MANNATECH INC

NOTE1: 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 isnot 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 Form10-Q and Article8-03 of Regulation S-X. Accordingly, the Company’s condensed consolidated financial statements and footnotes contained herein donot 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 arenot necessarily indicative of its consolidated results of operations to be expected for its fiscal year. The* December 31, 2024* consolidated balance sheet was included in the audited consolidated financial statements in the Company’s annual report on Form10-K for the year ended* December 31, 2024* and filed with the United States Securities and Exchange Commission (the “SEC”) on* March 25,*2025 (the “2024 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 the2024 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 havenot varied materially from the Company’s estimates and the Company doesnot 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, 2024* included in our2024 Annual Report. There have beenno significant changes in our accounting policies or the application thereof during the period ended* September 30, 2025*.

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Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities ofthree months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents was $7.1 million at* September 30, 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 within24 to72 hours. At* September 30, 2025* and* December 31, 2024*, credit card receivables were $2.1 million and $1.6 million, respectively, and cash and cash equivalents held in bank accounts in foreign countries totaled $2.6 million and $5.1 million at* September 30, 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 doesnot believe it has an excessive 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* September 30, 2025* and* December 31, 2024*, our total restricted cash was $0.8 million and $1.1 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)*:

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 doesnot match the order total. As of* September 30, 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)*:

In accordance with Financial Instruments - Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments ("ASC326"), 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* September 30, 2025* and* September 30, 2024*, the Company held an allowance for credit losses of $0.8 million and $0.9 million, respectively.

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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):*

The Company accounts for its investment in Korea Mutual Aid Cooperative & Consumer at its initial investment amount, in accordance with ASC321, Investments - Equity Securities (“ASC321”). This guidance offers an alternative to the requirement of carrying equity interests at fair value as per ASC820, Fair Value Measurement. The measurement alternative is applicable to certain equity interests without readily determinable fair values that fall within the scope of ASC321 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):*

Other Long-Term Liabilities

Other long-term liabilities consisted of the following*(in thousands). See Note9,* Employee Benefit Plans, of the Company’s2024 Annual Report for more information.

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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* September 30, 2025* and* December 31, 2024*. 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 containtwo 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 aone-time order contain only thefirst 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 complimentarythree-month package for the Success Tracker™ and Mannatech+ online business tools with thefirst payment of an associate fee. Thefirst payment of an associate fee containsthree 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 thethree performance obligations on a relative standalone selling price basis and revenue is recognized over the period that access to the tools is active. Associates donot have complimentary access to online business tools after thefirst 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)*.

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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The deferred revenue associated with the loyalty program at* September 30, 2025* and* September 30, 2024* was $2.2 million and $2.9 million, respectively.

Deferred Commissions

The Company defers commissions on (i) the sales of products shipped butnot received by customers by the end of the respective period (up to the change in shipping terms with the customers, which occurred during the quarter ended* September**30,2024*) and (ii) 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)*.

Sales Refunds and Allowances

The Company utilizes the expected value method, as set forth by Accounting Standard Codification ("ASC") Topic606 Revenue from Contracts with Customers ("ASC606"), to estimate the sales returns and allowance liability by taking the weighted average of the sales return rates over a rollingsix-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 havenot materially changed through the years, as the majority of our customers who return their merchandise do so within thefirst 90 days after the original sale. Sales returns have historically averaged0.5% or less of our gross sales.

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

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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 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 butNot Yet Effective**

Income Tax Reporting (ASU2023-09) — Income Taxes (Topic740): Improvements to Income Tax Disclosures(“ASU2023-09”). 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 was 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 ASU2023*-09 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls.

Income Statement Expenses (ASU2024-03) — Income Statement (Subtopic220-40) - 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 doesnot* 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. ASU2024-03 becomes effective* January 1, 2027.The Company is currently evaluating the disclosure impacts of ASU2024*-03 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls.

Credit Losses(ASU2025-05) – Financial Instruments-Credit Losses (Topic326) - Measurement of Credit Losses for Accounts Receivable and Contract Assets. In* July 2025,the FASB issued accounting guidance which* **introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. This guidance is effective beginning in thefirst quarter of fiscal year2027 on a prospective basis, with early adoption permitted. The Company is currently evaluating the impacts of ASU2025-05 on its consolidated financial statements as well as the impacts to its financial reporting process and related internal controls.

Intangibles—Goodwill and Other—Internal-Use Software(ASU2025-06) (Subtopic350-40) - Targeted Improvements to the Accounting for Internal-Use Software. In* September 2025,the FASB issued ASU2025*-06, which provides targeted improvements to the accounting for internal-use software. The amendments are intended to modernize and simplify the guidance by aligning it more closely with the economic substance of software development activities. The amendments are effective for all entities for annual reporting periods beginning after* December 15, 2027,and interim reporting periods within those annual periods. Early adoption is permitted in any interim or annual reporting period for which financial statements havenot* yet been issued or made available for issuance. If early adoption is elected in an interim period, the entity must adopt the amendments as of the beginning of the annual reporting period that includes that interim period. The Company is currently evaluating the impact of the adoption of ASU2025-06 on our consolidated financial statements and related disclosures.

Other recently issued accounting pronouncements didnot or arenot believed by management to have a material impact on the Company’s present or future financial statements.

NOTE2: INVENTORIES

Inventories consist of raw materials, finished goods, and promotional materials. The Company provides an allowance for any slow-moving or obsolete inventories. The allowance for slow-moving inventory obsolescence was $0.1 million and $0.6 million at* September 30, 2025* and* December 31, 2024*, respectively.

Inventories as of* September 30, 2025* and* December 31, 2024*, consisted of the following*(in thousands)*:

NOTE3: INCOME TAXES

For thethree andnine months ended* September 30, 2025*, the Company’s effective tax rate was 23.5% and (26.4)%, respectively. For thethree andnine months ended* September 30, 2024*, the Company's effective tax rate was 54.3% and 73.6%, respectively. For thethree andnine months ended* September 30, 2025and2024*, the Company's effective tax rate was determined based on the estimated annual effective income tax rate. The effective tax rate for thethree andnine months ended* September 30, 2025* and* September 30, 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.

NOTE4: NOTES PAYABLE

Notes payable were $2.9 million and $3.0 million as of* September 30, 2025* and* December 31, 2024*, respectively.

The current portion was $0.0 million and $0.1 million at* September 30, 2025* and* December 31, 2024*, respectively, as a result of insurance financing arrangements.

The long-term portion of notes payable relates tothree unsecured notes, described below. The long-term portion of notes payable was $2.9 million at each of* September 30, 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. The note bears interest at 16% per annum and requires quarterly interest payments beginning June 30, 2024.The note is due in full on September 30, 2026.The Company has the right to prepay all or a portion of the Promissory Note at any time without premium or penalty. Tyler Rameson is an independent member of Mannatech's Board of Directors and is the managing member of Jade Capital. As of September 30, 2025*, there wasno current portion, and the long-term portion of the balance was $2.0 million. On* September 9, 2025,the Company entered into a loan extension agreement with Jade Capital, extending the maturity date of the note from September 30, 2026,to March 31, 2027.*All other terms of the note remained unchanged.

On* April 23, 2024,the Company issued an unsecured note payable to J. Stanley Fredrick in the amount of $1.0 million. The note bears interest at 16% per annum and requires quarterly interest payments beginning June 30, 2024.The note is due in full on September 30, 2026.The Company has the right to prepay all or a portion of the Promissory Note at any time without premium or penalty. Mr. Fredrick is the Chairman of Mannatech's Board of Directors. As of September 30, 2025*, there wasno current portion, and the long-term portion of the balance was $0.8 million. On* September 9, 2025,the Company entered into a loan extension agreement with J. Stanley Fredrick, extending the maturity date of the note from September 30, 2026,to March 31, 2027.*All other terms of the note remained unchanged.

On* April 23, 2024,the Company issued an unsecured note payable to Kevin Robbins in the amount of $0.1 million. The note bears interest at 16% per annum and requires quarterly interest payments beginning June 30, 2024.The note is due in full on September 30, 2026.The Company has the right to prepay all or a portion of the Promissory Note at any time without premium or penalty. Mr. Robbins is a member of Mannatech's Board of Directors. As of September 30, 2025*, there wasno current portion, and the long-term portion of the balance was $0.1 million. On* September 9, 2025,the Company entered into a loan extension agreement with Kevin Robbins, extending the maturity date of the note from September 30, 2026,to March 31, 2027.*All other terms of the note remained unchanged.

As of* September 30, 2025*, the Company's future principal payments on notes payable were as follows*(in thousands):*

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NOTE5: STOCK-BASED COMPENSATION

Stock Option Plan

The Company currently hasone active stock-based compensation plan, the Mannatech, Incorporated2017 Stock Incentive Plan, which was adopted by the Company’s Board of Directors (the "Board") on* April17,* 2017 and was approved by its shareholders on* June8,* 2017, and subsequently amended by the Board in* February 2019,which amendment was approved by the Company's shareholders on June 11, 2019 (as amended, the"2017* Plan"). The Board has reserved a maximum of 370,000 shares of our common stock that* maybe issued under the2017* Plan (subject to adjustments for stock splits, stock dividends or other changes in corporate capitalization). As of* September 30, 2025*, the Company had a total of 49,875 shares available for grant under the2017 Plan, which expires on* April**16,* 2027.

The2017 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. However, only employees of the Company and its corporate subsidiaries are eligible to receive incentive stock options. The exercise price per share for all stock options will beno less than the market value of a share of common stock on the date of grant. Any incentive stock option granted to an employee owning more than10% of our common stock will have an exercise price ofno less than110% of our common stock’s market value on the grant date.

The majority of stock options vest overtwo orthree years, and generally are granted with a term often years, orfive years in the case of an incentive option granted to an employee who owns more than10% of our common stock.

The Company is required to measure and recognize compensation expense related to any outstanding and unvested stock options in its consolidated financial statements using a fair-value based option-pricing model. The Company records stock-based compensation expense related to granting stock options in selling and administrative expenses. The fair value of the stock option award is calculated using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires us to apply judgment and use subjective assumptions about expected dividend yields, risk-free interest rates, price volatility related to the underlying shares, and the expected stock option life, including forfeitures.

During thenine months ended* September 30, 2025and2024*, the Company granted 68,000 and 14,500 stock options, respectively. The weighted average fair value of stock options granted during thenine months ended* September 30, 2025and2024* was approximately $6.06 and $4.47, respectively.

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

The computation of the expected volatility assumption used in the Black-Scholes calculations for new grants is based on historical volatility of the Company’s stock. The expected life assumptions are based on the Company’s historical employee exercise and forfeiture behavior.

Stock Grants

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 willnot* vest until Mannatech's stock price averages $15.00 per share (i.e., the volume weighted price) for60 consecutive days. As of the end of the performance period, the stock price condition wasnot met. Accordingly, the RSUs didnot vest, and the grant lapsed withno shares issued.

The Company is required to measure and recognize compensation expense related to the grant in its consolidated financial statements using a fair-value based model. The Company has determined the fair value of the grant is $0.1 million. Accordingly, the Company has recognized compensation expense related to the grant of $6 thousand and $26 thousand for thethree andnine months ended* September 30, 2025*, respectively.

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The Company recognized compensation expense related to the fair values of options and RSUs as follows for thethree andnine months ended* September 30,* (in thousands):

As of* September 30, 2025*, the Company expects to record compensation expense related to stock options and RSUs in the future as follows*(in thousands)*:

Equity-Based Compensation to Directors

At the discretion of the Board, each director* mayreceive a portion of their fees payable in stock grants in lieu of cash compensation. For thenine* months ended* September 30, 2025and2024*, 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 thenine months ending* September 30, 2025and2024*.

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NOTE6: SHAREHOLDERS’** EQUITY**

Treasury Stock

There wereno shares repurchased during each of thethree andnine months ended* September 30, 2025and2024*.

As of* September 30, 2025* and* December 31, 2024*, the Company had 841,927 and 858,043 treasury shares, respectively.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss displayed in the Condensed Consolidated Statement of Shareholders’ Equity represents the results of certain shareholders’ equity changesnot reflected in the Condensed Consolidated Statements of Operations, such as foreign currency translation and certain pension and post-retirement benefit obligations.

The after-tax components of accumulated other comprehensive loss are as follows*(in thousands)*:

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

Dividends

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 therefore, subject to any statutory or contractual restrictions on the payment of dividends and to the rights of the holders ofone or more outstanding series of our preferred stock. For each of thethree andnine months ended* September 30, 2025and2024*, the Company didnot pay any dividends.

NOTE7: LITIGATION

Litigation in General

As of* September 30, 2025*, the Company hadno open or pending litigation andno legal reserve was deemed necessary. The Company has incurred several claims in the normal course of business. The Company believes such claims can be resolved without any material adverse effect on its consolidated financial position, results of operations, or cash flows.

The Company maintains certain liability insurance; however, certain costs of defending lawsuits arenot covered by or only partially covered by its insurance policies, including claims that are below insurance deductibles. Additionally, insurance carriers could refuse to cover certain claims, in whole or in part. The Company accrues costs to defend itself from litigation as they are incurred.

NOTE8: LEASES

The Company has entered into contractual lease arrangements to rent office space and equipment fromthird-party lessors and accounts for leases in accordance with ASC Topic842. See Note5 to the consolidated financial statements in our2024 Annual Report. Right of use assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make future lease payments arising from the lease.

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, 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 afive-year agreement to sublease 10,000 rentable square feet of the Company's leased office space in Flower Mound, Texas to a subtenant. There wasno* modification or impairment by entering into the sublease agreement because the Company wasnot released from its obligations under the head lease. Sublease income is presented as a component of net sales on the Company's Condensed Consolidated Statements of Operations. The Company has made a policy election in accordance with ASC842-10-15-39A to exclude from consideration taxes that are assessed on and collected from the sublessee from consideration. For thethree andnine months ended* September 30, 2025*, the Company had earned less than $0.1 million and $0.1 million income from the sublease, respectively. For thethree andnine months ended* September 30, 2024*, the Company earned less than $0.1 million and $0.1 million income from the sublease, respectively.

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As of* September 30, 2025*, the Company had net operating lease right-of-use assets of $3.8 million and net finance lease right-of-use assets of $0.8 million. At* September 30, 2025*, our operating lease liabilities were $4.4 million and our finance lease liabilities were $0.8 million.

The weighted-average remaining lease term and discount rate related to the Company’s operating lease liabilities as of* September 30, 2025* were 2.60 years and 4.54%, respectively. The weighted-average remaining lease term and discount rate related to the Company’s finance lease liabilities as of* September 30, 2025* were 2.55 years and 6.45%, 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, 2025* and* December 31, 2024* our right-of-use assets and lease liabilities balances, net of accumulated amortization, were as follows*(in thousands)*:

As of* September 30, 2025*, the Company’s future sublease income and minimum future lease payments on operating and finance leases were as follows*(in thousands)*:

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NOTE9: FAIR VALUE

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 (Topic820) 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:

The primary objective of the Company’s investment activities is to preserve principal while maximizing yields without significantly increasing risk. The investment instruments held by the Company are money market funds and interest-bearing deposits for which quoted market prices are readily available. The Company considers these highly liquid investments to be cash equivalents. These investments are classified within Level1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. The Company doesnot have any material financial liabilities that were required to be measured at fair value on a recurring basis at* September 30, 2025*.

As of* September 30, 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 Level1.

The tables below present the recorded amount of financial assets measured at fair value (in thousands) on a recurring basis as of* September 30, 2025* and* December 31, 2024*.

The following table below present the carrying amount and estimated fair value of financial instruments as of* September 30, 2025* and* December 31, 2024*, (inthousands)that arenot measured at fair value:

The fair value was estimated using a net present value measurement, which is based on unobservable inputs, and as such, is classified as Level3.

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NOTE10: SEGMENT INFORMATION

The Company operates as a direct seller in the nutritional supplement industry. The Company's sole reporting segment isone in which it sells proprietary nutritional supplements, skin care and anti-aging products, and weight-management and fitness products operating intwenty-five markets. The products are primarily sold through a network marketing distribution channel of approximately 119,000 active associates and preferred customer positions who we refer to as current associates and preferred customers. The Company's subsidiary in China, Meitai, is currently operating as a traditional retailer under a cross-border e-commerce model. Meitai cannot legally conduct a direct selling business in China unless it acquires a direct selling license in China. 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 on a consolidated basis. The Company currently sells its products inthree regions: (i) the Americas (the United States, Canada and Mexico); (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, 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 associate fee and product information for thethree andnine months ended* September 30,* were as follows*(in millions, except percentages)*:

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Long-lived assets, which include property and equipment and construction in process for the Company and its subsidiaries, as of* September 30, 2025* and* December 31, 2024*, reside in the following regions, as follows*(in millions)*:

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)*:

The following table presents the Company's segment revenue, segment expenses and segment income (loss) for thethree andnine months ended* September 30, 2025and2024* (in thousands):

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NOTE11: EARNINGS PER SHARE

The Company calculates basic Earnings per Share ("EPS") by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS also reflects the potential dilution that could occur if common stock were issued for awards outstanding under the Mannatech, Incorporated2017 Stock Incentive Plan (described above).

In determining the potential dilutive effect of outstanding stock options for thethree andnine months ended* September 30, 2025*, the Company used the quarterly andnine-month average common stock close price of $8.64 and $9.97 per share, respectively.

For thethree months ended* September 30, 2025*, there were 1.90 million weighted-average common shares outstanding used for the basic EPS calculation. For thethree months ended* September 30, 2025*,8,187 restricted stock units granted (see Note5, Stock Based Compensation,for more information) were excluded from the calculation of diluted EPS because the related market condition wasnot achieved and the grant lapsed. In addition,180,974 shares underlying stock options were excluded from the diluted EPS calculation, as their effect would have been antidilutive.

For thenine months ended* September 30, 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 thenine months ended* September 30, 2025.*

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

For thethree months ended* September 30, 2024*, the Company's common stock subject to options were excluded from the diluted EPS calculations as their effect would have been antidilutive. The Company reported a net loss for thethree months ended* September 30, 2024*.

For thenine months ended* September 30, 2024*, there were 1.89 million weighted-average common shares outstanding used for the basic EPS calculation. For thenine months ended* September 30, 2024*,8,187 restricted stock units was granted (see Note5, Stock Based Compensation,for more information). These shares were excluded from the calculation of diluted EPS because the related market condition wasnot achieved. In addition,156,661 shares underlying stock options were excluded from the diluted EPS calculation, as their effect would have been antidilutive.

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

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