109 )

Net loss $ ( 2,239 ) $ ( 4,490 )

(Loss) per common share:

Net income (loss) $ 2,490 $ ( 2,239 )

Income (loss) per common share:

Basic $ 1.32 $ ( 1.20 )

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(in thousands)

Net loss $ ( 2,239 ) $ ( 4,490 )

Net income (loss) $ 2,490 $ ( 2,239 )

Other comprehensive loss, net of tax:

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capital Retained earnings (accumulated deficit) Accumulated

comprehensive

income (loss) Treasury

comprehensive loss Treasury

shareholders’

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Issuance of unrestricted shares 12,808 — ( 76 ) — — 299 223

Stock option exercises (cashless) 11,334 — ( 75 ) — — 75 —

Stock option exercises 2,000 — ( 35 ) — — 47 12

Repurchase of common stock ( 13,454 ) — — — — ( 176 ) ( 176 )

Disposition of foreign entity — — — — ( 23 ) — ( 23 )

Foreign currency translation — — — — ( 819 ) — ( 819 )

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Balance at December 31, 2023 1,860,154 $ — $ 33,309 $ ( 1,301 ) $ ( 1,015 ) $ ( 20,509 ) $ 10,484

Net loss — — — ( 2,239 ) — — ( 2,239 )

Payment of cash dividends — — — ( 748 ) — — ( 748 )

Net income — — — 2,490 — — 2,490

Charge related to stock-based compensation — — 91 — — — 91

Issuance of unrestricted shares 24,660 — ( 373 ) — — 573 200

Stock option exercises 2,000 — ( 35 ) — — 47 12

Repurchase of common stock ( 13,454 ) — — — — ( 176 ) ( 176 )

Foreign currency translation — — — — ( 4,653 ) — ( 4,653 )

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ ( 2,239 ) $ ( 4,490 )

Adjustments to reconcile net loss to net cash used in operating activities :

Net income (loss) $ 2,490 $ ( 2,239 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities :

Depreciation and amortization 1,534 1,628

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Provision for inventory losses 777 463

(Recovery of) Provision for doubtful accounts 519 ( 26 )

(Recovery of) Provision for credit losses ( 312 ) 519

Loss on disposal of assets 2 7

Gain on disposal of subsidiary ( 228 ) —

Unrealized loss (gain) from foreign exchange ( 3,257 ) —

Stock-based compensation expense 291 278

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Deferred revenue ( 1,729 ) ( 320 )

Net cash used in operating activities ( 2,370 ) ( 2,599 )

Net cash provided by (used in) operating activities 2,261 ( 2,370 )

CASH FLOWS FROM INVESTING ACTIVITIES:

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Proceeds from sale of assets 12 1

Cash used in investing activities ( 747 ) ( 1,063 )

Net cash used in investing activities ( 285 ) ( 747 )

CASH FLOWS FROM FINANCING ACTIVITIES:

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Payment of cash dividends — ( 748 )

Proceeds from notes payable 3,600 —

Repayment of finance lease obligations and other financing obligations ( 1,639 ) ( 991 )

Cash used in financing activities ( 1,903 ) ( 4,331 )

Net cash provided by (used in) financing activities 1,961 ( 1,903 )

Effect of currency exchange rate changes on cash and cash equivalents and restricted cash ( 809 ) ( 790 )

Decrease in cash and cash equivalents and restricted cash ( 5,810 ) ( 10,435 )

Increase (decrease) in cash and cash equivalents and restricted cash 3,128 ( 5,810 )

Cash and cash equivalents and restricted cash at the beginning of the year 9,387 15,197

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See accompanying notes to consolidated financial statements.

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

For the years ended December 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Income taxes paid, net $ 829 $ 2,551

Interest paid on finance leases and other financing obligations $ 475 $ 100

NON-CASH INVESTING AND FINANCING ACTIVITIES

Assets acquired through other financing arrangements $ 446 $ 739

Right of use assets acquired in exchange for new operating lease liabilities $ 305 $ 1,855

Operating lease right-of-use assets acquired in exchange for new operating lease liabilities $ 347 $ 305

Finance lease right-of-use assets acquired in exchange for new finance lease liabilities $ — $ 1,305

Treasury shares exchanged for stock options exercised $ — $ 75

See accompanying notes to consolidated financial statements.

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Mannatech, Incorporated (together with its subsidiaries, the “Company”), located in Flower Mound, Texas, was incorporated in the state of Texas on November 4, 1993, and is listed on The Nasdaq Global Select Market under the symbol “MTEX”.

The Company develops, markets, and sells high-quality, proprietary nutritional supplements, topical and skin care and anti-aging products, and weight-management products.

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(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, Hong Kong, and China).

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

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

Active business building associates ("independent associates" or "associates" or "distributors") and preferred customers purchase the Company’s products at published wholesale prices.

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Basis of Presentation

Certain prior year amounts have been reclassified on the Consolidated Statements of Operations to conform to the current year presentation.

Certain prior year amounts have been reclassified on the Consolidated Balance Sheets and Consolidated Statements of Operations to conform to the current year presentation.

These reclassifications had no effect on the previously reported results of operations.

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The foreign currency translation adjustment is recorded as a component of shareholders’ equity and is included in accumulated other comprehensive income.

Foreign currency transactio n losses t otaled approximately $ 0.2 million for each of the years ended December 31, 2023 and 2022, respectively, and are included in other expense, net in the Company’s consolidated statements of operations.

Foreign currency transactio n gains t otaled approximately $ 2.6 million for the year ended December 31, 2024 and foreign currency transactio n losses t otaled approximately $ 0.2 million for the year ended December 31, 2023, and are included in other income (expense), net in the Company’s consolidated statements of operations.

Cash and Cash Equivalents

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

Cash and cash equivalents was $ 7.7 million at December 31, 2023, as compared to $ 13.8 million as of December 31, 2022.

Cash and cash equivalents was $ 11.4 million and $ 7.7 million at December 31, 2024 and 2023, respectively.

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.

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

At December 31, 2023, a portion of our cash and cash equivalent balances were concentrated within the Republic of South Korea, with total net assets within this foreign location totaling $ 27.0 million.

In addition, for the year ended December 31, 2023, a concentrated portion of our operating cash flows were earned from operations within the Republic of South Korea.

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

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 $ 1.7 million at December 31, 2024 and 2023, respectively.

In addition, for the year ended December 31, 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.

Restricted Cash

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The Company classifies the restricted cash held in Korea and Australia as long-term since it relates to assets and services contracted for longer than one year.

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

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

December 31, 2024 December 31, 2023

Cash and cash equivalents at beginning of year $ 13,777 $ 24,185

Current restricted cash at beginning of year 944 944

Long-term restricted cash at beginning of year 476 503

Cash and cash equivalents and restricted cash at beginning of year $ 15,197 $ 25,632

Cash and cash equivalents at end of year $ 7,731 $ 13,777

Current restricted cash at end of year 938 944

Long-term restricted cash at end of year 718 476

Cash and cash equivalents and restricted cash at end of year $ 9,387 $ 15,197

Accounts Receivable

Cash and cash equivalents $ 11,396 $ 7,731

Current restricted cash 550 938

Long-term restricted cash 569 718

Cash, cash equivalents and restricted cash $ 12,515 $ 9,387

Accounts Receivable, net

Accounts receivable are carried at their estimated collectible amounts.

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

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

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

At December 31, 2023, 2022 and 2021, the Company's accounts receivable balances (net of allowance) were $ 0.1 million, $ 0.2 million and $ 0.1 million, respectively.

Upon adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

At December 31, 2024, 2023 and 2022, the Company's accounts receivable balances (net of allowance) were less than $0.1 million, $ 0.1 million and $ 0.2 million, respectively.

In accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), the Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues.

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The Company also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data.

At December 31, 2023 and 2022, the Company held an allowance of $ 1.3 million and $ 1.0 million, respectively.

Balance at Beginning of Year Charged to Expenses Deductions Balance at End of Year

Year Ended December 31, 2022

Allowance for doubtful accounts (000s) $ 987 $ ( 26 ) $ 12 $ 973

Year Ended December 31, 2023

Allowance for credit losses (000s) $ 973 $ 519 $ ( 214 ) $ 1,278

At December 31, 2024 and 2023, the Company held an allowance for credit losses of $ 0.9 million and $ 1.3 million, respectively.

December 31, 2024 December 31, 2023

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

(Reversal) provision in current period ( 312 ) 519

Accounts charged off against the allowance ( 31 ) ( 214 )

Allowance for credit losses at end of period $ 935 $ 1,278

Inventories consist of raw materials, finished goods, and promotional materials that are stated at the lower of cost (using standard costs that approximate average costs) or net realizable value.

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Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets were $ 1.8 million and $ 2.4 million at December 31, 2023 and 2022, respectively.

Included in the December 31, 2023 and 2022 balances were $ 1.1 million and $ 1.2 million in prepaid expenses, $ 0.3 million and $ 0.9 million for prepaid deposits, and $ 0.4 million and $ 0.3 million in prepaid inventory purchases, respectively.

Prepaid expenses and other current assets was $ 1.8 million at each of December 31, 2024 and 2023.

Included in the December 31, 2024 and 2023 balances were $ 1.1 million in prepaid expenses for each year, $ 0.2 million and $ 0.3 million for prepaid deposits, and $ 0.5 million and $ 0.4 million in prepaid inventory purchases, respectively.

Property and Equipment

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At December 31, 2024 and 2023, other assets were $ 2.6 million and $ 3.8 million, respectively.

The December 31, 2023 and 2022 balances include operating lease right of use assets of $ 3.3 million and $ 4.6 million, respectively.

See Note 5, Leases for more information.

Included in each of the December 31, 2023 and 2022 balances were deposits for building leases in various locations of $ 1.3 million.

Also included in the December 31, 2023 and 2022 balances were $ 2.2 million and $ 2.3 million, respectively, representing a deposit with Mutual Aid Cooperative and Consumer in the Republic of Korea, an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages.

The December 31, 2024 and 2023 balances include deposits for building leases in various locations of $ 1.1 million and $ 1.3 million, respectively.

Also included in the December 31, 2024 and 2023 balances were $ 1.3 million and $ 2.2 million, respectively, representing an investment in Korea Mutual Aid Cooperative and Consumer (“KMACC”), an organization established by the Republic of Korea’s Fair Trade Commission’s approval to compensate and protect consumers who participate in network marketing activities from damages.

Other assets at each of December 31, 2024 and 2023 also include $ 0.2 million of indefinite lived intangible assets relating to the Manapol ® powder trademark.

Notes Payable

Notes payable were $ 0.2 million and $ 0.3 million as of December 31, 2023 and December 31, 2022, respectively, as a result of funding from a capital financing agreement related to our investment in leasehold improvements, computer hardware and software and other financing arrangements.

Payments are made monthly according to the terms of the agreements which have a weighted average effective interest rate of 10.8 % and are collateralized by leasehold improvements and computer hardware and software.

At December 31, 2023 and 2022, the current portion was $ 0.2 million and $ 0.3 million, respectively.

Other Long-Term Liabilities

Other long-term liabilities were $ 4.0 million and $ 5.0 million at December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, we recorded long-term lease liabilities related to operating leases of $ 2.6 million and $ 4.2 million, respectively.

See Note 5, Leases for more information.

Other long-term liabilities was $ 1.4 million at each of December 31, 2024 and 2023.

Certain operating leases for the Company’s regional office facilities contain a restoration clause that requires the Company to restore the premises to its original condition.

At December 31, 2023, accrued restoration costs related to these leases amounted to $ 0.4 million.

At December 31, 2024 and 2023 , accrued restoration costs related to these leases amounted to $ 0.3 million and $ 0.4 million, respectively .

A s of December 31, 2024 and 2023, government mandated severance accruals in certain international offices amounted to $ 0.9 million and $ 0.8 million, respectively.

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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.

At December 31, 2023 and 2022, remaining performance obligations related to shipments were $1.4 million and $0.8 million, respectively.

During the third quarter of 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 Free on Board destination, so the Company recognized revenue upon delivery of the product to the customer.

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

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

These amounts are included in Deferred Revenue as of December 31, 2023 and 2022.

Orders placed by associates or preferred customers constitute our contracts.

These amounts are included in Deferred Revenue on the accompanying Consolidated Balance Sheets.

Orders placed by associates or preferred customers constitute our contracts with customers.

Product sales placed in the form of an automatic order contain two performance obligations:

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The transaction price is allocated between the product sale and the loyalty program on a relative standalone selling price basis.

Sales placed through a one-time order contain only the first performance obligation noted above - the sale of the product.

Sales placed through a one-time order contain only the first performance obligation noted above - the delivery of the product.

Payments are made immediately through credit card upon purchase of the products.

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With regard to both of the aforementioned contracts, the Company determines the standalone selling prices by using observable inputs which includes the Company’s standard published price lists.

O ur sales mix for the years ended December 31, was as follows (in millions, except percentages) :

Our sales mix for the years ended December 31, was as follows (in millions, except percentages) :

2024 Percentage 2023 Percentage

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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.

Deferred commissions were $ 1.3 million and $ 2.1 million at December 31, 2024 and 2023, respectively.

Products are generally received by customers three to five days after shipment.

Deferred Revenue

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Deferred revenue consisted of:

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

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

(ii) revenue from the loyalty program;

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and (iv) prepaid annual associate fees.

To defer product sales that have not been received by customers, the Company estimates order delivery dates using weighted averages of historical delivery data collected from its freight carriers.

During the third quarter of 2024, the Company changed its shipping terms with customers such that ownership transfers upon delivery to the freight carrier.

Previously, to defer product sales that had not been received by customers, the Company estimated order delivery dates using weighted averages of historical delivery data collected from its freight carriers.

The Company's deferred revenue balances related to product sales that have not been received by customers was $0 at December 31, 2024.

At December 31, 2024 and 2023, the Company’s deferred revenue was $ 3.0 million and $ 4.8 million, respectively.

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The deferred revenue amount of $ 5.1 million as of December 31, 2022 was recognized as revenue for the year ended December 31, 2023.

The Company's customer loyalty program conveys a material right to the customer as it p rovides the promise to redeem loyalty points for the purchase of products, which is based on earning points through placing consecutive qualified automatic orders.

The Company factors in breakage rates, which is the percentage of the loyalty points that are expected to be forfeited or expire, for purposes of revenue recognition.

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

The deferred revenue associated with the loyalty program at December 31, 2023 and December 31, 2022 was $ 3.2 million and $ 4.2 million, as follows:

The deferred revenue associated with the loyalty program at December 31, 2024 and 2023 was $ 2.9 million and $ 3.2 million, respectively, as follows:

Loyalty program (in thousands)

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The Company deems the sales refund and allowance liability to be a variable consideration.

Historically, our sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale.

Historically, sales returns have not materially changed through the years, as the majority of our customers who return their merchandise do so within the first 90 days after the original sale.

Sales returns have historically averaged 0.5 % or less of our gross sales.

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Sales returns reserve as of January 1, $ 41 $ 59

Provision related to sales made in current period 739 783

Adjustment related to sales made in prior periods 14 ( 4 )

Actual returns or credits related to current period ( 705 ) ( 730 )

Actual returns or credits related to prior periods ( 66 ) ( 45 )

Provision in current period 788 788

Returns charged off against the reserve ( 773 ) ( 806 )

Sales returns reserve as of December 31, $ 56 $ 41

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

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 product to the customer, not deemed to be separate performance obligations.

Commission and Incentive Expenses

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Educational and promotional items are sold to associates to assist in their sales efforts and are included in inventories and charged to cost of sales when sold.

Advertising and promotional expenses are included in selling and administrative expenses in the consolidated statements of operations.

Research and Development Expenses

The Company expenses research and development expenses as incurred.

Research and development expenses related to new product development, enhancement of existing products, clinical studies and trials, Food and Drug Administration compliance studies, general supplies, internal salaries, third-party contractors, and consulting fees were approximately $ 0.8 million and $ 1.0 million for the years ended December 31, 2023 and 2022, respectively.

Salaries and contract labor are included in selling and administrative expenses and all other research and development costs are included in selling and administrative expenses in the consolidated statements of operations.

million and $ 0.8 million for the years ended December 31, 2024 and 2023, respectively.

Salaries, contract labor and all other research and development costs are included in selling and administrative expenses in the consolidated statements of operations.

Stock-Based Compensation

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Costs incurred during the preliminary project along with post-implementation stages of internal use software are expensed as incurred.

During the years ended December 31, 2023 and 2022, the Company capitalized $ 0.3 million and $ 0.4 million of qualifying internal payroll costs, respectively.

During each of the years ended December 31, 2024 and 2023, the Company capitalized $ 0.3 million of qualifying internal payroll costs, respectively.

The Company amortizes such costs over the estimated useful life of the software, which is three to five years once the software is placed in service.

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The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision.

Net income/loss, before income tax, for U.S.

Net income/loss, before income tax and expense, for U.S.

and foreign entities is a function of the Company's transfer pricing policies, which govern the allocation of taxable income among the Company's various tax jurisdictions.

The Company is also subject to transfer pricing tax regulations designed to ensure the appropriate allocation of income between our U.S.

and foreign entities and that the Company

is taxed accordingly.

and foreign entities and that the Company is taxed accordingly.

The Company is subject to audit by federal, state and foreign tax authorities and inquiries from those tax authorities regarding the amount of taxes due.

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, Colombia, 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.

In the event that a subsidiary is disposed of, the Company recognizes cumulative translation adjustments of foreign exchange directly through retained earnings.

See Footnote 13, Shareholders Equity.

Recently Adopted Accounting Pronouncements

The Company adopted ASU 2016-13 as of January 1, 2023.

This new standard adds to U.S.

GAAP an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incurred losses.

Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the more timely recognition of losses.

Under the CECL model, entities estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument.

Measurement of expected credit losses are based on relevant forecasts that affect collectability.

The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures.

ASU 2016-13 only applies to our receivables from revenue transactions.

Under ASC 606, revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer.

At the point that trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses on trade receivables over their contractual life are required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts.

The Company adopted the accounting standard using the modified retrospective approach, as of January 1, 2023.

The cumulative effect upon adoption did not have a material impact on our consolidated financial statements.

Comprehensive Loss and Accumulated Other Comprehensive Loss

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 loss consists of the Company’s net income (loss), 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.

In the event that a subsidiary is disposed of, the Company recognizes cumulative translation adjustments of foreign exchange directly through other income (expense) in the consolidated statements of operations.

Concentration Risk

A significant portion of our revenue is derived from our Ambrotose, Ambrotose Life ® , TruHealth ™ , Manapol®, and Optimal Support Packets products.

A significant portion of our revenue is derived from our Ambrotose Life ® , TruHealth ™ , Ambrotose, and Optimal Support Packets products.

A decline in sales value of such products could have a material adverse effect on our earnings, cash flows, and financial position

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During the year ended December 31, 2024, the Company purchased finished goods from three suppliers that accounted for 54.6% of the year's cost of sales.

During the year ended December 31, 2022, the Company purchased finished goods from four suppliers that accounted for 60.1 % of the year's cost of sales.

During the year ended December 31, 2023, the Company purchased finished goods from three suppliers that accounted for 52.5% of the year's cost of sales.

The Company maintains other supply and manufacturing agreements to minimize exposure to supplier risk.

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See Note 2 to our Consolidated Financial Statements, Fair Value , for more information.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting

Improvements to Reportable Segment Disclosures.

This update enhances the current segment disclosure requirements by introducing additional disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss.

The Company adopted ASU 2023-07 effective for our fiscal year beginning January 1, 2024.

The adoption of ASU 2023-07 resulted in expanded segment disclosures for the Company.

Accounting Pronouncements Issued But Not Yet Effective

Segment Reporting (ASU 2023-07) — Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASC 2023-07”).

In November 2023, the FASB issued accounting guidance that requires incremental disclosures related to reportable segments which includes significant segment expense categories and amounts for each reportable segment.

The guidance is effective January 1, 2024, and will be adopted retrospectively.

The adoption will result in incremental disclosures related to reportable segments in the 2024 year-end financial statements and interim periods beginning in 2025.

The Company is currently evaluating the disclosure impacts of ASU 2023-07 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls.

Income Tax Reporting (ASU 2023-09) — Income Taxes (Topic 740):

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The Company is currently evaluating the disclosure impacts of ASU 2023-09 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls.

Income Statement Expenses (ASU 2024-03) — Income Statement (Subtopic 220-40) - Reporting Comprehensive Income - Expense Disaggregation Disclosures.

In November 2024, the FASB issued accounting guidance which is intended to improve expense disclosures, primarily by requiring disclosure of disaggregated information about certain income statement expense line items on an annual and interim basis.

The ASU does not change the expense captions an entity presents on the face of the income statement;

rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements.

ASU 2024-03 becomes effective January 1, 2027.

The Company is currently evaluating the disclosure impacts of ASU 2024-03 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls.

The Company utilizes fair value measurements to record fair value adjustments to certain financial assets and to determine fair value disclosures.

Fair Value Measurements (Topic 820) of the FASB establishes a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories:

Fair Value Measurements and Disclosure (Topic 820) of the FASB establishes a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories:

• Level 1—Quoted unadjusted prices for identical instruments in active markets.

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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 tables below present the recorded amount of financial assets measured at fair value (money market fund) on a recurring basis as of 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 December 31, 2022.

T he Company did not have any material financial liabilities that were required to be measured at fair value on a recurring basis at December 31, 2023 and 2022.

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

As of December 31, 2024 and 2023, the carrying amount of the financial instruments such as cash and cash equivalents (excluding money market funds disclosed in the tables below), restricted cash, long-term restricted cash and accounts payable approximate their fair value due to the short-term nature and the market rates of interest of these instruments.

As such, these instruments are classified as Level 1.

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

2024 Level 1 Level 2 Level 3 Total

Money Market Funds – JP Morgan, US $ 2,310 $ — $ — $ 2,310

Interest bearing deposits – various banks $ 1,084 $ — $ — $ 1,084

Total assets $ 3,394 $ — $ — $ 3,394

Amounts included in:

Cash and cash equivalents $ 2,310 $ — $ — $ 2,310

Restricted cash 674 — — 674

Long-term restricted cash 410 — — 410

Total $ 3,394 $ — $ — $ 3,394

Money Market Funds (included in Cash and cash equivalents) $ 4,005 $ — $ — $ 4,005

2023 Level 1 Level 2 Level 3 Total

Interest bearing deposits – various banks $ 3,855 $ — $ — $ 3,855

Total assets $ 3,855 $ — $ — $ 3,855

Amounts included in:

Cash and cash equivalents $ 3,014 $ — $ — $ 3,014

Restricted cash 680 — — 680

Long-term restricted cash 161 — — 161

Total $ 3,855 $ — $ — $ 3,855

Money Market Funds (included in Cash and cash equivalents) $ 2,310 $ — $ — $ 2,310

The following table below present the carrying amount and estimated fair value of financial instruments as of December 31, 2024 and 2023, (in thousands) that are not measured at fair value :

December 31, 2024 December 31, 2023

Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value

Investment in KMACC (included in Other assets) $ 1,255 $ 1,255 $ 1,423 $ 1,423

Long-term notes payable $ 2,900 $ 2,813 $ — $ —

As of December 31, 2024 and 2023 , the Company valued its investment in KMACC 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 carrying value of long-term notes payable approximates fair value and the fair value measurement is based on unobservable inputs, and as such, is classified as Level 3.

Inventories consist of raw materials, finished goods, and promotional materials.

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

The allowance for slow-moving and inventory obsolescence was $ 0.4 million at each of December 31, 2023 and 2022.

The allowance for slow-moving and inventory obsolescence was $ 0.6 million and $0.4 million at December 31, 2024 and 2023, respectively.

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

Raw materials $ 4,438 $ 5,104

Finished goods 9,431 11,424

Finished goods and promotional materials 5,967 9,431

Total inventory, net $ 10,405 $ 14,535

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Total $ 2,858 $ 4,147

For each of the years ended December 31, 2023 and 2022, depreciation and amortization expense remained constant at $ 1.6 million.

The Company leases office space and equipment from third-party lessors and accounts for leases in accordance with ASC Topic 842.

For the years ended December 31, 2024 and 2023, depreciation and amortization expense was $ 1.5 million and $ 1.6 million, respectively.

The Company has entered into contractual lease arrangements to rent office space and equipment from third-party lessors and accounts for leases in accordance with ASC Topic 842.

Right of use assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make future lease payments arising from the lease.

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There was no modification or impairment by entering into the sublease agreement because the Company was not released from its obligations under the head lease.

The Company earned $0.1 million and $0 sublease revenue for the year ended December 31, 2023 and 2022, respectively, which is presented as a component of net sales on the Company's Consolidated Statements of Operations.

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.

As of December 31, 2023 and 2022, our leased assets and liabilities consisted of the following (in thousands):

The Company earned $0.1 million sublease revenue for each of the years ended December 31, 2024 and 2023, which is presented as a component of net sales on the Company's Consolidated Statements of Operations.

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.

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

Leases Classification December 31, 2024 December 31, 2023

Right-of-use assets

Operating leases Other assets $ 3,315 $ 4,649

Operating leases Operating lease right-of-use assets $ 2,094 $ 3,315

Finance leases Property and equipment, net 961 1,236

Total leased assets $ 4,551 $ 4,831

Lease Liabilities

Current Portion

Operating leases Accrued expenses $ 1,660 $ 1,600

Total right-of-use assets $ 3,055 $ 4,551

Current portion of lease liabilities

Operating leases Current portion of operating leases $ 1,178 $ 1,660

Finance leases Current portion of finance leases 275 269

Long-Term Portion

Operating leases Other long-term liabilities 2,582 4,153

Long-term portion of lease liabilities

Operating leases Operating lease liabilities, excluding current portion 1,576 2,582

Finance leases Finance leases, excluding current portion 680 956

Total leased liabilities $ 5,467 $ 5,902

Total lease liabilities $ 3,709 $ 5,467

Operating lease costs are recognized on a straight-line basis over the lease term.

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Amortization of leased assets Depreciation and amortization 271 252

Interest on lease liabilities Interest expense 65 9

Interest on lease liabilities Interest (expense) income 69 65

Total lease cost $ 2,237 $ 2,459

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2028 268 90 ( 55 )

Thereafter — — —

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As of December 31, 2024 and 2023, accrued expenses consisted of the following (in thousands) :

Accrued asset purchases $ 861 $ 66

Accrued compensation $ 1,320 $ 1,707

Accrued royalties 38 41

Accrued sales and other taxes 201 290

Other accrued operating expenses 506 473

Accrued legal and accounting fees 823 865

Customer deposits and sales returns 480 515

Accrued travel expenses related to corporate events 131 834

Other accrued operating expenses 530 507

Accrued shipping and handling costs 306 291

Rent expense 3 —

Accrued legal and accounting fees 865 1,300

Current portion of operating lease liabilities 1,661 1,600

Accrued sales and other taxes 157 201

Accrued travel expenses related to corporate events 127 131

Accrued inventory purchases 45 861

Accrued royalties 39 38

Accrued rent expense 5 3

$ 3,832 $ 5,119

The components of the Company’s (loss) before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands) :

The components of the Company’s income (loss) before income taxes are attributable to the following jurisdictions for the years ended December 31 (in thousands) :

United States $ 1 $ ( 5,378 )

Foreign 3,739 4,248

(Loss) income before income taxes $ ( 1,130 ) $ ( 479 )

Income (loss) before income taxes $ 3,740 $ ( 1,130 )

The components of the Company’s income tax provision (benefit) for the years ended December 31 (in thousands) :

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Federal $ 158 $ 180

State 15 ( 37 )

Foreign 1,240 793

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Federal — ( 2 )

State ( 47 ) 10

Foreign ( 112 ) 113

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For the years ended December 31, 2024 and 2023, the Company’s effective tax rate was 33.4 % and ( 98.1 )%, respectively.

The Company's effective tax rate for the year ended December 31, 2023 differed from the statutory rate due to a mix of earnings across jurisdictions and the associated valuation allowance recorded on losses in certain jurisdictions.

The Company's effective tax rate for the year ended December 31, 2022 differed from the statutory rate due to additional taxes assessed as a result of the settlement of the income tax audit in Korea, the Company recording a valuation allowance on U.S.

deferred tax assets largely driven by changes in expected earnings mix between jurisdictions, and the relative impact of these items on decreased earnings.

The Company's effective tax rate for the years ended December 31, 2024 and 2023, differed from the statutory rate due to a mix of earnings across jurisdictions and the associated valuation allowance recorded on losses in certain jurisdictions.

A reconciliation of the Company’s effective income tax rate and the United States federal statutory income tax rate is summarized as follows, for the years ended December 31:

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Difference in foreign and United States tax on foreign operations 2.2 ( 0.7 )

Assessments from taxing authorities — ( 278.5 )

Permanent Difference 8.3 —

Effect of changes in valuation allowance ( 80.5 ) ( 46.4 )

Prior year Adj / Deferred Adj 1.0 —

State deferred tax ( 5.6 ) —

Global Intangible Low Taxed Income (GILTI) (1)

Credits generated — 7.9

Effect of changes in tax rates — 19.4

Changes in FTC 82.2 —

Foreign charitable contributions — ( 4.6 )

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Switzerland 5,427 425 2024-2030

Taiwan 2,274 455 2024-2032

United States - Federal 3,045 640 Indefinite

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Other - Foreign 2,633 542 Indefinite

foreign tax credit carryforwards of $ 3.3 million as of December 31, 2023, which will begin to expire in 2024.

foreign tax credit carryforwards of $ 0.2 million as of December 31, 2024.

The Company maintains a valuation allowance of $ 0.2 million against its foreign tax credit carryforwards.

At December 31, 2024 and 2023, the Company’s valuation allowance was $ 6.9 million and $ 10.3 million, respectively.

The net change in the valuation allowance for the years ended December 31, 2023 and 2022 was an increase of $ 0.5 million and $ 1.9 million, respectively.

The net change in the valuation allowance for the years ended December 31, 2024 and 2023 was a decrease of $ 3.4 million and an increase of $ 0.5 million, respectively.

The provisions of ASC Topic 740 require a company to record a valuation allowance when the “more likely than not” criterion for realizing a deferred tax asset cannot be met.

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Country 2024 2023

China $ — $ 0.4

Cyprus $ 0.2 $ 0.2

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Switzerland 0.3 0.3

Taiwan 0.4 0.6

Gibraltar 0.1 —

Thailand 0.1 —

United States 4.3 7.3

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TRANSACTIONS WITH RELATED PARTIES AND AFFILIATES

The Company made cash donations of $ 0.5 million and $ 0.6 million to the M5M Foundation for each of the years ended December 31, 2023 and December 31, 2022, respectively.

The Company issued an unsecured notes payable with an aggregate amount of $3.6 million to certain members of the Company's Board of Directors.

See Note 10, NOTES PAYABLE, for more information

The Company made cash donations of $ 0.4 million and $ 0.5 million to the M5M Foundation for the years ended December 31, 2024 and 2023, respectively.

The M5M Foundation is a 501(c)(3) charitable organization that works to combat the epidemic of childhood malnutrition on a global scale.

Several of the Company’s directors and officers and their family members serve on the board of the M5M Foundation, including:

• Al Bala, the Company’s CEO;

• Lorrie Jobe, daughter of Larry Jobe, a Director and Chair of the Audit Committee of the Board of Directors;

• Landen Fredrick, the Company's President and Chief Operating Officer and Interim Chief Financial Officer and son of J.

• Al Bala, the Company's CEO (until his retirement effective April 1, 2024)

• Landen Fredrick, the Company's Chief Executive Officer and son of J.

Stanley Fredrick, the Company’s Chairman of the Board and a major shareholder.

Effective June 7, 2023, Landen Fredrick was named President and Chief Operating Officer.

We paid employment compensation of approximately $ 330,000 and $ 477,000 for the years ended December 31, 2023 and 2022, respectively, for salary, bonus, auto allowance, and other compensation to Landen Fredrick.

• Lorrie Jobe, daughter of Larry Jobe, a Director and Chair of the Audit Committee of the Board of Directors.

Effective April 1, 2024, Landen Fredrick was named Chief Executive Officer.

We paid employment compensation of approximately $ 330,000 for each of the years ended December 31, 2024 and 2023, for salary, bonus, auto allowance, and other compensation to Landen Fredrick.

Fredrick also participated in the employee health care benefit plans available to all employees of the Company.

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Robbins and his family of approximately $ 1.9 million and $ 2.0 million, respectively.

The aggregate amount of commissions and incentives paid to Mr.

Robbins was approximately $ 0.2 million in each of 2023 and 2022.

The aggregate amount of commission and incentives expense in 2023 and 2022 to Mr.

Included in these amounts, the Company paid Mr.

Robbins approximately $ 0.2 million in each of 2024 and 2023.

The amount of commission and incentives paid in 2024 and 2023 to Mr.

Robbins' father, Ray Robbins, who holds positions in the Company's associate global downline network marketing system was approximately $ 1.7 million and $ 1.8 million, respectively.

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Robbins and his family members are in accordance with the Company’s global associate career and compensation plan.

Johanna Bala, the wife of Al Bala, the Company’s Chief Executive Officer, is an independent associate who earns commissions and incentives.

The aggregate amount of commission and incentives paid to Johanna Bala was approximately $ 0.1 million in each of 2023 and 2022.

The Company paid less than $ 0.1 million of commissions and incentives to other members of Al Bala's family in both years.

Johanna Bala, the wife of Al Bala, the Company’s former Chief Executive Officer, is an independent associate who earns commissions and incentives.

The aggregate amount of commission and incentives paid to Johanna Bala was less than $ 0.1 million for the period January 1, 2024 to March 31, 2024 and $0.1 million in 2023.

The Company paid less than $0.1 million of commissions and incentives to other members of Al Bala's family for the period January 1, 2024 to March 31, 2024 and in 2023.

As of April 1, 2024, Al Bala is no longer a related party.

All commissions and incentives paid to Al Bala's family members are in accordance with the Company’s global associate career and compensation plan.

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The Company’s matching contributions for its United States and Canada employees vest ratably over a five -year period.

During the years ended December 31, 2023 and 2022, the Company contributed approximately $ 0.2 million and $ 0.3 million to the 401(k) Plan for matching contributions, respectively.

During each of the years ended December 31, 2024 and 2023, the Company contributed approximately $ 0.2 million to the 401(k) Plan for matching contributions, respectively.

The Company also sponsors a non-U.S.

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Total expected benefits to be paid $ 280

NOTES PAYABLE

Notes payable were $ 3.0 million and $ 0.2 million as of December 31, 2024 and December 31, 2023, respectively.

The current portion was $ 0.1 million and $ 0.2 million at December 31, 2024 and 2023, respectively, 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 11.0 % and 10.8 % at December 31, 2024 and 2023, respectively.

Subsequent to the year ended December 31, 2024, the note reached maturity and was paid in full on February 1, 2025.

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

The long-term portion of notes payable was $ 2.9 million as of December 31, 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.

The note bears interest at 16% per annum and requires quarterly interest payments beginning June 30, 2024.

The note is due in full on September 30, 2026.

The Company has the right to prepay all or a portion of the Promissory Note at any time without premium or penalty.

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

As of December 31, 2024, there was no current portion and the long-term portion of the balance was $ 2.0 million.

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

Stanley Fredrick in the amount of $ 1.0 million.

The note bears interest at 16% per annum and requires quarterly interest payments beginning June 30, 2024.

The note is due in full on September 30, 2026.

The Company has the right to prepay all or a portion of the Promissory Note at any time without premium or penalty.

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

As of December 31, 2024, there was no current portion and the long-term portion of the balance was $ 0.8 million.

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

The note bears interest at 16% per annum and requires quarterly interest payments beginning June 30, 2024.

The note is due in full on September 30, 2026.

The Company has the right to prepay all or a portion of the Promissory Note at any time without premium or penalty.

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

As of December 31, 2024, there was no current portion and the long-term portion of the balance was $ 0.1 million.

As of December 31, 2024, the Company's future principal payments on notes payable were as follows (in thousands):

Principal Payments 2025 2026 Thereafter Total

Insurance Financing Notes $ 84 $ — $ — $ 84

Jade Capital Note — 2,014 — 2,014

Fredrick Note — 806 — 806

Robbins Note — 80 — 80

Total $ 84 $ 2,900 $ — $ 2,984

STOCK BASED COMPENSATION

Summary of Stock Option Plan

Stock Option Plan

The Company currently has one active stock-based compensation plan, the 2017 Plan, which was adopted by the Company’s Board of Directors on April 17, 2017 and was approved by its shareholders on June 8, 2017, and subsequently amended by the Board in February 2019, which was approved by the Company's shareholders on June 11, 2019.

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The majority of stock options vest over two or three years, and generally are granted with a term of ten years, or five years in the case of an incentive option granted to an employee who owns more than 10 % of our common stock.

A summary of changes in stock options outstanding during the year ended December 31, 2023, is as follows:

(in thousands) Weighted

price Weighted

contractual life

(in years) Aggregate

Outstanding at beginning of year 244 $ 17.35

Granted 5 12.58

Exercised ( 2 ) 5.72

Expired ( 12 ) 10.01

Outstanding at end of year 235 $ 17.73 3.47 $ —

Options exercisable at year end 228 $ 17.77 3.30 $ —

During 2023 and 2022, the Company issued 2,000 and 11,334 treasury shares upon the exercise of options and granted 5,000 and 11,807 new options to management and members of the Board, respectively.

Options exercised during the years ending December 31, 2023 and 2022 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price, of less than $ 0.1 million and $ 0.1 million, respectively.

Non-vested options at December 31, 2023 and 2022 were approximately 6,668 and 10,003 , respectively.

We grant stock options to our employees, board members, and consultants.

At the date of grant, we determine the fair value of a stock option award and recognize compensation expense over the requisite service period, or the vesting period of such stock option award, which is two or three years.

The Company is required to measure and recognize compensation expense related to any outstanding and unvested stock options in its consolidated financial statements using a fair-value based option-pricing model.

The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses.

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 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 each year:

Dividend yield:

6.4 % 2.6 - 3.9 %

Risk-free interest rate:

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

During 2024 and 2023, the Company issued 0 and 2,000 treasury shares upon the exercise of options and granted 16,167 and 5,000 new options to management and members of the Board, respectively.

Options exercised during the years ending December 31, 2024 and 2023 had a total intrinsic value, calculated as the difference between the exercise date stock price and the exercise price, $ 0 and less than $ 0.1 million, respectively.

The weighted-average grant-date fair value of stock options granted during the years ended December 31, 2024 and 2023 was $ 4.48 and $ 4.32 per share, respectively.

The total fair value of awards vested during each of the years ended December 31, 2023 and 2022 was $ 0.1 million.

The total fair value of options vested during each of the years ended December 31, 2024 and 2023 was $ 0.1 million.

A summary of changes in stock options outstanding during the year ended December 31, 2024, is as follows:

(in thousands) Weighted

price Weighted

contractual life

(in years) Aggregate

Outstanding at beginning of year 235 $ 17.73

Granted 16 7.70

Expired ( 101 ) 16.94

Outstanding at end of year 150 $ 17.19 4.26 $ 96,815

Options exercisable at year end 139 $ 17.91 3.85 $ 39,264

Valuation and Expense Information Under FASB ASC Topic 718 Compensation – Stock Compensation

The Company is required to measure and recognize compensation expense related to any outstanding and unvested stock options previously granted, and thereafter recognize, in its consolidated financial statements, compensation expense related to any new stock options granted after implementation using fair-value based on an option-pricing model.

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

Under the terms of the stock grant, the grant is available for 18 months and will not vest until Mannatech's stock price averages $15.00 per share (i.e., the volume weighted price) for 60 consecutive days.

If the contingency is not met within the 18-month period, the grant will lapse and will not be awarded.

The Company is required to measure and recognize compensation expense related to the grant in its consolidated financial statements using a fair-value based model.

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 $32 thousand for the year ended December 31, 2024.

A summary of changes in restricted stock units outstanding during the year ended December 31, 2024, is as follows:

(in thousands) Weighted

Outstanding at beginning of year — $ —

Granted 8,187 15.00

Outstanding at end of year 8,187 $ 15.00

The Company recorded the following amounts related to the expense of the fair values of options and RSUs during the years ended December 31, 2024 and 2023 (in thousands) :

Total gross compensation expense $ 92 $ 43

Total tax benefit associated with compensation expense ( 12 ) ( 10 )

Total net compensation expense $ 80 $ 33

If we grant additional stock options in the future, we would be required to recognize additional compensation expense over the vesting period of such stock options in our consolidated statement of operations.

As of December 31, 2023, we had 108,468 shares available for grant in the future.

The Company recorded the following amounts related to the expense of the fair values of options during the years ended December 31, 2023 and 2022 (in thousands) :

Selling, general and administrative expenses and income from operations before income taxes $ 43 $ 78

Benefit for income taxes ( 10 ) ( 18 )

Effect on net income $ 33 $ 60

As of December 31, 2023, the Company had less than $ 0.1 million of total unrecognized compensation expense related to stock options currently outstanding, to be recognized in future years over a weighted-average period of 0.95 years , ending December 31, as follows (in thousands):

Total gross unrecognized

compensation expense Total tax benefit associated

with unrecognized

compensation expense Total net

compensation expense

2024 $ 18 $ 4 $ 14

$ 21 $ 5 $ 16

As of December 31, 2024, the Company had $ 0.1 million of total unrecognized compensation expense related to stock options and RSUs currently outstanding, to be recognized in future years over a weighted-average period of 0.95 years, ending December 31, as follows (in thousands):

Years ending December 31,

Total gross unrecognized compensation expense $ 51 $ —

Equity-Based Compensation

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

For the years ended December 31, 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 years 2024 and 2023 .

COMMITMENTS AND CONTINGENCIES

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As of December 31, 2024, the Company is required to purchase an aggregate of $ 1.1 million through 2025.

Failure to satisfy minimum purchase requirements could result in the loss of exclusivity.

Royalty and Consulting Agreements

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If the employment relationships with these executives were terminated, as of December 31, 2024, the Company would continue to be indebted to the executives for $ 0.5 million , payable through 2025.

On March 13, 2024, the Company announced the retirement of Alfredo (Al) Bala as the Company’s Chief Executive Officer effective April 1, 2024 and the engagement of Mr.

Bala as an advisor to the Company effective April 1, 2024.

At December 31, 2024, the remaining balance of his severance was $ 0.3 million, payable over the next 15 months.

Litigation in General

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The timing, manner, price and amount of any repurchases, as well as the capital resources to fund the repurchases, are determined by the Company, in its discretion, and depends on a variety of factors, including legal requirements, price and economic and market conditions.

During the year ended December 31, 2023, the Company repurchased 13,454 shares of its common stock, at an average price of $ 13.06 .

During the year ended December 31, 2024, there were no shares repurchased.

During the year ended December 31, 2023, the Company repurchased 13,454 shares of its common stock, at an average price of $ 13.06 .

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The Company does not have any stock repurchase plans or programs other than the June 2004 Plan and the August 2006 Plan.

As of December 31, 2024 and 2023, the Company had 858,043 and 882,703 treasury shares, respectively.

Voting rights

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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 years ended December 31, 2023 and 2022, the Company paid dividends of $.20 per share to holders of our Common Stock in the amount of $ 0.7 million and $ 1.5 million, respectively.

Equity-Based Compensation

For the years ended December 31, 2023 and 2022, the Company issued a total of 12,808 and 6,072 treasury shares to the members of the Board as a part of their compensation, respectively .

The share grants to the Board were vested upon grant and the Company recognized $ 0.2 million for each of the years 2023 and 2022 .

For the year ended December 31, 2024, no dividends were paid.

For the year ended December 31, 2023, the Company paid dividends of $ 0.20 per share to holders of our Common Stock in the amount of $ 0.7 million.

Accumulated Other Comprehensive Income

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Current-period change before reclassifications ( 819 ) — ( 819 )

Disposition of foreign entity ( 23 ) — ( 23 )

Amounts reclassified from accumulated other comprehensive income (loss) — 18 18

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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.

For the year ended December 31, 2023, shares of 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 year ended December 31, 2023.

In determining the potential dilutive effect of outstanding stock options for the years ended December 31, 2024 and 2023, the Company used the average common stock close price of $ 8.27 and $ 12.81 per share, respectively.

For the year ended December 31, 2024, there were 1.89 million weighted-average common shares outstanding used for the basic EPS calculation.

For the year ended December 31, 2024, 8,187 restricted share units was granted (see Note 11, 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, 143,974 shares underlying stock options were excluded from the diluted EPS calculation, as their effect would have been antidilutive.

For the year ended December 31, 2023, shares of the Company's common stock subject to options were excluded from the diluted EPS calculations as their effect would have been antidilutive.

The Company reported a net loss for the year ended December 31, 2023.

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

Years Ended December 31,

Net income (loss) attributable to common stockholders $ 2,490 $ ( 2,239 )

Weighted average common shares outstanding (for basic calculation) 1,885 1,866

Dilutive effect of outstanding common stock options and RSU’s — —

Weighted average common and common equivalent shares outstanding 1,885 1,866

EPS - Basic $ 1.32 $ ( 1.20 )

EPS - Diluted $ 1.32 $ ( 1.20 )

SEGMENT INFORMATION

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We primarily sell our products through a network marketing distribution channel of approximately 133,000 active associates and preferred customer positions who we refer to as current associates and preferred customers.

Our subsidiary in China, Meitai, is currently operating as a traditional retailer under a cross-border e-commerce model.

The Company's subsidiary in China, Meitai, is currently operating as a traditional retailer under a cross-border e-commerce model.

Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China.

Our subsidiary, NEMO, operates an affiliate business model under the brand name, “Trulu,” in the United States.

The Company's subsidiary, NEMO, operated an affiliate business model under the brand name, “Trulu,” in the United States.

We ceased operating Trulu in July 2024.

Each of our subsidiaries sells similar products and exhibits similar economic characteristics, such as selling prices, paying commissions and incentives, gross margins and operating characteristics.

The Chief Operating Decision Maker (“CODM”) is the Company’s Chief Executive Officer.

The CODM regularly reviews consolidated financial information and performance used to make decisions about the Company as a whole and without distinguishing or grouping of operations based on asset type, revenue, geographic location, tenant or other factors.

Accordingly, for disclosure purposes, the Company has a single reportable segment, which is reported on the Company’s consolidated financial statements.

The CODM evaluates performance and allocates resources based on net income as reported in the consolidated statements of operations.

Total expenditures for long-lived assets are reported on the consolidated statements of cash flows.

Measure of total assets is consistent with the amounts reported on the consolidated balance sheet.

The CODM reviews consolidated net income to evaluate income generated from assets (return on assets) in deciding whether to reinvest profits to grow the property portfolio or deploy income into other aspects of the Company, such as to repay debt, buy back common stock under the share repurchase program or pay dividends.

We review and analyze net sales by geographical location and by products and packs on a consolidated basis.

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(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, Taiwan, Hong Kong, Thailand and China).

We also ship our products to customers in the following countries:

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Consolidated net sales shipped to customers in these regions, along with pack and product information for the years ended December 31, are as follows (in millions, except percentages) :

Product sales from network marketing $ 125.3 $ 130.2

Pack sales 5.6 6.2

Product sales $ 112.3 $ 125.3

Pack sales and associate fees 4.1 5.6

Other 1.5 1.1

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Total $ 10.4 $ 14.5

The following table presents the Company's segment revenue, segment expenses and segment income (loss) for the years ended December 31, 2024 and 2023 ( in thousands):

For the years ended December 31,

Net Sales $ 117,866 $ 131,955

Cost of sales 26,406 29,090

Commissions and incentives 48,309 53,588

Human Resources 18,055 21,334

Distribution and warehouse 2,468 2,505

Selling and administrative expenses 19,665 24,774

Depreciation and amortization 1,534 1,628

Interest expense 475 100

Interest income ( 196 ) ( 104 )

Other (income) expense ( 2,590 ) 170

Income tax provision 1,250 1,109

Segment net income (loss) $ 2,490 $ ( 2,239 )

Reconciliation of profit or loss

Adjustments and reconciling items — —

Consolidated net income (loss) $ 2,490 $ ( 2,239 )

SUBSEQUENT EVENTS

Unsecured Promissory Note

On March 11, 2024, the Company’s Board of Directors authorized the Company to enter into unsecured Loan and Promissory Note agreements (“Prom Notes”) with certain related parties, three of which are members of the Company’s Board of Directors, and all of which are current stockholders of the Company, in an aggregate principal amount of approximately $3.6 million.

The purpose of the borrowing is to provide funds to the Company for general working capital needs, including payment to vendors, expansion of the Company’s non-US operations, technology investment primarily for improving the customer ordering process and software updates to improve visibility of sales associate activity.

Pursuant to the terms of the Prom Notes, the financing includes a 30-month unsecured note, and certain other terms customarily included in similar debt financing arrangements.

The Company has the right to prepay all or a portion of the Prom Notes at any time without premium or penalty.

A third party has been engaged to evaluate and provide a fairness opinion on the transaction and its related terms.

The Company intends to complete the financing immediately following the receipt of such fairness opinion.

CEO Severance Agreement

On March 13, 2024, the Company announced the retirement of Alfredo (Al) Bala as the Company’s Chief Executive Officer effective April 1, 2024 and the engagement of Mr.

Bala as an advisor to the Company effective April 1, 2024.

Per the terms of Mr.

Bala’s employment agreement he is entitled to one year severance of $0.4 million.

Notes Payable

Subsequent to the year ended December 31, 2024, the current portion of notes payable related to insurance financing arrangements reached maturity and was paid in full on February 1, 2025.

List of Subsidiaries

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10.Mannatech (International) Limited

11.Mannatech, Incorporated Malaysia Sdn.

12.Mannatech Singapore Pte.

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19.Mannatech Swiss International GmbH

20.Mannatech Malaysia Trading Co.

21.Mannatech Norge A/S

22.Mannatech Sverige AB

23.MTEX Mexico SRL CV

21 unchanged sentences

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alfredo Bala, certify that:

I, Landen Fredrick, certify that:

I have reviewed this annual report on Form 10-K of Mannatech, Incorporated;

2 unchanged sentences

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 25, 2025

/s/ Alfredo Bala

/s/ Landen Fredrick

Landen Fredrick

Chief Executive Officer

4 unchanged sentences

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Landen Fredrick, certify that:

I, James Clavijo, certify that:

I have reviewed this annual report on Form 10-K of Mannatech, Incorporated;

2 unchanged sentences

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 25, 2025

/s/ Landen Fredrick

Landen Fredrick

Chief Operating Officer and Interim Chief Financial Officer

/s/ James Clavijo

James Clavijo

Chief Financial Officer

(principal financial officer)

3 unchanged sentences

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Mannatech, Incorporated (the “Company”) on Form 10-K for the period ending December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alfredo Bala, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C.

In connection with the Annual Report of Mannatech, Incorporated (the “Company”) on Form 10-K for the period ending December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Landen Fredrick, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

2 unchanged sentences

March 25, 2025

/s/ Alfredo Bala

/s/ Landen Fredrick

Landen Fredrick

Chief Executive Officer

5 unchanged sentences

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Mannatech, Incorporated (the “Company”) on Form 10-K for the period ending December 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Landen Fredrick, Chief Operating Officer of the Company, hereby certify, pursuant to 18 U.S.C.

In connection with the Annual Report of Mannatech, Incorporated (the “Company”) on Form 10-K for the period ending December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Clavijo, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

2 unchanged sentences

March 25, 2025

/s/ Landen Fredrick

Landen Fredrick

Chief Operating Officer and Interim Chief Financial Officer

/s/ James Clavijo

James Clavijo

Chief Financial Officer

(principal financial officer)

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Deducted from asset accounts:

Allowance for doubtful accounts $ 987 ( 26 ) — 12 $ 973

Allowance for credit losses $ 973 519 — ( 214 ) $ 1,278

Allowance for obsolete inventories $ 417 463 — ( 460 ) $ 420

10 unchanged sentences

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-K

Item 9A. Controls and Procedures