Mannatech首季轉虧為盈錄淨利95萬美元 惟持續經營疑慮未消

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

(Mark One)

 

☒         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2026

 

OR

 

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________.

 

Commission File No. 000-24657

 

MANNATECH, INCORPORATED

 

(Exact Name of Registrant as Specified in its Charter)

 

 Texas
 75-2508900
 

 (State or other Jurisdiction of Incorporation or Organization)
 (I.R.S. Employer Identification No.)
 

 1410 Lakeside Parkway, Suite 200,
  

 Flower Mound, Texas
 75028
 

 (Address of Principal Executive Offices)
 (Zip Code)
 

 

Registrant’s Telephone Number, including Area Code: (972) 471-7400

Securities registered pursuant to Section 12(b) of the Act:

 

  Title of each class
  Trading Symbol(s)
  Name of each exchange on which registered
 

  Common Stock,  par value $0.0001 per share
  MTEX
  The Nasdaq Stock Market LLC
 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer
  ☐
 Accelerated filer
  ☐
 Non-accelerated filer
 ☒
 Smaller reporting company
 ☒
 Emerging Growth Company
 ☐
 

 

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

 

As of May 5, 2026, the number of shares outstanding of the registrant’s sole class of common stock, par value $0.0001 per share, was 1,929,670.

 

 
 
 
  
 

 

 

 
 
 
 
 Table of Contents
 

 

 

    

 
  
 

 
 MANNATECH, INCORPORATED

 TABLE OF CONTENTS

  

 
 
 
 Special Note Regarding Forward-Looking Statements
 
 1
 
 

 
 Part I – FINANCIAL INFORMATION
 
  
 

 
 Item 1. Financial Statements
 
 2
 
 

 
 Condensed Consolidated Balance Sheets (unaudited)
 
 2
 
 

 
 Condensed Consolidated Statements of Operations (unaudited)
 
 3
 
 

 
 Condensed Consolidated Statements of Comprehensive Loss (unaudited)
 
 4
 
 

 
 Condensed Consolidated Statements of Shareholders’ Equity (unaudited)
 
 5
 
 

 
 Condensed Consolidated Statements of Cash Flows (unaudited)
 
 6
 
 

 
 Notes to Condensed Consolidated Financial Statements (unaudited)
 
 8
 
 

 
  
  
 

 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 24
 
 

 
 Company Overview
 
 24
 
 

 
 Results of Operations
 
 25
 
 

 
 Liquidity and Capital Resources
 
 31
 
 

 
 Significant Accounting Policies and Critical Estimates
 
 33
 
 

 
  
  
 

 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 
 35
 
 

 
  
  
 

 
 Item 4. Controls and Procedures
 
 35
 
 

 
  
  
 

 
 Part II – OTHER INFORMATION
 
  
 

 
 Item 1. Legal Proceedings
 
 36
 
 

 
  
  
 

 
 Item 1A. Risk Factors
 
 36
 
 

 
  
  
 

 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 
 36
 
 

 
  
  
 

 
 Item 3. Defaults Upon Senior Securities
 
 36
 
 

 
  
  
 

 
 Item 4. Mine Safety Disclosures
 
 36
 
 

 
  
  
 

 
 Item 5. Other Information
 
 36
 
 

 
  
  
 

 
 Item 6. Exhibits
 
 37
 
 

 
  
  
 

 
 Signatures
 
 38
 
 

 
 
  

 
 
 
 
  
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

     

 

 
  
 

 Special Note Regarding Forward-Looking Statements

  

 Certain disclosures and analyses in this Form 10-Q, including information incorporated by reference, may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995 that are subject to various risks and uncertainties. Opinions, forecasts, projections, guidance, or other statements other than statements of historical fact are considered forward-looking statements and reflect only current views about future events and financial performance. Some of these forward-looking statements include statements regarding:

  

 
 
 
  
 •
 
 management’s plans and objectives for future operations;
 
 

 
 
 
 
 
  
 •
 
 existing cash flows being adequate to fund future operational needs;
 
 

 
 
 
 
 
  
 •
 
 future plans related to budgets, future capital requirements, market share growth, and anticipated capital projects and obligations;
 
 

 
 
 
 
 
  
 •
 
 the realization of net deferred tax assets;
 
 

 
 
 
 
 
  
 •
 
 the ability to curtail operating expenditures;
 
 

 
 
 
 
 
  
 •
 
 global statutory tax rates remaining unchanged;
 
 

 
 
 
 
 
  
 •
 
 the impact of future market changes due to exposure to foreign currency translations;
 
 

 
 
 
 
 
  
 •
 
 the possibility of certain policies, procedures, and internal processes minimizing exposure to market risk;
 
 

 
 
 
 
 
  
 •
 
 the impact of new accounting pronouncements on financial condition, results of operations, or cash flows;
 
 

 
 
 
 
 
  
 •
 
 the outcome of new or existing litigation matters;
 
 

 
 
 
 
 
  
 •
 
 the outcome of new or existing regulatory inquiries or investigations;
 
 

 
 
 
 
 
  
 •
 
 other assumptions described in this report underlying such forward-looking statements.
 
 

 
 
  

 Although we believe that the expectations included in these forward-looking statements are reasonable, these forward-looking statements are subject to certain events, risks, assumptions, and uncertainties, including those discussed below, the “Risk Factors” section in Part I, Item 1A of our Form 10-K for the year ended December 31, 2025, and elsewhere in this Form 10-Q and the documents incorporated by reference herein. If one or more of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results and developments could materially differ from those expressed in or implied by such forward-looking statements. For example, any of the following factors could cause actual results to vary materially from our projections:

  

 
 
 
  
 •
 
 overall growth or lack of growth in the nutritional supplements industry;
 
 

 
 
 
 
 
  
 •
 
 plans for expected future product development;
 
 

 
 
 
 
 
  
 •
 
 changes in manufacturing costs;
 
 

 
 
 
 
 
  
 •
 
 shifts in the mix of packs and products;
 
 

 
 
 
 
 
  
 •
 
 the future impact of any changes to global associate career and compensation plans or incentives or the regulations governing such plans and incentives;
 
 

 
 
 
 
 
  
 •
 
 the ability to attract and retain independent associates and preferred customers;
 
 

 
 
 
 
 
  
 •
 
 new regulatory changes that may affect operations, products or compensation plans and incentives;
 
 

 
 
 
 
 
  
 •
 
 ability of our outside suppliers and manufacturers to supply products in sufficient quantities and comply with our product safety and quality standards or applicable law;
 
 

 
 
 
 
 
  
 •
 
 the competitive nature of our business with respect to products and pricing;
 
 

 
 
 
 
 
  
 •
 
 publicity related to our products or network marketing; and
 
 

 
 
 
 
 
  
 •
 
 the political, social and economic climate of the countries in which we operate; and
 
 

 
 
 
 
 
  
 •
 
 changes in trade policy in the United States and other countries, including the imposition of tariffs and the resulting consequences, may adversely impact our business, results of operations and financial condition.
 
 

 
 
  

 Forward-looking statements generally can be identified by use of phrases or terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “approximates,” “predicts,” “projects,” “hopes,” “potential,” and “continues” or other similar words or the negative of such terms and other comparable terminology. Similarly, descriptions of Mannatech’s objectives, strategies, plans, goals, or targets contained herein are also considered forward-looking statements. Readers are cautioned when considering these forward-looking statements to keep in mind these risks, assumptions, and uncertainties and any other cautionary statements in this report, as all of the forward-looking statements contained herein speak only as of the date of this report.

  

 Unless stated otherwise, all financial information throughout this report and in the Condensed Consolidated Financial Statements and related Notes include Mannatech, Incorporated and all of its subsidiaries on a consolidated basis and may be referred to herein as “Mannatech,” “the Company,” “its,” “we,” “us,” “our,” or “their.”

  

 Our products are not intended to diagnose, cure, treat, or prevent any disease, and any statements about our products contained in this report have not been evaluated by the Food and Drug Administration, also referred to herein as the “FDA.”

 
  
 

  

 
 
 
 
 1
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

 
  
 

  

 PART I – FINANCIAL INFORMATION

  

 Item 1. Financial Statements

 MANNATECH, INCORPORATED AND SUBSIDIARIES

 CONDENSED CONSOLIDATED BALANCE SHEETS – (UNAUDITED)

 (in thousands, except share and per share amounts)

  

 
    March 31, 2026
    December 31, 2025
  

 ASSETS
         

 Cash and cash equivalents
  $7,013  $6,185 

 Restricted cash
   134   550 

 Accounts receivable, net of allowance of $627 and $756
   10   1 

 Income tax receivable
   375   736 

 Inventories, net
   9,674   10,123 

 Prepaid expenses and other current assets
   2,481   1,701 

 Deferred commissions
   1,513   1,280 

 Total current assets
   21,200   20,576 

 Property and equipment, net
   2,999   3,140 

 Operating lease right-of-use assets
   2,836   3,292 

 Other assets
   2,622   2,751 

 Long-term restricted cash
   226   234 

 Total assets
  $29,883  $29,993 

 LIABILITIES AND SHAREHOLDERS’ EQUITY
         

 Commissions and incentives payable
  $7,111  $7,118 

 Accrued expenses
   3,263   3,128 

 Deferred revenue
   3,270   3,086 

 Accounts payable
   2,877   2,410 

 Current portion of operating lease liabilities
   1,596   1,671 

 Taxes payable
   677   1,029 

 Current notes payable
   377   — 

 Current portion of finance lease liabilities
   297   293 

 Total current liabilities
   19,468   18,735 

 Long-term notes payable
   2,750   2,750 

 Operating lease liabilities, excluding current portion
   1,850   2,253 

 Other long-term liabilities
   1,307   1,340 

 Finance lease liabilities, excluding current portion
   312   388 

 Deferred tax liabilities, net
   9,750   9,750 

 Total liabilities
   35,437   35,216 

         

 Commitments and contingencies (Note 8)
           

         

 Shareholders’ equity:
         

 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 issued and 1,929,670 shares outstanding as of March 31, 2026 and 2,742,857 shares issued and 1,900,930 shares outstanding as of December 31, 2025
   —   — 

 Additional paid-in capital
   32,638   33,032 

 Accumulated deficit
   (13,074)  (14,024)

 Accumulated other comprehensive loss
   (6,224)  (4,669)

 Treasury stock, at average cost, 813,187 shares as of March 31, 2026 and 841,927 shares as of December 31, 2025
   (18,894)  (19,562)

 Total shareholders’ equity
   (5,554)  (5,223)

 Total liabilities and shareholders’ equity
  $29,883  $29,993 

 

 See accompanying notes to unaudited condensed consolidated financial statements.

 
 
 
 
 2
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

 
  
 

  

 MANNATECH, INCORPORATED AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – (UNAUDITED)

 (in thousands, except per share information)

  

 
    Three Months Ended
  

   March 31,
  

   2026
    2025
  

 Net sales
  $24,917  $26,563 

 Cost of sales
   6,056   6,827 

 Gross profit
   18,861   19,736 

 Operating expenses:
         

 Commissions and incentives
   9,759   10,553 

 Selling and administrative expenses
   9,282   10,016 

 Total operating expenses
   19,041   20,569 

 Loss from operations
   (180)  (833)

 Interest expense, net
   (104)  (73)

 Other income (expense), net
   1,395   (418)

 Income (loss) before income taxes
   1,111   (1,324)

 Income tax expense
   (161)  (206)

 Net income (loss)
  $950  $(1,530)

 Income (loss) per common share:
         

 Basic
  $0.49  $(0.80)

 Diluted
  $0.49  $(0.80)

 Weighted-average common shares outstanding:
         

 Basic
   1,929   1,901 

 Diluted
   1,931   1,901 

 

  

 See accompanying notes to unaudited condensed consolidated financial statements.

 
 
 
 
 3
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

 
  
 

  

 MANNATECH, INCORPORATED AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) – (UNAUDITED)

 (in thousands)

  

 
    Three Months Ended
  

   March 31,
  

   2026
    2025
  

 Net income (loss)
  $950  $(1,530)

 Foreign currency translations
   (1,555)  238 

 Comprehensive loss
  $(605) $(1,292)

 

  

 See accompanying notes to unaudited condensed consolidated financial statements.

  

 
 
 
 
 4
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

 
  
 

  

 MANNATECH, INCORPORATED AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY – (UNAUDITED)

 (amounts in thousands, except share data)

  

 
    Common Stock, $0.0001 par value
                      

               (Accumulated
    Accumulated
          

           Additional
    deficit)
    other
        Total
  

   Number
        paid-in
    retained
    comprehensive
    Treasury
    shareholders’
  

   of Shares
    Amount
    capital
    earnings
    loss
    stock
    equity
  

 Balance at January 1, 2026
   1,900,930  $—  $33,032  $(14,024) $(4,669) $(19,562) $(5,223)

 Net income
   —   —   —   950   —   —   950 

 Charge related to stock-based compensation
   —   —   33   —   —   —   33 

 Issuance of unrestricted shares
   28,740   —   (427)  —   —   668   241 

 Foreign currency translations
   —   —   —   —   (1,555)  —   (1,555)

 Balance at March 31, 2026
   1,929,670  $—  $32,638  $(13,074) $(6,224) $(18,894) $(5,554)

 

  

  

 
    Common Stock, $0.0001 par value
                      

                   Accumulated
          

           Additional
        other
        Total
  

   Number
        paid-in
    Accumulated
    comprehensive
    Treasury
    shareholders’
  

   of Shares
    Amount
    capital
    deficit
    loss
    stock
    equity
  

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

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

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

 Issuance of unrestricted shares
   16,116   —   (134)  —   —   374   240 

 Foreign currency translations
   —   —   —   —   238   —   238 

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

 

  

 See accompanying notes to unaudited condensed consolidated financial statements.

  

 
 
 
 
 5
 

 

 

 
 
 
 
 Table of Contents
 

 

 

 

 
  
 

  

 MANNATECH, INCORPORATED AND SUBSIDIARIES

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – (UNAUDITED)

 (in thousands)

  

 
    Three Months Ended
  

   March 31,
  

   2026
    2025
  

 CASH FLOWS FROM OPERATING ACTIVITIES:
         

 Net income (loss)
  $950  $(1,530)

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

 Depreciation and amortization
   261   293 

 Non-cash operating lease expense
   395   405 

 Provision for (reversal of) inventory losses
   6   (27)

 Reversal for allowance for credit losses
   (74)  (96)

 Unrealized (gain) loss from foreign exchange
   (1,140)  328 

 Charge related to stock-based compensation
   274   263 

 Deferred income taxes
   —   (56)

 Changes in operating assets and liabilities:
         

 Accounts receivable
   66   14 

 Income tax receivable
   357   38 

 Inventories
   194   (1,368)

 Prepaid expenses and other current assets
   (681)  (1,554)

 Deferred commissions
   (235)  503 

 Other assets
   2   (47)

 Accounts payable
   485   2,297 

 Accrued expenses
   242   6 

 Other long-term liabilities
   (33)  35 

 Taxes payable
   (281)  (263)

 Commissions and incentives payable
   143   107 

 Deferred revenue
   195   (716)

 Net cash provided by (used in) operating activities
   1,126   (1,368)

 CASH FLOWS FROM INVESTING ACTIVITIES:
         

 Acquisition of property and equipment
   (129)  (489)

 Cash used in investing activities
   (129)  (489)

 CASH FLOWS FROM FINANCING ACTIVITIES:
         

 Repayment of note payable
   (44)  (84)

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

 Cash used in financing activities
   (126)  (166)

 Effect of currency exchange rate changes on cash and cash equivalents
   (467)  (49)

 Net increase (decrease) in cash, cash equivalents, and restricted cash
   404   (2,072)

 Cash, cash equivalents, and restricted cash at the beginning of the period
   6,969   12,515 

 Cash, cash equivalents, and restricted cash at the end of the period
  $7,373  $10,443 

 

  

 See accompanying notes to unaudited condensed consolidated financial statements.

  

 
 
 
 
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    Three Months Ended
  

   March 31,
  

   2026
    2025
  

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
         

 Income taxes paid
  $424  $— 

 Interest paid on finance leases and other financing arrangements
  $119  $130 

         

 NON-CASH INVESTING AND FINANCING ACTIVITIES:
         

 Assets acquired through other financing arrangements
  $421  $— 

 Operating lease right-of-use assets acquired in exchange for new operating lease liabilities
  $5  $242 

 

  

 See accompanying notes to unaudited condensed consolidated financial statements.

  

 
  
 

 
 
 
 
 7
 

 

 

 
 
 
 
 Table of Contents
 

 

 
 
 MANNATECH, INCORPORATED AND SUBSIDIARIES
 

 

 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

 

 

 

  

 
  
 

 
 NOTE 1: 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, skin care and anti-aging products, and weight-management products. We currently sell our products into three regions: (i) the Americas (the United States, Canada and Mexico); (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, Thailand, Hong Kong, Taiwan and China).

  

 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. The Company cannot distinguish products sold for personal use from other sales, when sold to associates, because it is not involved with the products after delivery, other than usual and customary product warranties and returns. Only associates are eligible to earn commissions and incentives. We also ship our products to customers in the following countries: Belgium, France, Greece, Italy, Luxembourg, and Poland. The Company operates a non-direct selling business in mainland China. Our subsidiary in China, Meitai Daily Necessity & Health Products Co., Ltd. (“Meitai”), is operating as a traditional retailer under a cross-border e-commerce model in China. Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China.

  

 The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with instructions for Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, the Company’s condensed consolidated financial statements and footnotes contained herein do not include all of the information and footnotes required by GAAP to be considered “complete financial statements”. However, in the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements and footnotes contain all adjustments, including normal recurring adjustments, considered necessary for a fair presentation of the Company’s consolidated financial information as of, and for, the periods presented. The Company cautions that its consolidated results of operations for an interim period are not necessarily indicative of its consolidated results of operations to be expected for its fiscal year. The December 31, 2025 consolidated balance sheet was included in the audited consolidated financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2025 and filed with the United States Securities and Exchange Commission (the “SEC”) on April 15, 2026 (the “2025 Annual Report”), which includes all disclosures required by GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2025 Annual Report.

  

 
Principles of Consolidation

  

 The condensed consolidated financial statements and footnotes include the accounts of Mannatech and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

  

 
Use of Estimates

  

 The preparation of the Company’s condensed consolidated financial statements in accordance with GAAP requires the use of estimates that affect the reported value of assets, liabilities, revenues and expenses. These estimates are based on historical experience and various other factors. The Company continually evaluates the information used to make these estimates as the business and economic environment changes. Historically, actual results have not varied materially from the Company’s estimates and the Company does not currently anticipate a significant change in its assumptions related to these estimates. However, actual results may differ from these estimates under different assumptions or conditions.

  

 The use of estimates is pervasive throughout the condensed consolidated financial statements, but the accounting policies and estimates considered the most significant are described in this note to the condensed consolidated financial statements.

  

 Significant Accounting Policies

  

 Our significant accounting policies are described in the notes to our consolidated financial statements for the year ended December 31, 2025 included in our 2025 Annual Report. There have been no significant changes in our accounting policies or the application thereof during the period ended  March 31, 2026.

  

 
 
 
 
 8
 

 

 

 
 
 
 
 Table of Contents
 

 

 
 
 MANNATECH, INCORPORATED AND SUBSIDIARIES
 

 

 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

 

 

 
  
 
Cash and Cash Equivalents 

  

 The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents was $7.0 million at March 31, 2026 and $6.2 million at December 31, 2025. 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 March 31, 2026 and December 31, 2025, credit card receivables were $2.5 million and $2.2 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $4.5 million and $4.3 million at March 31, 2026 and December 31, 2025, 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 significant exposure to credit concentration risk.

  

 
Restricted Cash

  

 The Company is required to restrict cash for: (i) direct selling insurance premiums and credit card sales in the Republic of Korea; (ii) reserves related to credit card sales in the United States and Canada; and (iii) the Australia building lease collateral. At March 31, 2026 and December 31, 2025, our total restricted cash was $0.4 million and $0.8 million, respectively.

  

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

  

 
    March 31, 2026
    December 31, 2025
  

 Cash and cash equivalents
  $7,013  $6,185 

 Current restricted cash
   134   550 

 Long-term restricted cash
   226   234 

 Cash, cash equivalents, and restricted cash
  $7,373  $6,969 

 
  

 
Accounts Receivable, net

  

 Accounts receivable are carried at their estimated collectible amounts. Receivables are created upon shipment of an order if the credit card payment is rejected or does not match the order total. As of March 31, 2026 and December 31, 2025, receivables consisted primarily of amounts due from preferred customers and associates.

  

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

  

 
    March 31, 2026
    December 31, 2025
  

 Accounts receivable, net
  $10  $1 

 
  

 In accordance with Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326"), 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. Expected loss estimates are determined utilizing an aging schedule. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. 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 March 31, 2026 and March 31, 2025, the Company held an allowance for credit losses of $0.6 million and $0.9 million, respectively.

  

 
    March 31, 2026
    March 31, 2025
  

 Allowance for credit losses at beginning of period
  $756  $935 

 Recoveries in current period
   (74)  (96)

 Accounts charged off against the allowance
   (55)  37 

 Allowance for credit losses at end of period
  $627  $876 

 
  

 
 
 
 
 9
 

 

 

 
 
 
 
 Table of Contents
 

 

 
 
 MANNATECH, INCORPORATED AND SUBSIDIARIES
 

 

 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

 

 

 
  
 
Inventories

  

 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. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are reserved or written off.

  

 
Other Assets

  

 Other Assets consisted of the following (in thousands):

  

 
    March 31, 2026
    December 31, 2025
  

 Investment in Korea Mutual Aid Cooperative & Consumer
  $1,218  $1,283 

 Deposits for building leases
   1,167   1,231 

 Manapol Trademark
   237   237 

  $2,622  $2,751 

 
  

 The Company accounts for its investment in Korea Mutual Aid Cooperative & Consumer at its initial investment amount, in accordance with ASC 321, Investments - Equity Securities (“ASC 321”). This guidance offers an alternative to the requirement of carrying equity interests at fair value as per ASC 820, Fair Value Measurement. The measurement alternative is applicable to certain equity interests without readily determinable fair values that fall within the scope of ASC 321 and are otherwise required to be measured at fair value. The application of this measurement alternative is optional and is applied upon the acquisition of an equity interest.

  

 
Accrued Expenses 

  

 Accrued expenses consisted of the following (in thousands):

  

 
    March 31, 2026
    December 31, 2025
  

 Accrued compensation
  $1,286  $1,164 

 Accrued legal and accounting fees
   575   605 

 Customer deposits and sales returns
   65   65 

 Other accrued operating expenses
   673   525 

 Accrued shipping and handling costs
   285   266 

 Accrued sales and other taxes
   131   116 

 Accrued travel expenses related to corporate events
   173   157 

 Accrued inventory purchases
   46   196 

 Accrued royalties
   29   21 

 Accrued rent expense
   —   13 

  $3,263  $3,128 

 
  

 
Other Long-Term Liabilities

  

 Other long-term liabilities consisted of the following (in thousands). See Note 10, Employee Benefit Plans, of the Company’s 2025 Annual Report for more information.

  

 
    March 31, 2026
    December 31, 2025
  

 Government required severance
  $839  $854 

 Accrued lease restoration costs
   318   332 

 Defined benefit plan obligation
   150   154 

  $1,307  $1,340 

 
  

 
 
 
 
 10
 

 

 

 
 
 
 
 Table of Contents
 

 

 
 
 MANNATECH, INCORPORATED AND SUBSIDIARIES
 

 

 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

 

 

 
  
 
Revenue Recognition

  

 The Company’s revenue is derived from sales of individual products and associate fees or, a combination, in certain geographic markets. Substantially all of the Company’s product sales are made at published wholesale prices to associates and preferred customers. The Company records revenue net of any sales taxes and records a reserve for expected sales returns based on its historical experience. The Company's shipping terms with customers are such that ownership transfers upon delivery to the freight carrier, satisfying the Company's performance obligation. The Company's remaining performance obligations related to associate fees were $0.1 million at both March 31, 2026 and December 31, 2025. These amounts are included in deferred revenue on the accompanying Condensed Consolidated Balance Sheets, respectively.

  

 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: (a) the sale of the product and (b) the loyalty program. The Company's customer loyalty program conveys a material right to the customer to redeem loyalty points for the purchase of products. For these contracts, the Company accounts for each of these obligations separately as they are each distinct. 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 delivery of the product. Payments are made immediately through credit card upon purchase of the products.

  

 The Company provides associates with access to a complimentary three-month package for the Success Tracker™ and Mannatech+ online business tools with the first payment of an associate fee. The first payment of an associate fee contains three performance obligations: (a) the associate fee, whereby the Company provides an associate with the right to earn commissions, bonuses and incentives for a year, (b) three months of complimentary access to utilize the Success Tracker™ online tool and (c) three months of complimentary access to utilize the Mannatech+ online business tool. The transaction price is allocated between the three performance obligations on a relative standalone selling price basis and revenue is recognized over the period that access to the tools is active. Associates do not have complimentary access to online business tools after the first contractual period.

  

 With regard to both of the aforementioned contracts, the Company determines the standalone selling prices by using observable inputs.

  

 
Deferred Revenue

  

 The Company defers certain components of its revenue. Deferred revenue consisted of: (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
  

   March 31,
  

   2026
    2025
  

 Total deferred revenue at beginning of the period
  $3,086  $3,027 

 Amount recognized as revenue during the period that is included in beginning of the period
   (747)  (1,536)

 New deferrals at the end of the period, net
   931   831 

 Total deferred revenue at end of the period
  $3,270  $2,322 

 
  

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

  

 
 
 
 
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 Table of Contents
 

 

 
 
 MANNATECH, INCORPORATED AND SUBSIDIARIES
 

 

 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

 

 

 
  
 The deferred revenue associated with the loyalty program at March 31, 2026 and March 31, 2025 was $3.2 million and $2.2 million, respectively.

  

 
    Three Months Ended
  

   March 31,
  

 Loyalty program (in thousands)
   2026
    2025
  

 Loyalty deferred revenue at beginning of the period
  $3,005  $2,921 

 Loyalty points forfeited or expired
   (545)  (651)

 Loyalty points used
   (1,618)  (2,316)

 Loyalty points vested
   2,054   1,923 

 Loyalty points unvested
   292   354 

 Loyalty deferred revenue at end of period
  $3,188  $2,231 

 
  

 
Deferred Commissions

  

 The Company defers commissions on the loyalty program. Deferred commissions are incremental costs and are charged to expense when the related revenue is recognized.

  

 The table below illustrates the changes to deferred commission balances (in thousands).

  

 
    Three Months Ended
  

   March 31,
  

   2026
    2025
  

 Deferred commissions at beginning of the period
  $1,280  $1,259 

 Amount recognized as commissions expense
   (267)  (572)

 New commission deferrals at the end of the period
   500   74 

 Total deferred commissions at end of the period
  $1,513  $761 

 
  

 
Sales Refunds and Allowances

  

 The Company utilizes the expected value method, as set forth by Accounting Standard Codification ("ASC") Topic 606 Revenue from Contracts with Customers ("ASC 606"), to estimate the sales returns and allowance liability by taking the weighted average of the sales return rates over a rolling six-month period. The Company allocates the total amount recorded within the sales return and allowance liability as a reduction of the overall transaction price for the Company’s product sales. The Company deems the sales refund and allowance liability to be variable consideration.

  

 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.

  

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

  

 
    March 31, 2026
    March 31, 2025
  

 Sales reserve at beginning of period
  $38  $56 

 Provision in current period
   171   127 

 Returns charged off against the reserve
   (158)  (139)

 Sales reserve at end of period
  $51  $44 

 
  

 
 
 
 
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 Table of Contents
 

 

 
 
 MANNATECH, INCORPORATED AND SUBSIDIARIES
 

 

 
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 

 

 

 
  
 
Shipping and Handling Costs

  

 The Company records inbound freight as a component of inventory and cost of sales. The Company records freight and shipping fees collected from its customers as fulfillment costs. Freight and shipping fees are accounted for as activities to fulfill the promise to transfer the products to the customer, not as a separate performance obligation.

  

 
Commissions and Incentives

  

 Associates earn commissions and incentives based on their direct and indirect commissionable net sales over each month of the fiscal year. The Company accrues commissions and incentives when earned by associates and pays commissions on product sales on a monthly basis.

  

 
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, 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.

  

 
Recently Adopted Accounting Pronouncements 

  

 Credit Losses (ASU 2025-05) – Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets. In July 2025, the FASB issued accounting guidance which introduced a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. The Company adopted ASU 2025-05, on a prospective basis, effective for our fiscal year beginning January 1, 2026. The adoption did not have a material impact given the short-term nature of its accounts receivable.

  

 Accounting Pronouncements Issued but Not Yet Effective

  

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