MANNATECH INC

Cash and Cash Equivalents

As of June 30, 2026, our cash and cash equivalents decreased by 2.4%, or $0.2 million, to $6.0 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 June 30, 2026 and December 31, 2025, respectively. The long-term portion of restricted cash balances was $0.2 million at each of June 30, 2026 and December 31, 2025

Our principal use of cash is to pay for operating expenses, including commissions and incentives, capital assets, and inventory purchases. 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 June 30, 2026 and December 31, 2025, our working capital was $2.5 million and $1.8 million, respectively.

Net Cash Flows

Our net consolidated cash flows consisted of the following, for the six months ended June 30,(in millions):

Operating Activities

Operating activities provided $0.3 million cash for the six months ended June 30, 2026 as compared to cash used of $5.1 million for the same period in 2025.

Investing Activities

For the six months ended June 30, 2026 and 2025, we invested cash of $0.1 million and $0.6 million, respectively, principally for back-office software projects, reported as property and equipment.

Financing Activities

For the six months ended June 30, 2026, our financing activities provided cash of $0.1 million. For the six months ended June 30, 2026, $0.4 million of cash was provided for borrowing from notes payable, which was offset by the use of $0.2 million in the repayment of finance lease obligations and $0.1 million in the repayment of notes payable. For the six months ended June 30, 2025, our financing activities used cash of $0.2 million in the repayment of finance lease obligations.

Liquidity and Going Concern

As of June 30, 2026, our cash and cash equivalents was $6.0 million and working capital of $2.5 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. For the six months ended June 30, 2026, the Company’s net use of cash was reduced to $0.5 million, a decrease of approximately 91% compared to a net use of $5.8 million for the six months ended June 30, 2025, representing the most significant improvement in the Company’s liquidity trend reflected in these financial statements.

Management identified the following conditions that raised substantial doubt about the Company’s ability to continue as a going concern:

To address these conditions, management has implemented and/or plans to implement the following actions:

Additional Cost-Cutting measures effective March 31, 2026

The Company implemented the following additional measures effective March 31, 2026:

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. The Company has implemented the largest component of its cost reduction plan, the headcount-related reductions described above, and has achieved a $2.5 million reduction in selling and administrative expenses for the six months ended June 30, 2026. Net sales increased 3.8% for the three months ended June 30, 2026, as compared to the same period in 2025. 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, or that management will be able to execute the remainder of its plan, or 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.