MANNATECH INC
For the period ended Mar 31, 2026. Filed May 14, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Liquidity and Capital Resources
Cash and Cash Equivalents
As of March 31, 2026, our cash and cash equivalents increased by 13.4%, or $0.8 million, to $7.0 million from $6.2 million as of December 31, 2025. 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) collateral for a building lease in Australia. The current portion of restricted cash balances was $0.2 million and $0.6 million at March 31, 2026 and December 31, 2025, respectively. The long-term portion of restricted cash balances was $0.2 million at each of March 31, 2026 and December 31, 2025
Our principal use of cash is to pay for operating expenses, including commissions and incentives, capital assets, inventory purchases, and periodic cash dividends. We did not pay a dividend in the current quarter. Business objectives, operations, and expansion of operations are funded through net cash flows from operations rather than incurring long-term debt.
Working Capital
Working capital represents total current assets less total current liabilities. At March 31, 2026 and December 31, 2025, our working capital was $1.7 million and $1.8 million, respectively.
Net Cash Flows
Our net consolidated cash flows consisted of the following, for the three months ended March 31,(in millions):
| Provided by (Used in): | 2026 | 2025 |
|---|---|---|
| Operating activities | $1.1 | $(1.4) |
| Investing activities | $(0.1) | $(0.5) |
| Financing activities | $(0.1) | $(0.2) |
Operating Activities
Operating activities provided $1.1 million cash for the three months ended March 31, 2026 as compared to cash used of $1.4 million for the same period in 2025.
Investing Activities
For the three months ended March 31, 2026 and 2025, we invested cash of $0.1 million and $0.5 million, respectively, principally for back-office software projects, reported as property and equipment.
Financing Activities
For the three months ended March 31, 2026, our financing activities used cash of $0.1 million in the repayment of finance lease obligations. For the three months ended March 31, 2025, our financing activities used cash of $0.1 million in the repayment of finance lease obligations and $0.1 million in the repayment of notes payable.
Liquidity and Going Concern
As of March 31, 2026, our cash and cash equivalents was $7.0 million and working capital of $1.7 million, compared to cash and cash equivalents of $6.2 million and working capital of $1.8 million as of December 31, 2025. Management has considered these historical liquidity levels and trends, including fluctuations in working capital and cash balances, in evaluating the Company’s ability to meet its future obligations.
Management identified the following conditions that raised substantial doubt about the Company’s ability to continue as a going concern:
| ● | Decline in net sales, operating losses, and negative cash flows from operations; |
| ● | Capital expenditure requirements that have historically reduced available liquidity; and |
| ● | An organizational structure that is no longer aligned with the Company’s current operating scale, resulting in inefficiencies and elevated fixed costs |
To address these conditions, management has implemented and/or plans to implement the following actions:
| ● | Capital Discipline: The Company has suspended non-essential capital expenditures, and no discretionary capital projects are planned for fiscal year 2026, which is expected to significantly reduce cash outflows. |
| ● | Cost Reduction Plan: Management has developed and begun executing a comprehensive cost reduction plan designed to better align the Company’s cost structure with its current operations. This includes cost reduction of certain functional areas and a reduction in fixed selling, general, and administrative expenses. |
| ● | Margin Improvement Initiatives: The Company is implementing targeted price increases and continues to focus on supply chain optimization to improve gross margins. |
| ● | Compensation and Cost Controls: The Company has implemented adjustments to compensation structures and other cost control measures to reduce operating expenses and improve cash flow. |
| ● | Revenue Growth Focus: Management is prioritizing initiatives aimed at stabilizing and increasing revenue to support improved operating performance and liquidity. |
| ● | ERP Systems Improvement: During 2025 we had several issues with one of our order processing systems in North America. This issue resulted in an estimated loss of over $6.0 million in revenue. The Company believes this loss in revenue affected its ability to generate operating income for the remainder of the year 2025. |
Additional Cost-Cutting measures effective March 31, 2026
The Company implemented the following additional measures effective March 31, 2026:
| ● | Director compensation — conversion to equity: On March 10, 2026, the Board of Directors approved changes to director compensation effective April 1, 2026, enabling directors to elect to receive the remaining balance of their 2026 retainer and other fees as stock grants in lieu of cash for the remainder of the calendar year. The Company received final elections from all Board members by March 13, 2026. The conversion of Board fees from cash to equity is expected to generate an annual cash preservation benefit of approximately $0.8 million, with approximately $0.6 million expected to be realized during the remainder of fiscal 2026. |
| ● | Headcount and personnel cost reductions: The Company implemented meaningful headcount-related reductions across headquarters personnel, while preserving key capabilities in finance, legal, operations, and revenue support. These reductions are expected to generate significant cost savings over the next 12 months, with a proportionate benefit anticipated over the remainder of fiscal 2026. |
| ● | Facilities and overhead actions: Management is evaluating lease renegotiation and sublease alternatives to reduce facilities expenses. |
Management has prepared cash flow projections that incorporate these plans, as well as historical liquidity trends, and reflect its best estimates of future operating performance and liquidity needs. While management plans to take appropriate actions to increase its liquidity, there can be no assurance that the Company will be successful in its efforts, and there can be no assurance that, assuming the Company is able to strengthen its cash position, it will achieve sufficient revenue or profitable operations to continue as a going concern.
In addition, while the Company continues to closely monitor the results of mitigating these plans, it is evaluating other options for external capital injection.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Long Term Liquidity
We believe our cash flows from operations should be adequate to fund our normal expected future business operations and possible international expansion costs for the long term. As our primary source of liquidity is from our cash flows from operations, this will be dependent on our ability to maintain or improve revenue as compared to operational expenses.
However, if our existing capital resources or cash flows become insufficient to meet anticipated business plans and existing capital requirements, we may be required to raise additional funds, which may not be available on favorable terms, if at all.
Our future access to the capital markets may be adversely impacted if we fail to maintain compliance with the Nasdaq Marketplace Rules for the continued listing of our stock. We continuously monitor our compliance with the Nasdaq continued listing rules.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any special-purpose entity arrangements, nor do we have any off-balance sheet arrangements.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.