What changed in this filing

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Item 1. Financial Statements

2025-05-13 compared with 2024-11-12 · 165 added, 220 removed, 478 unchanged (45% of the section changed)

3 unchanged sentences

(in thousands, except share and per share amounts)

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

ASSETS March 31, 2025 December 31, 2024

Cash and cash equivalents $ 9,323 $ 11,396

30 unchanged sentences

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

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

Common stock, $0.0001 par value, 99,000,000 shares authorized, 2,742,857 shares issu ed and 1,900,930 s hares outstanding as of March 31, 2025 and 2,742,857 shares issued and 1,884,814 shares outstanding as of December 31, 2024

Additional paid-in capital 32,916 33,027

Accumulated deficit ( 1,073 ) ( 1,301 )

(Accumulated deficit) retained earnings ( 341 ) 1,189

Accumulated other comprehensive loss ( 5,428 ) ( 5,666 )

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

Treasury stock, at average cost, 841,927 s hares as of March 31, 2025 and 858,043 shares as of December 31, 2024

( 19,562 ) ( 19,936 )

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net sales $ 26,563 $ 29,393

5 unchanged sentences

Total operating expenses 20,569 22,277

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

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

(Loss) income from operations ( 833 ) 820

Interest (expense) income, net ( 73 ) 18

Other (expense) income, net ( 418 ) 871

(Loss) income before income taxes ( 1,324 ) 1,709

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

Income tax expense ( 206 ) ( 529 )

Net (loss) income $ ( 1,530 ) $ 1,180

9 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net (loss) income $ ( 1,530 ) $ 1,180

Foreign currency translations 238 ( 1,431 )

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

Comprehensive loss $ ( 1,292 ) $ ( 251 )

See accompanying notes to unaudited condensed consolidated financial statements.

9 unchanged sentences

Balance at January 1, 2025 1,884,814 $ — $ 33,027 $ 1,189 $ ( 5,666 ) $ ( 19,936 ) $ 8,614

Net income — — — 1,180 — — 1,180

Net loss — — — ( 1,530 ) — — ( 1,530 )

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

2 unchanged sentences

Balance at March 31, 2025 1,900,930 $ — $ 32,916 $ ( 341 ) $ ( 5,428 ) $ ( 19,562 ) $ 7,585

Net loss — — — ( 624 ) — — ( 624 )

Charge related to stock-based compensation — — 34 — — — 34

Foreign currency translations — — — — ( 1,656 ) — ( 1,656 )

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

Net loss — — — ( 328 ) — — ( 328 )

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

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

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

Common Stock, $0.0001 par value

Number of Shares Amount Additional

capital Retained earnings Accumulated

capital Accumulated deficit Accumulated

comprehensive

3 unchanged sentences

Net income — — — 1,180 — — 1,180

Payment of cash dividends — — — ( 375 ) — — ( 375 )

Charge related to stock-based compensation — — 12 — — — 12

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

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

Foreign currency translations — — — — ( 1,431 ) — ( 1,431 )

Balance at March 31, 2024 1,884,814 $ — $ 32,948 $ ( 121 ) $ ( 2,446 ) $ ( 19,936 ) $ 10,445

Net loss — — — ( 1,105 ) — — ( 1,105 )

Payment of cash dividends — — — ( 373 ) — — ( 373 )

Charge related to stock-based compensation — — 17 — — — 17

Repurchase of common stock ( 7,396 ) — — — — ( 98 ) ( 98 )

Foreign currency translations — — — — ( 651 ) — ( 651 )

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

Net income — — — 18 — — 18

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

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

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) $ 228 $ ( 483 )

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

Net (loss) income $ ( 1,530 ) $ 1,180

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

Depreciation and amortization 293 416

2 unchanged sentences

Provision for (reversal of) allowance for credit losses ( 96 ) ( 75 )

Loss on retirement of property and equipment 253 7

Gain on disposal of subsidiary entity ( 226 ) —

Unrealized gain from foreign exchange 328 —

14 unchanged sentences

Deferred revenue ( 716 ) ( 551 )

Net cash provided by (used in) operating activities 2,480 ( 1,049 )

Net cash (used in) provided by operating activities ( 1,368 ) 1,874

CASH FLOWS FROM INVESTING ACTIVITIES:

2 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from stock options exercised — 12

Repurchase of common stock — ( 176 )

Payment of cash dividends — ( 748 )

Proceeds from notes payable 3,600 —

Repayment of note payable ( 84 ) ( 161 )

Repayment of finance lease obligations and other long-term liabilities ( 82 ) ( 89 )

Net cash provided by (used in) financing activities 2,866 ( 1,629 )

Cash used in financing activities ( 166 ) ( 250 )

Effect of currency exchange rate changes on cash and cash equivalents ( 49 ) ( 1,408 )

Net increase (decrease) in cash, cash equivalents, and restricted cash 4,337 ( 5,510 )

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 2,072 ) 155

Cash, cash equivalents, and restricted cash at the beginning of the period 12,515 9,387

1 unchanged sentence

See accompanying notes to unaudited condensed consolidated financial statements.

Nine Months Ended

September 30,

Three Months Ended

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

4 unchanged sentences

Operating lease right-of-use assets acquired in exchange for new operating lease liabilities $ 242 $ 205

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

See accompanying notes to unaudited condensed consolidated financial statements.

7 unchanged sentences

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

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

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

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Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2024 included in our 2024 Annual Report.

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

There have been no significant changes in our accounting policies or the application thereof during the first quarter of 2025.

MANNATECH, INCORPORATED AND SUBSIDIARIES

1 unchanged sentence

Basis of Presentation

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

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

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

1 unchanged sentence

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

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

Cash and cash equivalents was $ 9.3 million at March 31, 2025 and $ 11.4 million at December 31, 2024.

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

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

At each of March 31, 2025 and December 31, 2024, credit card receivables were $ 1.6 million, and cash and cash equivalents held in bank accounts in foreign countries totaled $ 3.8 million and $ 5.1 million at March 31, 2025 and December 31, 2024, respectively.

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

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

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

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

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

Restricted Cash

3 unchanged sentences

and (iii) the Australia building lease collateral.

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

At each of March 31, 2025 and December 31, 2024, our total restricted cash was $ 1.1 million.

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

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

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 9,323 $ 11,396

5 unchanged sentences

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

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

As of March 31, 2025 and December 31, 2024, receivables consisted primarily of amounts due from preferred customers and associates.

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

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

March 31, 2025 December 31, 2024

Accounts receivable, net

$ 22 $ 91 $ 218

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

5 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2024 September 30, 2023

At March 31, 2025 and March 31, 2024, the Company held an allowance for credit losses of $ 0.9 million and $ 1.2 million, respectively.

March 31, 2025 March 31, 2024

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

5 unchanged sentences

Other Assets consisted of the following (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Investment in Korea Mutual Aid Cooperative & Consumer $ 1,257 $ 1,255

9 unchanged sentences

Accrued expenses consisted of the following (in thousands):

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Accrued compensation $ 1,333 $ 1,320

14 unchanged sentences

S ee Note 9, Employee Benefit Plans , of the Company’s 2024 Annual Report for more information.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Government required severance $ 892 $ 853

6 unchanged sentences

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

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

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

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

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

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

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 ("FOB") 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 each of March 31, 2025 and December 31, 2024.

The Company's remaining performance obligations related to associate fees were $ 0.1 million at both March 31, 2025 and December 31, 2024.

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

16 unchanged sentences

Deferred revenue consisted of:

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

(ii) revenue from the loyalty program;

(iii) prepaid registration fees from customers planning to attend a future corporate-sponsored event;

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.

(i) revenue from the loyalty program;

(ii) prepaid registration fees from customers planning to attend a future corporate-sponsored event;

and (iii) prepaid annual associate fees.

The table below presents the changes to deferred revenue balances (in thousands) .

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Total deferred revenue at beginning of the period $ 3,027 $ 4,786

Amount recognized as revenue during the period $ ( 1,836 ) ( 1,338 ) ( 4,747 ) ( 5,055 )

New deferrals at the end of the period $ 702 957 2,979 3,898

Amount recognized as revenue during the period that is included in beginning of the period ( 1,536 ) ( 3,733 )

New deferrals at the end of the period, net 831 3,182

Total deferred revenue at end of the period $ 2,322 $ 4,235

4 unchanged sentences

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

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

The deferred revenue associated with the loyalty program at each of March 31, 2025 and March 31, 2024 was $ 2.2 million and $ 3.1 million, respectively.

Three Months Ended

September 30, Nine Months Ended

September 30,

Loyalty program (in thousands)

2024 2023 2024 2023

Loyalty deferred revenue at beginning of the period $ 2,921 $ 3,242

9 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Deferred commissions at beginning of the period $ 1,259 $ 2,130

9 unchanged sentences

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

September 30, 2024 September 30, 2023

March 31, 2025 March 31, 2024

Sales reserve at beginning of period $ 56 $ 41

11 unchanged sentences

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

Comprehensive Income (Loss) and Accumulated Other Comprehensive Income

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

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

Accounting Pronouncements Issued but Not Yet Effective

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of implementing this guidance but does not expect adoption to have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures.

The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of implementing this guidance on its consolidated financial statements.

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

Improvements to Income Tax Disclosures(“ASC 2023-09”).

In December 2023, the FASB issued accounting guidance to expand the annual disclosure requirements for income taxes, primarily related to the rate reconciliation and income taxes paid.

This guidance is effective January 1, 2025, with early adoption permitted.

This guidance can be applied prospectively or retrospectively.

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.

Other recently issued accounting pronouncements did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

1 unchanged sentence

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

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

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

September 30, 2024 December 31, 2023

The allowance for slow-moving inventory obsolescence was $ 0.3 million and $ 0.6 million at March 31, 2025 and December 31, 2024, respectively.

Inventories as of March 31, 2025 and December 31, 2024, consisted of the following (in thousands) :

March 31, 2025 December 31, 2024

Raw materials $ 4,215 $ 4,438

Finished goods 6,550 9,431

Finished goods and promotional materials 7,605 5,967

Total $ 11,820 $ 10,405

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

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

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

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

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2025 and 2024, the Company’s effective tax rate was ( 15.1 )% and 36.0 %, respectively.

For the three months ended March 31, 2025 and 2024, the Company's effective tax rate was determined based on the estimated annual effective income tax rate.

The effective tax rate for the three months ended March 31, 2025 and March 31, 2024, was different from the federal statutory rate due to the mix of earnings across jurisdictions and the associated valuation allowances recorded on losses in certain jurisdictions.

NOTES PAYABLE

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

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

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

Notes payable were $ 2.9 million and $ 3.0 million as of March 31, 2025 and December 31, 2024, respectively.

The current portion was $ 0 and $ 0.1 million at March 31, 2025 and December 31, 2024, respectively, as a result of insurance financing arrangements.

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

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

There were no unsecured notes at December 31, 2023.

The long-term portion of notes payable was $ 2.9 million at each of March 31, 2025 and December 31, 2024.

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

3 unchanged sentences

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

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

As of March 31, 2025, 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.

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

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

As of March 31, 2025, 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.

3 unchanged sentences

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

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

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

As of March 31, 2025, there was no current portion and the long-term portion of the balance was $0.1 million.

As of March 31, 2025, the Company's future principal payments on notes payable were as follows (in thousands):

Principal Payments Remaining 2025 2026 Thereafter Total

Insurance Financing Notes $ 124 $ 84 $ — $ — $ 208

Jade Capital Note $ — $ 2,014 $ — $ 2,014

6 unchanged sentences

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

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

As of March 31, 2025, the Company had a total of 101,188 shares available for grant under the 2017 Plan, which expires on April 16, 2027.

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

6 unchanged sentences

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

The Black-Scholes option-pricing model

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The 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:

June 2024 Grant July 2024 Grant

March 2025 Grant

Estimated fair value per share of options granted:

$ 4.67 $ 4.00

Annualized dividend yield — %

4 unchanged sentences

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

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

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

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

During the three months ended March 31, 2025, the Company granted 3,000 stock options.

The weighted average fair value of stock options granted during the three months ended March 31, 2025 was approximately $ 5.51 .

The Company granted no stock options during the three months ended March 31, 2024.

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.

2 unchanged sentences

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

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

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

Accordingly, the Company has recognized compensation expense related to the grant of $10 thousand and $3 thousand for the three months ended March 31, 2025 and 2024, respectively.

The Company recognized compensation expense related to the fair values of options and RSUs as follows for the three months ended March 31 (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Total gross compensation expense $ 22 $ 92

1 unchanged sentence

Total net compensation expense $ 21 $ 80

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

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2025, the Company expects to record compensation expense related to stock options and RSUs in the future as follows (in thousands) :

2025 Years ending December 31,

2 unchanged sentences

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

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

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

For the three months ended March 31, 2025 and 2024, the Company issued a total of 16,116 and 24,660 shares of 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 three months ending March 31, 2025 and 2024.

MANNATECH, INCORPORATED AND SUBSIDIARIES

2 unchanged sentences

Treasury Stock

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

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

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

There were no shares repurchased during each of the three months ended March 31, 2025 and 2024.

As of March 31, 2025 and December 31, 2024 , the Company had 841,927 and 858,043 treasury s hares, respectively.

Accumulated Other Comprehensive Loss

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Current-period change (1)

( 982 ) — ( 982 )

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

Balance as of March 31, 2025 $ ( 5,842 ) $ 414 $ ( 5,428 )

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

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

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

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

For each of the three months ended March 31, 2025 and 2024, the Company did not pay any dividends.

Litigation in General

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

As of March 31, 2025, the Company had no open or pending litigation and no legal reserve was deemed necessary.

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

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The Company accrues costs to defend itself from litigation as they are incurred.

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

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

As of March 31, 2025 and December 31, 2024, all of the Company’s finance leases pertain to certain equipment used in the business.

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

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

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

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

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

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

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

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

For each of the three months ended March 31, 2025 and 2024, the Company had earned less than $ 0.1 million income from the sublease.

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2025, the Company had net operating lease right-of-use assets of $ 2.0 million and net finance lease right-of-use assets of $ 0.9 million.

At March 31, 2025, our operating lease liabilities were $ 2.5 million and our finance lease liabilities were $ 0.9 million.

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of March 31, 2025 were 2.77 years and 5.0 %, respectively.

The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of March 31, 2025 were 2.96 years and 6.5 %, respectively.

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

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

Leases Classification September 30, 2024 December 31, 2023

As of March 31, 2025 and December 31, 2024 our right-of-use assets and lease liabilities balances, net of accumulated amortization, were as follows (in thousands) :

Leases Classification March 31, 2025 December 31, 2024

Right-of-use assets

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Long-term portion of lease liabilities

Operating leases Operating lease liabilities 1,787 2,582

Operating leases Operating lease liabilities, excluding current portion 1,548 1,576

Finance leases Finance leases, excluding current portion 609 680

Total lease liabilities $ 3,417 $ 3,709

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

As of March 31, 2025, the Company ’ s future sublease income and minimum future lease payments on operating and finance leases were as follows (in thousands) :

Future Maturities of Leases Operating Leases Finance Leases Sublease Income

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2028 281 90 ( 55 )

2028 268 90 ( 55 )

Total minimum lease payments 2,742 977 ( 418 )

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

Fair Value Measurements and Disclosure (Topic 820) of the Financial Accounting Standards Board (“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 Company does not have any material financial liabilities that were required to be measured at fair value on a recurring basis at September 30, 2024.

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

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

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

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

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

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

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

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

September 30, 2024

The Company does not have any material financial liabilities that were required to be measured at fair value on a recurring basis at March 31, 2025.

As of March 31, 2025 and December 31, 2024, the carrying amount of the financial instruments such as cash and cash equivalents (excluding money market funds disclosed in the table below), restricted cash, long-term restricted cash and accounts payable approximate their fair value due to short-term nature and the market rates of interest of these instruments.

As such, these instruments are classified as Level 1.

The tables below present the recorded amount of financial assets measured at fair value (in thousands) on a recurring basis as of March 31, 2025 and December 31, 2024.

March 31, 2025

Level 1 Level 2 Level 3 Total

Money Market Funds – JPMorgan Chase, US $ 3,603 $ — $ — $ 3,603

Interest bearing deposits – various banks 1,082 — — 1,082

Total assets $ 5,414 $ — $ — $ 5,414

Amounts included in Assets:

Cash and cash equivalents $ 4,332 $ — $ — $ 4,332

Restricted cash 675 — — 675

Long-term restricted cash 407 — — 407

Total $ 5,414 $ — $ — $ 5,414

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

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

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

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Money Market Funds – JPMorgan Chase, US $ 4,005 $ — $ — $ 4,005

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

Total assets $ 3,394 $ — $ — $ 3,394

Amounts included in Assets:

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

Restricted cash 674 — — 674

Long-term restricted cash 410 — — 410

Total $ 3,394 $ — $ — $ 3,394

The following table below present the carrying amount and estimated fair value of financial instruments as of March 31, 2025 and December 31, 2024, (in thousands) that are not measured at fair value:

March 31, 2025

Carrying Value Estimated Fair Value

Long-term notes payable $ 2,900 $ 2,812

December 31, 2024

Carrying Value Estimated Fair Value

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

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.

MANNATECH, INCORPORATED AND SUBSIDIARIES

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

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

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.

Management reviews and analyzes 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, Hong Kong, Taiwan and China).

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

It also ships products to customers in the following countries:

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

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

Consolidated net sales shipped to customers in these regions, along with pack or associate fee and product information for the three months ended March 31, were as follows (in millions, except percentages) :

Three Months Ended

September 30, Nine Months Ended

September 30,

Region 2025 2024

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Product sales $ 25.5 $ 27.9

Pack sales 1.3 1.2 3.4 4.7

Pack sales and associate fees 0.7 1.1

Other 0.4 0.4

Total sales $ 26.6 $ 29.4

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

Region September 30, 2024 December 31, 2023

Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of March 31, 2025 and December 31, 2024, reside in the following regions, as follows (in millions) :

Region March 31, 2025 December 31, 2024

Americas $ 2.6 $ 2.4

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Total long-lived assets $ 3.1 $ 2.9

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Region September 30, 2024 December 31, 2023

Region March 31, 2025 December 31, 2024

Americas $ 6.5 $ 6.0

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Total inventory $ 11.8 $ 10.4

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company's segment revenue, segment expenses and segment (loss) income for the three months ended March 31, 2025 and 2024 ( in thousands):

Three Months Ended

Net Sales $ 26,563 $ 29,393

Cost of sales 6,827 6,296

Commissions and incentives 10,553 11,685

Human Resources 4,099 4,846

Distribution and warehouse 457 631

Selling and administrative expenses 5,167 4,699

Depreciation and amortization 293 416

Interest expense 133 27

Interest income ( 60 ) ( 45 )

Other (income) expense 418 ( 871 )

Income tax provision 206 529

Segment net income (loss) $ ( 1,530 ) $ 1,180

Reconciliation of profit or loss

Adjustments and reconciling items — —

Consolidated net income (loss) $ ( 1,530 ) $ 1,180

EARNINGS PER SHARE

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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 (described above).

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

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

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

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

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

In determining the potential dilutive effect of outstanding stock options for the three months ended March 31, 2025, the Company used the quarterly average common stock close price of $ 11.53 and per share.

For the three months ended March 31, 2025, the Company's common stock subject to options were excluded from the diluted EPS calculation as their effect would have been antidilutive.

The Company reported a net loss for the three months ended March 31, 2025.

In determining the potential dilutive effect of outstanding stock options for the three months ended March 31, 2024, the Company used the quarterly average common stock close price of $ 8.84 per share.

For the three months ended March 31, 2024, there were 1.88 million weighted-average common shares outstanding used for the basic EPS calculation.

For the three months ended March 31, 2024, 8187 restricted stock units was granted (see Note 5, Stock Based Compensation, for more information).

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

In addition, 199,824 shares underlying stock options were excluded from the diluted EPS calculation, as their effect would have been antidilutive.

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

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

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

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

MANNATECH, INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net earnings attributable to common stockholders $ ( 328 ) $ 18 $ 228 $ ( 483 )

Net (loss) earnings attributable to common stockholders $ ( 1,530 ) $ 1,180

Weighted average common shares outstanding (for basic calculation) 1,901 1,884

4 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-Q

Item 1. Financial Statements