Sales Performance - Net sales for Q2 2024 decreased by $4.9 million (14.9%) to $27.7 million compared to $32.6 million in Q2 2023, primarily due to supply chain constraints and economic weakening in Asia[3] - Asia/Pacific region sales accounted for 57.4% of total sales in Q2 2024, down from 59.2% in Q2 2023, reflecting weaker economic conditions[10] - Q2 2024 GAAP net sales were $27.7 million, with a constant dollar adjustment of $0.7 million, resulting in non-GAAP net sales of $28.4 million, a 12.9% decrease compared to Q2 2023[12] - YTD 2024 GAAP net sales were $57.1 million, with a constant dollar adjustment of $1.5 million, resulting in non-GAAP net sales of $58.6 million, a 12.1% decrease compared to YTD 2023[13] Profitability and Margins - Gross profit margin decreased to 77.1% in Q2 2024 from 78.5% in Q2 2023, driven by increased freight costs and sales promotions[3] - Q2 2024 GAAP gross profit was $21.4 million, with a constant dollar adjustment of $0.5 million, resulting in non-GAAP gross profit of $21.9 million, a 14.5% decrease compared to Q2 2023[12] - YTD 2024 GAAP gross profit was $44.5 million, with a constant dollar adjustment of $1.2 million, resulting in non-GAAP gross profit of $45.7 million, a 12.6% decrease compared to YTD 2023[13] Expenses and Costs - Commission expenses decreased by 12.5% ($1.6 million) to $11.1 million in Q2 2024, but as a percentage of net sales, it increased to 40.0% from 38.9% in Q2 2023[3] - Selling and administrative expenses decreased by 17.0% ($2.2 million) to $10.9 million in Q2 2024, with payroll costs reduced by $0.9 million and legal fees by $0.7 million[3] Net Loss and Operational Performance - Net loss for Q2 2024 was $0.6 million ($0.33 per diluted share), compared to a net loss of $1.1 million ($0.59 per diluted share) in Q2 2023[3] - Q2 2024 GAAP loss from operations was $1.1 million, with a constant dollar adjustment of $0.1 million, resulting in non-GAAP loss from operations of $1.0 million, unchanged from Q2 2023[12] - YTD 2024 GAAP loss from operations was $0.3 million, with a constant dollar adjustment of $0.4 million, resulting in non-GAAP income from operations of $0.1 million, a 150.0% change compared to YTD 2023[13] Cash and Financial Position - Cash and cash equivalents increased by 18.9% ($1.5 million) to $9.2 million as of June 30, 2024, compared to $7.7 million at the end of 2023[3] - Foreign exchange gains contributed $1.1 million in Q2 2024, including a one-time gain of $0.2 million from the liquidation of the company's entity in Sweden[3] Associate and Customer Metrics - The number of independent associates and preferred customers remained constant at approximately 142,000 as of June 30, 2024, with a 21% decrease in associate attrition rate[5] Outlook and Strategy - The company expects continued economic challenges for the remainder of 2024 but remains committed to increasing revenues through disciplined cost controls and expanding its sales network[6]

Financial Performance - Consolidated net sales for Q2 2024 were $27.7 million, a decrease of $4.9 million or 14.9% compared to Q2 2023's $32.6 million[75]. - For the first half of 2024, consolidated net sales were $57.1 million, down $9.6 million or 14.4% from $66.7 million in the same period of 2023[75]. - The company achieved a net loss of $0.6 million for Q2 2024, an improvement from a net loss of $1.1 million in Q2 2023[75]. - For the first half of 2024, the company reported a net income of $0.6 million, compared to a net loss of $0.5 million in the same period of 2023[75]. - For the three months ended June 30, 2024, consolidated net sales decreased by $4.9 million, or 15.0%, to $27.7 million compared to $32.6 million for the same period in 2023[82]. - For the six months ended June 30, 2024, consolidated net sales decreased by $9.6 million, or 14.4%, to $57.1 million compared to $66.7 million for the same period in 2023[84]. Cost and Expenses - Gross profit margin decreased by 1.4% due to supply chain disruptions, leading to increased fulfillment costs[75]. - Commissions and incentives decreased by $1.8 million or 13.4% in Q2 2024 compared to Q2 2023[77]. - Selling and administrative expenses were reduced by $2.2 million or 17.0% in Q2 2024 compared to Q2 2023[77]. - Commission expense for Q2 2024 decreased by 12.5% to $11.1 million from $12.7 million in Q2 2023, while as a percentage of net sales, it increased to 40.0% from 38.9%[93]. - Selling and administrative expenses for Q2 2024 decreased by 17.0% to $10.9 million from $13.1 million in Q2 2023, with expenses as a percentage of net sales decreasing to 39.1% from 40.1%[94]. Sales and Revenue Trends - Net sales in the Americas for the three months ended June 30, 2024, decreased by $1.1 million, or 10.4%, to $9.5 million, while Asia/Pacific net sales decreased by $3.4 million, or 17.6%, to $15.9 million[84]. - Revenue per active independent associate and preferred customer decreased by 13.3% for the three months ended June 30, 2024, partially offset by a 3.3% increase in the number of active independent associates and preferred customers[84]. - Recruitment of new independent associates and preferred customers decreased by 13.6% to 16,690 in the second quarter of 2024 from 19,309 in the second quarter of 2023[89]. - Product sales for the three months ended June 30, 2024, decreased by $4.7 million, or 15.2%, reflecting a 7.9% decrease in the number of orders processed[88]. - For the six months ended June 30, 2024, product sales decreased by $8.7 million, or 13.8%, with a decrease in average order value to $167 compared to $179 for the same period in 2023[88]. Foreign Currency and Tax - Foreign currency gains contributed $1.1 million in Q2 2024, including a one-time gain of $0.2 million from the liquidation of the Swedish entity[75]. - Foreign exchange gains for Q2 2024 were $1.1 million compared to $0.2 million in Q2 2023, and for the six months ended June 30, 2024, gains were $2.0 million compared to $0.5 million in the same period in 2023[96]. - Income tax expense for Q2 2024 was $0.5 million, up from $0.3 million in Q2 2023, with an effective tax rate of (277.4)% for Q2 2024 compared to (20.8)% for Q2 2023[97][98]. - As of June 30, 2024, there were no uncertain income tax positions recorded in long-term liabilities, indicating a stable tax position[113]. - The company has ongoing income tax audits in various international jurisdictions, which are not expected to materially affect financial statements[113]. Cash Flow and Working Capital - Cash and cash equivalents increased by 18.9% to $9.2 million as of June 30, 2024, from $7.7 million as of December 31, 2023[100]. - Working capital improved to $4.0 million as of June 30, 2024, up from $1.9 million as of December 31, 2023[101]. - Operating activities used $0.8 million in cash for the six months ended June 30, 2024, an improvement from $1.3 million used in the same period in 2023[102]. - Financing activities provided cash of $3.1 million for the six months ended June 30, 2024, compared to a cash use of $1.3 million in the same period in 2023[104]. Business Operations and Strategy - The company operates in 25 countries, with approximately 142,000 active associates and preferred customers[74]. - The subsidiary in China operates under a traditional retail model due to regulatory constraints on direct selling[74]. - The company has established a 2024 business reorganization plan focusing on revenue growth, margin improvement, and cost control[107]. - The company has a supply agreement requiring a minimum purchase of $2.6 million through 2025, with no purchase commitments thereafter[107]. Inventory and Revenue Recognition - The company monitors inventory for obsolescence and adjusts reserves based on actual sales compared to projections, mitigating potential losses[112]. - The company recognizes revenue from shipped products upon receipt by the customer, with deferred revenue recorded for orders shipped but not yet delivered[114]. - The company allocates transaction prices between product sales and loyalty programs based on standalone selling prices, ensuring accurate revenue recognition[115]. - Historical sales returns have averaged 0.5% or less of gross sales, reflecting a consistent return policy and customer satisfaction[116]. - The product return policy allows retail customers in the U.S. and Canada to return products for a full refund within 180 days, promoting customer confidence[116]. Risk Management - The company does not engage in trading market risk-sensitive instruments and has not issued any debt instruments, indicating a conservative financial strategy[118]. - Currency exchange rate fluctuations may impact consolidated financial results, with the company maintaining cash in foreign currencies to manage anticipated requirements[118]. - The company uses historical delivery data to estimate order delivery dates, which could materially impact revenue if assumptions change[114].

Financial Performance - Q1 2024 net sales were $29.4 million, a decrease of $4.7 million or 13.8% compared to $34.1 million in Q1 2023[5] - Gross profit margin increased to 78.6% in Q1 2024 from 78.3% in Q1 2023, attributed to reduced freight and shipping costs[5] - Operating income for Q1 2024 was $0.8 million, compared to $0.7 million in the same period last year[5] - Net income for Q1 2024 was $1.2 million, or $0.63 per diluted share, compared to $0.6 million, or $0.32 per diluted share in Q1 2023[5] - Cash and cash equivalents increased by 2.3%, or $0.2 million, to $7.9 million as of March 31, 2024[5] - The company reported a foreign exchange gain of $0.8 million in Q1 2024, contributing to net income[4] Recruitment and Market Conditions - The number of independent associates and preferred customers remained constant at approximately 143,000, with a 13.6% decline in recruiting compared to Q1 2023[5] - The Asia/Pacific region experienced the most significant revenue decline, reflecting weak economic conditions and reduced recruiting efforts[4] - Mannatech anticipates continued economic challenges for the remainder of 2024 but aims to increase revenues through expanding its sales associate and preferred customer base[4] Liabilities - Total liabilities decreased slightly from $30.722 million as of December 31, 2023, to $30.613 million as of March 31, 2024[12]

Financial Performance - Consolidated net sales for Q1 2024 were $29.4 million, a decrease of $4.7 million or 13.8% compared to $34.1 million in Q1 2023[113] - Net income for Q1 2024 was $1.2 million, or $0.63 per diluted share, compared to $0.6 million, or $0.32 per diluted share in Q1 2023, representing a 95.4% increase[115] - Gross profit for Q1 2024 was $23.1 million, a decrease of $3.6 million or 13.5% compared to $26.7 million in Q1 2023[116] - Operating income for Q1 2024 was $0.8 million, an increase of $0.1 million or 15.0% compared to $0.7 million in Q1 2023[114] - Product sales for Q1 2024 decreased by $4.0 million or 12.5%, reflecting a 7.1% decrease in the number of orders processed[125] Regional Performance - Net sales in the Asia/Pacific region decreased by $4.0 million or 19.0% to $17.1 million, primarily due to a 21.9% decrease in revenue per active independent associate and preferred customer[122] - The Americas accounted for 34.7% of consolidated net sales in Q1 2024, down from 30.8% in Q1 2023, with net sales decreasing by $0.3 million or 2.9%[121] - The company’s operations outside of the Americas accounted for approximately 65.3% of consolidated net sales in Q1 2024, down from 69.2% in Q1 2023[120] Associate and Customer Metrics - The number of new independent associates and preferred customers recruited decreased by 13.6% to 16,027 in Q1 2024 from 18,547 in Q1 2023[126] - Revenue per active independent associate and preferred customer decreased by 4.4% in the Americas, while the number of active associates and preferred customers increased by 1.6%[121] Expenses and Cash Flow - Commission expense decreased by 13.4%, or $1.7 million, to $11.2 million for the three months ended March 31, 2024, compared to $12.9 million for the same period in 2023[132] - Selling and administrative expenses decreased by $1.9 million, or 15.5%, to $10.1 million for the three months ended March 31, 2024, from $12.0 million in the same period in 2023[135] - Cash and cash equivalents increased by 2.3%, or $0.2 million, to $7.9 million as of March 31, 2024, from $7.7 million as of December 31, 2023[142] - Operating activities provided $1.9 million cash for the three months ended March 31, 2024, compared to $1.4 million for the same period in 2023[146] Tax and Working Capital - The effective tax rate for the three months ended March 31, 2024, was 36.0%, down from 43.6% for the same period in 2023[139] - Working capital increased to $2.1 million as of March 31, 2024, from $1.9 million as of December 31, 2023[144] Supply Agreements and Financial Instruments - The company has a supply agreement requiring a total purchase of $3.4 million through 2025[150] - The company authorized unsecured Loan and Promissory Note agreements totaling $3.6 million for general working capital needs[154] Revenue Recognition and Return Policies - The company recognizes revenue from shipped products upon receipt by the customer, with deferred revenue recorded for orders shipped but not yet delivered[164] - The product return policy allows retail customers in the U.S. and Canada to return products for a full cash refund within 180 days, while other countries have a 90-day return window[169] - Historical estimates of sales returns have averaged 0.5% or less of gross sales, reflecting consistent return policies[168] - The estimated sales return reserve is based on historical experience over a rolling six-month period, which could materially affect revenue if actual results differ[168] Market Risk and Currency Exchange - The company does not engage in trading market risk-sensitive instruments, maintaining a conservative approach to market risk exposure[170] - The company monitors foreign currency exchange rate risks across multiple regions, including the Americas, EMEA, and Asia/Pacific[173] - The average currency exchange rates for the three months ended March 31, 2024, show fluctuations against the U.S. dollar, with the Canadian dollar averaging 0.74205 and the British pound averaging 1.26847[171] Performance Obligations - The product sales placed through automatic orders contain two performance obligations, with revenue allocated based on relative standalone selling prices[165] - The company provides associates with a complimentary three-month package for online business tools upon the first payment of an associate fee, which includes multiple performance obligations[165]

Business Operations - As of December 31, 2023, Mannatech had approximately 145,000 active associate and preferred customer positions[23]. - The company operates a non-direct selling business in mainland China through its subsidiary, Meitai, which utilizes a cross-border e-commerce model[24]. - Mannatech operates in three regions: the Americas, EMEA, and Asia/Pacific, with a focus on controlled international expansion[22]. - The company employed 213 full-time employees as of December 31, 2023, down from 228 in 2022, indicating a reduction of approximately 6.6%[126]. - The company has third-party distribution agreements in the Americas, EMEA, and Asia/Pacific to enhance operational flexibility and minimize shipping costs[215]. Product Development - Mannatech's product offerings include proprietary nutritional supplements, skin care, anti-aging products, and weight-management products, with significant revenue derived from Ambrotose, Ambrotose Life, and TruHealth[36]. - The company continues to focus on product development, considering factors such as marketability, demand, and regulatory considerations[40]. - Mannatech's product development team is exploring new products and compounds to promote overall health and wellness[38]. - Mannatech introduced several new products in 2023, including the Korean Luminovation skincare line in the U.S. and Australia, and Sleep and Stress Support gummies[36]. - The company focuses on developing high-quality, innovative proprietary products based on scientific findings related to glyconutrients[44]. Regulatory Compliance - The company is subject to extensive regulations in the U.S. and other countries, including oversight by the FDA and FTC[80][86]. - The Modernization of Cosmetics Regulation Act of 2022 expands FDA oversight of the cosmetic industry, with most requirements effective December 2023[82]. - The company must comply with various regulations across different markets, including consumer protection and product safety laws[114]. - The company is subject to evolving laws regarding independent contractor status, which could result in additional financial obligations if associates are deemed employees[178]. - The company is currently exempt from the Business Opportunity Rule, but potential changes could impose burdensome administrative disclosure obligations[173]. Financial Performance - The company aims to strengthen financial results by increasing revenues in both domestic and foreign operations while controlling operating costs[58]. - The company is subject to liquidity risk, which could adversely affect its financial condition and results of operations[161]. - The company experienced a 2.1% decrease in net sales on a Constant dollar basis for 2023, with unfavorable foreign exchange causing a $2.3 million decrease in GAAP net sales compared to 2022[166]. - As of December 31, 2023, cash and cash equivalents held in foreign bank accounts totaled $3.5 million, down from $11.3 million in 2022[159]. - The company may be held responsible for taxes related to independent associates, which could harm its financial condition and operating results[177]. Associate Management - The company provides extensive training and support services to independent associates to enhance their productivity and retention[68]. - The global associate career and compensation plan offers commissions and incentives ranging from 35% to 43% of consolidated net sales[70]. - The plan includes six types of commissions based on a point system related to independent associates' commissionable direct and indirect net product sales[71]. - The company’s ability to attract and retain independent associates is critical for growth, with several factors influencing this dynamic[129]. - The loss of high-level independent associate leaders could negatively impact associate growth and revenue, highlighting the importance of retention strategies[130]. Market Challenges - The company faces intense competition in the nutritional supplement industry, with key competitors including Herbalife Nutrition Ltd. and GNC Holdings, Inc.[122]. - Economic downturns, including those related to COVID-19, could adversely affect consumer purchases of discretionary health and wellness products[151]. - The company faces intense competition in the global nutrition and skin care industries, which could impact market share and profitability[150]. - The Republic of Korea is the largest market for the company, with potential adverse effects from economic declines or regulatory changes in this region[148]. - The company experienced challenges in obtaining certain materials and ingredients due to global transportation capacity reductions from 2020 to 2023, impacting product availability[142]. Corporate Governance - As of December 31, 2023, directors and executive officers collectively own approximately 45.1% of the total outstanding common stock, potentially influencing corporate decisions[198]. - The company has implemented anti-takeover provisions that may deter unsolicited acquisition proposals, including the ability to issue preferred stock without shareholder approval[199]. - The common stock is currently listed on The Nasdaq Global Select Market, and failure to comply with continued listing standards could lead to delisting and reduced liquidity[201]. - The company is classified as a "smaller reporting company," which may result in less comprehensive disclosures and potentially less attractive stock for investors[204]. Cybersecurity - The cybersecurity program is integrated into the overall risk management systems, focusing on managing and mitigating material cybersecurity threats[207]. - The Senior Director of IT Operations oversees the cybersecurity governance program, ensuring effective management of cybersecurity risks[210]. - Management is not currently aware of any cybersecurity threats that have materially affected the business, although attempts at cyber intrusions are ongoing[212]. - The Board of Directors oversees the cybersecurity risk management program, ensuring compliance with disclosure obligations and monitoring of risks[213]. Supply Chain Management - The company has a supply agreement requiring a minimum purchase of $4.2 million in aloe vera-based raw materials through 2024, with potential loss of exclusivity if not met[143]. - The company relies on outside suppliers for raw materials, and any loss of significant suppliers could lead to product shortages[142]. - Mannatech contracts with third parties for manufacturing, allowing flexibility in production capacity and cost control[38]. - The company maintains rigorous product safety and quality standards, but failures by contract manufacturers could lead to costly remediation efforts[141]. Legal and Regulatory Issues - The FTC issued a letter to the company regarding false or misleading income claims, which could lead to civil monetary penalties of up to $43,792 per violation[171]. - The company has experienced inquiries regarding specific independent associates, indicating ongoing regulatory scrutiny in the direct selling industry[183]. - The company must comply with extensive laws and regulations concerning product formulation, labeling, and marketing, which could impact its ability to operate effectively[185]. - Increased regulatory scrutiny of nutritional supplements may impose additional restrictions and increase operational costs for the company[192]. - The company is subject to new regulations in various markets, including Europe and South Africa, which may impose additional requirements and scrutiny on nutritional supplements[193].

Financial Performance - Consolidated net sales for Q3 2023 decreased by $2.9 million, or 8.3%, to $32.6 million compared to $35.5 million in Q3 2022[110] - For the nine months ended September 30, 2023, net sales decreased by $3.6 million, or 3.5%, to $99.3 million from $102.9 million in the same period in 2022[116] - The company reported a net income of $18, a decline of 98.5% from $1.2 million in Q3 2022[112] - For the nine months ended September 30, 2023, the company reported a net loss of $483, compared to a net income of $2.0 million in the same period in 2022[113] - For the nine months ended September 30, 2023, gross profit decreased by $2.2 million, or 2.8%, to $78.2 million compared to $80.4 million for the same period in 2022[141] Sales and Revenue Breakdown - Net sales outside the Americas accounted for approximately 67.2% of consolidated net sales in Q3 2023[110] - The company operates in three regions: Americas, EMEA, and Asia/Pacific, with Asia/Pacific contributing 60.1% of net sales in Q3 2023[117] - For the nine months ended September 30, 2023, net sales in the Americas increased by $1.2 million, or 3.9%, to $31.8 million compared to $30.6 million for the same period in 2022[119] - For the nine months ended September 30, 2023, Asia/Pacific net sales decreased by $3.2 million, or 5.1%, to $60.0 million compared to $63.2 million for the same period in 2022[123] - For the nine months ended September 30, 2023, EMEA net sales decreased by $1.6 million, or 17.6%, to $7.5 million compared to $9.1 million for the same period in 2022[125] Operating Expenses - Operating expenses for Q3 2023 totaled $25.8 million, a decrease of $984,000 or 3.7% from $26.7 million in Q3 2022[112] - Commissions and incentives for Q3 2023 were $13.2 million, a decrease of 7.5% from $14.2 million in Q3 2022[112] - Commission expense for Q3 2023 decreased by 7.9% to $12.4 million, while as a percentage of net sales, it increased to 38.2% from 38.1% in Q3 2022[143] - Selling and administrative expenses for Q3 2023 increased by 4.4% to $6.9 million, with expenses as a percentage of net sales rising to 21.3% from 18.7% in Q3 2022[148] - Other operating costs for Q3 2023 increased by 1.1% to $5.2 million, with costs as a percentage of net sales increasing to 15.9% from 14.4% in Q3 2022[151] Cash Flow and Liquidity - For the nine months ended September 30, 2023, net cash flows from operating activities were negative at $(1.0) million, compared to positive cash flow of $0.5 million in the same period of 2022[164] - Cash and cash equivalents decreased by 42.5% to $7.9 million as of September 30, 2023, from $13.8 million at the end of 2022[160] - The company has suspended the payment of quarterly dividends to preserve approximately $0.4 million in cash[161] Currency and Market Risks - Foreign currency exchange had a negative impact on revenue, decreasing it by $2.0 million for the nine months ended September 30, 2023, primarily due to the weakening of the Korean Won, Japanese Yen, and Australian Dollar[123] - The company is exposed to currency exchange rate fluctuations, which could positively or negatively affect consolidated financial results[193] - The average currency exchange rates for various countries as of September 30, 2023, include Australia at 0.66907, Canada at 0.74331, and the United Kingdom at 1.24459[193] - The company closely monitors exposure to currency fluctuations across various regions including the Americas, EMEA, and Asia/Pacific[195] Shareholder Information - As of September 30, 2023, the company had 108,468 shares available for future stock option grants and granted 5,000 stock options during the nine months ended September 30, 2023[190] - The estimated fair value per stock option granted was $4.32, with an annualized dividend yield of 6.4%, a risk-free rate of return of 4.0%, and common stock price volatility of 66.5%[189] Internal Controls and Compliance - No changes in internal control over financial reporting during the quarter ended September 30, 2023, that materially affected the internal control[197] - The company has effective disclosure controls and procedures to ensure timely reporting of required information[196] - Management has concluded that the disclosure controls are effective as of the end of the reporting period[196] - The company does not have any recorded uncertain income tax positions as of September 30, 2023, and is subject to periodic audits from multiple tax authorities[180]

Financial Performance - Consolidated net sales for Q2 2023 decreased by $2.4 million, or 6.8%, to $32.6 million compared to $35.0 million in Q2 2022[107] - For the first half of 2023, consolidated net sales decreased by $0.7 million, or 1.0%, to $66.7 million compared to $67.4 million in the same period of 2022[113] - The company reported a net loss of $1.1 million in Q2 2023, compared to a net income of $0.7 million in Q2 2022, marking a decrease of 259.2%[109] - For the first half of 2023, the company reported a net loss of $0.5 million, compared to a net income of $0.8 million in the same period of 2022, a decrease of 160.5%[110] Sales Breakdown - Net sales outside the Americas accounted for approximately 67.5% of consolidated net sales in Q2 2023[107] - The company’s operations in the Asia/Pacific region generated $19.3 million in net sales for Q2 2023, accounting for 59.2% of total sales[114] - For the six months ended June 30, 2023, net sales in the Americas increased by $1.6 million, or 8.2%, to $21.1 million compared to $19.5 million for the same period in 2022[116] - For the three months ended June 30, 2023, Asia/Pacific net sales decreased by $3.4 million, or 15.0%, to $19.3 million compared to $22.7 million for the same period in 2022[119] - For the six months ended June 30, 2023, EMEA net sales decreased by $0.9 million, or 14.8%, to $5.2 million compared to $6.1 million for the same period in 2022[122] Profitability and Expenses - Gross profit for Q2 2023 was $25.6 million, representing 78.5% of net sales, compared to $27.1 million, or 77.4%, in Q2 2022[109] - Operating expenses for Q2 2023 increased by 1.3% to $26.5 million, representing 81.4% of net sales, compared to 74.9% in Q2 2022[109] - For the six months ended June 30, 2023, gross profit remained constant at $52.3 million, with gross profit as a percentage of net sales increasing to 78.4% compared to 77.7% for the same period in 2022[138] - Commissions and incentives for Q2 2023 were $13.5 million, representing 41.3% of net sales, compared to $14.1 million, or 40.4%, in Q2 2022[109] - Commission expense for the three months ended June 30, 2023 decreased by 3.8% to $12.7 million, while as a percentage of net sales, it increased to 38.9% from 37.7% in the same period of 2022[139] - Selling and administrative expenses for the three months ended June 30, 2023 increased by 5.0% to $7.2 million, with expenses as a percentage of net sales rising to 22.3% from 19.8% in the same period of 2022[144] - Other operating costs for the three months ended June 30, 2023 increased by 12.0% to $5.4 million, with costs as a percentage of net sales increasing to 16.7% from 13.9% in the same period of 2022[147] Cash Flow and Working Capital - Cash and cash equivalents decreased by 32.0% to $9.4 million as of June 30, 2023, down from $13.8 million as of December 31, 2022[157] - Working capital decreased to $3.0 million as of June 30, 2023, compared to $5.1 million as of December 31, 2022[159] - Net cash flows from operating activities for the six months ended June 30, 2023 were $(1.3) million, compared to $1.5 million for the same period in 2022[160] Associate and Customer Metrics - The number of active independent associates and preferred customers declined by 10.9% for the six months ended June 30, 2023[116] - Recruitment of new independent associates and preferred customers decreased by 2.6% to 19,309 in the second quarter of 2023 from 19,823 in the second quarter of 2022[133] Inventory and Revenue Recognition - Inventory is stated at the lower of cost or market, with management using judgment to determine net realizable value based on factors like inventory turnover and consumer demand[174] - The company recognizes revenue from product sales upon receipt by the customer, with a reserve for expected sales returns based on historical experience[177] - Historically, sales returns have averaged 1.5% or less of gross sales, with estimates not materially deviating from actual returns[182] Tax and Compliance - The effective tax rate for the three months ended June 30, 2023 was (20.8)%, compared to 12.4% for the same period in 2022[153] - The company has no recorded uncertain income tax positions as of June 30, 2023, and is subject to periodic audits from various tax authorities[176] Currency and Market Risk - Currency exchange rate fluctuations could positively or negatively affect consolidated financial results, with exposure in regions including the Americas, EMEA, and Asia/Pacific[189] - The average currency exchange rates for various countries as of June 30, 2023, include the Australian Dollar at 0.67619 and the British Pound at 1.23329[191] - The company maintains a portion of cash and cash equivalents in foreign currencies to meet anticipated working capital requirements[190] - The company closely monitors exposure to currency fluctuations across various regions, including the Americas, EMEA, and Asia/Pacific[191] Internal Controls and Governance - No changes in internal control over financial reporting during the quarter ended June 30, 2023, that materially affected internal controls[193] - The company has effective disclosure controls and procedures to ensure timely reporting of required information[192] - Management has concluded that the disclosure controls are effective as of the end of the reporting period[192]

Financial Performance - Consolidated net sales for the three months ended March 31, 2023 increased by $1.7 million, or 5.3%, to $34.1 million compared to $32.4 million for the same period in 2022[114]. - Net sales outside of the Americas accounted for approximately 69.2% of consolidated net sales for the three months ended March 31, 2023, up from 68.2% in the same period in 2022[116]. - Average product order value increased by 3.4%, reaching $185 for the three months ended March 31, 2023, compared to $179 for the same period in 2022[110]. - Income from operations for the three months ended March 31, 2023 was $713,000, a significant increase of 1,937.1% compared to $35,000 for the same period in 2022[111]. - Net income for the three months ended March 31, 2023 was $604,000, representing a 350.7% increase from $134,000 in the same period in 2022[111]. - Asia/Pacific net sales increased by $2.0 million, or 10.5%, to $21.1 million for the three months ended March 31, 2023, driven by a promotion that generated $3.3 million in sales[117]. - EMEA net sales decreased by $0.5 million, or 16.7%, to $2.5 million for the three months ended March 31, 2023, primarily due to an 18.5% decrease in the number of active independent associates and preferred customers[118]. Sales and Orders - The number of orders processed decreased by 3.7%, totaling 182,681 for the three months ended March 31, 2023, compared to 189,700 for the same period in 2022[122]. - Commissions and incentives for the three months ended March 31, 2023 were $13.6 million, accounting for 39.7% of net sales, compared to $13.1 million or 40.5% in the same period in 2022[111]. - Consolidated pack sales and associate fees increased by $0.8 million, or 61.5%, to $2.1 million for the three months ended March 31, 2023[120]. - Total pack sales and associate fees for the three months ended March 31, 2023 increased by $0.8 million, or 61.5%, to $2.1 million compared to $1.3 million for the same period in 2022[125]. - The number of new independent associates and preferred customers decreased by 8,000, or 5.1%, to 143,000 for the twelve months ended March 31, 2023, compared to 157,000 for the same period in 2022[127]. Profitability and Expenses - Gross profit for the three months ended March 31, 2023 increased by $1.4 million, or 5.6%, to $26.7 million, with gross profit as a percentage of net sales rising to 78.3%[130]. - Commission expense for the three months ended March 31, 2023 increased by 4.9%, or $0.6 million, to $12.9 million, while commissions as a percentage of net sales decreased to 37.9%[131]. - Selling and administrative expenses decreased by $0.5 million, or 7.1%, to $6.4 million, with expenses as a percentage of net sales decreasing to 18.8%[134]. - Other operating costs increased by $0.7 million, or 14.6%, to $5.6 million, with costs as a percentage of net sales increasing to 16.5%[136]. Cash Flow and Liquidity - Operating cash flows improved to $1.4 million for the three months ending March 31, 2023, compared to $0.6 million for the same period in 2022[148]. - Cash and cash equivalents decreased by 0.7%, or $0.1 million, to $13.7 million as of March 31, 2023, from $13.8 million as of December 31, 2022[144]. - The company believes cash flows from operations will be adequate to fund normal expected future business operations, dependent on maintaining or improving revenue relative to operational expenses[159]. - If existing capital resources become insufficient, the company may need to raise additional funds, which may not be available on favorable terms[160]. Tax and Obligations - The effective tax rate for the three months ended March 31, 2023 was 43.6%, significantly higher than the 0.7% effective tax rate for the same period in 2022[141]. - The company has a supply agreement requiring a total purchase of $4.5 million through 2023 and $2.6 million annually through 2024[154]. - The company has pension obligations of $1.0 million related to its employee benefit plan at the Japan subsidiary, included in Other long-term liabilities[156]. Risks and Uncertainties - Prolonged workforce disruptions and supply chain issues could negatively impact sales and liquidity, although the extent of this impact is currently unknown[158]. - As of March 31, 2023, there were no uncertain income tax positions recorded in other long-term liabilities on the consolidated balance sheet[167]. Revenue Recognition and Returns - Revenue is recognized from product sales upon receipt by the customer, with a reserve for expected sales returns based on historical experience[168]. - Historically, sales returns have averaged 1.5% or less of gross sales, and estimates for sales returns have not materially deviated from actual returns[173]. Stock Options and Market Risks - The company had 113,468 shares available for future stock option grants as of March 31, 2023, with no stock options granted during the three months ended March 31, 2023[176]. - The company does not engage in trading market risk-sensitive instruments and has not issued any debt instruments or entered into any hedging contracts[179]. - Changes in foreign currency exchange rates could positively or negatively affect consolidated net sales and related costs, as the company translates revenues and expenses in foreign markets using an average rate[180]. - The company is exposed to currency exchange rate fluctuations, particularly in regions including the Americas, EMEA, and Asia/Pacific[182]. - The company maintains policies to monitor market risks but does not use financial instruments to manage exposure[181]. Internal Controls - There were no changes in internal control over financial reporting during the quarter ended March 31, 2023[184]. - The company has concluded that its disclosure controls and procedures are effective as of the end of the reporting period[183].

Financial Performance - Mannatech reported net sales of $68.9 million for 2022, representing 50.2% of total net sales from key products including Ambrotose Life and TruHealth[38]. - Revenue from key products such as Ambrotose Life, TruHealth, Advanced Ambrotose, Manapol Powder, and Optimal Support Packets totaled $68.9 million in 2022, accounting for 50.2% of net sales, compared to $78.7 million and 49.2% in 2021[143]. - Net sales decreased by $22.6 million, or 14.1%, in 2022 compared to 2021, with a constant dollar decline of $12.1 million, or 7.6%[218]. - Gross profit fell to $104.1 million, representing 75.9% of net sales, down from $125.6 million and 78.6% in 2021, a decrease of $21.5 million or 17.1%[221]. - The company reported a net loss of $4.5 million, or 3.3% of net sales, compared to a net income of $9.8 million, or 6.2% in 2021, reflecting a decline of $14.3 million or 145.6%[221]. - The income tax provision showed a significant increase in loss, amounting to $4.0 million, compared to a benefit of $0.95 million in 2021, a change of 522.2%[221]. - The company experienced a $10.5 million decrease in GAAP net sales due to unfavorable foreign exchange impacts[218]. Product Sales and Development - Ambrotose Life generated $28.7 million in sales for 2022, accounting for 20.9% of total net sales, compared to $28.8 million and 18.0% in 2021[38]. - Mannatech's revenue from its top five products, including Ambrotose Life and TruHealth, showed a slight decrease from $78.7 million in 2021 to $68.9 million in 2022[38]. - The company focuses on developing high-quality, innovative proprietary products based on scientific research, particularly in glyconutrients[44]. - Mannatech's product offerings include categories like Integrative Health, Targeted Health, and Weight and Fitness, with a focus on natural and scientifically based ingredients[33][34]. - The company continues to enhance existing products, such as the relaunch of EMPACT+ and Enzyme ProBalance, to improve market competitiveness[38]. Associate Network and Compensation - The company had approximately 145,000 active associates and preferred customer positions as of December 31, 2022, indicating a stable network marketing presence[24]. - The company plans to attract and retain independent associates through a global career and compensation plan, offering incentives for motivation[59]. - The global associate career and compensation plan offers commissions and incentives ranging from 35% to 43% of consolidated net sales[69]. - Commissions and incentives paid to independent associates range from 35% to 43% of consolidated net sales, representing a significant expense for the company[130]. - The plan includes 19 independent associate achievement levels, which are based on the growth and volume of commissionable net sales[68]. Regulatory Environment - The FDA regulates the formulation, manufacturing, and labeling of dietary supplements, which includes the company's products[78]. - The FTC requires substantiation for product claims and has enforced actions against misleading marketing practices in the dietary supplement industry[84]. - The company operates in three regions: the Americas, EMEA, and Asia/Pacific, complying with extensive regulations in each country[87]. - The company is subject to various regulations across multiple countries, including the Consumer Protection Act and Distance Selling Regulations, which govern its business practices[113]. - Increased regulatory scrutiny of nutritional supplements may impose additional restrictions and costs, affecting the company's business[188]. Supply Chain and Operational Challenges - The company faced challenges in sourcing raw materials, experiencing shortages from 2020 to 2022 due to the COVID-19 pandemic, which impacted product availability and supply chain operations[140]. - The company has approved alternate suppliers to mitigate risks associated with supply chain disruptions, but reliance on outside suppliers remains a critical factor for timely product delivery[136]. - The company experienced challenges in obtaining raw materials and distributing finished products due to global transportation capacity reductions, affecting operational efficiency[162]. - The company emphasizes the importance of maintaining flexible production strategies by contracting third-party manufacturers to meet demand fluctuations[39]. Market Competition - The company faces intense competition in the nutritional supplement industry, with key competitors including Herbalife Nutrition Ltd. and GNC Holdings, Inc.[120]. - The competitive landscape in the global nutrition and skin care industries is intense, with competitors having greater financial resources and brand recognition, potentially affecting market share[146]. Financial Management and Strategy - The company aims to strengthen financial results by increasing revenues and controlling operating costs[58]. - The company is dedicated to research and development, focusing on new product development and enhancement of existing products[61]. - The company has an ongoing share repurchase program with a remaining value of $5.847 million from an original authorization of $20 million[212]. - The company does not have a mandatory dividend policy, and the Board of Directors may choose not to declare dividends in the future[198]. Risk Factors - The company is exposed to potential product liability claims, which could exceed insurance coverage and adversely affect financial condition and cash flows[141]. - The company is at risk of being held responsible for taxes related to independent associates, which could harm financial condition and operating results[173]. - The company may face challenges from private parties regarding its network marketing system, which could impact business operations[176]. - Regulatory changes regarding network marketing could impose new compliance burdens, potentially affecting the company's business model and operations[169].

Part I [Part I – FINANCIAL INFORMATION](index=5&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive income, shareholders' equity, and cash flows, highlighting overall financial declines for 2022 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2022, reflects a decrease in total assets, primarily driven by reduced cash, and a decline in total shareholders' equity Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 (unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $15,092 | $24,185 | | Total current assets | $36,442 | $42,838 | | Total assets | $52,500 | $59,625 | | **Liabilities & Equity** | | | | Total current liabilities | $28,735 | $30,098 | | Total liabilities | $33,889 | $35,213 | | Total shareholders' equity | $18,611 | $24,412 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The statements of operations show a decline in net sales, gross profit, and net income for both the three and nine months ended September 30, 2022 Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $35,513 | $39,446 | $102,873 | $120,269 | | Gross profit | $28,097 | $31,543 | $80,446 | $95,018 | | Income from operations | $1,357 | $3,286 | $2,245 | $8,093 | | Net income | $1,191 | $2,930 | $2,019 | $7,253 | | Basic EPS | $0.62 | $1.54 | $1.05 | $3.63 | | Diluted EPS | $0.61 | $1.44 | $1.01 | $3.47 | [Consolidated Statements of Comprehensive (Loss) Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) The company reported a comprehensive loss for both periods ended September 30, 2022, primarily due to negative foreign currency translation adjustments Comprehensive (Loss) Income (in thousands) | Period | Net Income | Foreign Currency Translations | Comprehensive (Loss) Income | | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30, 2022** | $1,191 | $(2,561) | $(1,370) | | **Three Months Ended Sep 30, 2021** | $2,930 | $(1,254) | $1,676 | | **Nine Months Ended Sep 30, 2022** | $2,019 | $(5,395) | $(3,376) | | **Nine Months Ended Sep 30, 2021** | $7,253 | $(2,538) | $4,715 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly decreased for the nine months ended September 30, 2022, with overall cash declining due to investing and financing outflows Net Cash Flows for Nine Months Ended September 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $459 | $10,846 | | Net cash used in investing activities | $(889) | $(513) | | Net cash used in financing activities | $(3,314) | $(6,109) | | Effect of currency exchange rate changes | $(5,417) | $(2,518) | | **Net (decrease) increase in cash** | **$(9,161)** | **$1,706** | [Notes to Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed information on business operations across three regions, revenue recognition, inventory, income taxes, segment sales, and lease obligations, highlighting foreign cash holdings and loyalty program liabilities - The company operates a network marketing model for nutritional and personal care products across three geographic regions: Americas, EMEA, and Asia/Pacific. In mainland China, it operates a non-direct selling, cross-border e-commerce model[27](index=27&type=chunk)[28](index=28&type=chunk) - A significant portion of cash and cash equivalents (**$12.4 million** of **$15.1 million**) was held in foreign countries as of September 30, 2022, with a notable concentration in the Republic of Korea[36](index=36&type=chunk)[37](index=37&type=chunk) - Deferred revenue related to the customer loyalty program was **$4.2 million** as of September 30, 2022. Revenue is recognized as loyalty points are used, forfeited, or expire[54](index=54&type=chunk)[57](index=57&type=chunk) Net Sales by Region (in millions) | Region | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Americas | $11.1 | $11.2 | $30.6 | $34.5 | | Asia/Pacific | $21.4 | $24.2 | $63.2 | $74.0 | | EMEA | $3.0 | $4.0 | $9.1 | $11.8 | | **Total** | **$35.5** | **$39.4** | **$102.9** | **$120.3** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting a significant decline in net sales for Q3 and the first nine months of 2022, primarily due to a strong U.S. dollar, and analyzes regional results, profitability, liquidity, and critical accounting estimates - Overall net sales decreased **10.0%** to **$35.5 million** in Q3 2022 and **14.5%** to **$102.9 million** for the nine months ended September 30, 2022, compared to the same periods in 2021[114](index=114&type=chunk) - Foreign currency exchange had a significant negative impact, decreasing GAAP net sales by **$3.4 million** for Q3 and **$7.5 million** for the nine-month period[114](index=114&type=chunk) - On a non-GAAP Constant Dollar basis, net sales decreased by a smaller margin of **1.3%** for Q3 and **8.2%** for the nine-month period, indicating underlying operational challenges were exacerbated by currency headwinds[114](index=114&type=chunk)[120](index=120&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Operating results declined significantly for the three and nine months ended September 30, 2022, with net sales falling across all regions due to currency fluctuations and geopolitical issues, leading to compressed gross profit margins and reduced net income Net Sales by Region - Q3 2022 vs Q3 2021 (in millions) | Region | Q3 2022 | Q3 2021 | % Change | | :--- | :--- | :--- | :--- | | Americas | $11.1 | $11.2 | (0.9)% | | Asia/Pacific | $21.4 | $24.2 | (11.6)% | | EMEA | $3.0 | $4.0 | (25.0)% | | **Total** | **$35.5** | **$39.4** | **(10.0)%** | - Asia/Pacific sales were negatively impacted by **$2.9 million** from foreign currency exchange in Q3, primarily due to the weakening of the Korean Won, Japanese Yen, and Australian Dollar[127](index=127&type=chunk) - EMEA sales decline was attributed to a **25.5%** decrease in active associates, with the company believing the war in Ukraine and inflation are impacting business[129](index=129&type=chunk) - Gross profit as a percentage of net sales decreased to **79.1%** in Q3 2022 from **80.0%** in Q3 2021, due to the effects of foreign exchange on product costs and increased freight costs[145](index=145&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity weakened as cash and cash equivalents decreased to **$15.1 million** by September 30, 2022, with net cash from operations falling sharply, and cash primarily used for dividends, stock repurchases, and capital expenditures - Cash and cash equivalents decreased by **$9.1 million** to **$15.1 million** as of September 30, 2022, from **$24.2 million** at December 31, 2021[165](index=165&type=chunk) Net Cash Flows for Nine Months Ended September 30 (in millions) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Operating activities | $0.5 | $10.8 | | Investing activities | $(0.9) | $(0.5) | | Financing activities | $(3.3) | $(6.1) | - Financing activities for the first nine months of 2022 included **$1.2 million** in dividend payments and **$1.6 million** in common stock repurchases[171](index=171&type=chunk) - The company has a purchase commitment with a raw material supplier requiring purchases of **$0.4 million** through the rest of 2022 and **$5.1 million** annually through 2024[174](index=174&type=chunk) [Critical Accounting Estimates](index=36&type=section&id=Significant%20Accounting%20Policies%20and%20Critical%20Estimates) This section outlines critical accounting estimates requiring significant management judgment, including inventory reserves, uncertain tax positions, revenue recognition, sales returns, stock-based compensation, and litigation contingencies - Management's critical estimates involve inventory reserves, uncertain tax positions, revenue recognition, sales returns, stock-based compensation, and litigation contingencies[182](index=182&type=chunk) - Deferred revenue from the customer loyalty program was **$4.2 million** as of September 30, 2022[190](index=190&type=chunk) - The company estimates a sales return reserve based on historical experience, which has averaged **1.5%** or less of gross sales[194](index=194&type=chunk) - Stock-based compensation is calculated using the Black-Scholes model, which relies on subjective assumptions like stock price volatility (**63.6% - 64.9%** for recent grants) and expected option life (**4.5 years**)[195](index=195&type=chunk)[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk stems from foreign currency exchange rate fluctuations impacting international operations, which it manages by monitoring exposure and maintaining local currency cash balances rather than using financial instruments or hedges - The company's main market risk is from changes in foreign currency exchange rates against the U.S. dollar[202](index=202&type=chunk) - The company does not use any financial instruments or hedges to manage its exposure to market risk[201](index=201&type=chunk)[203](index=203&type=chunk) - Exposure to currency risk exists in the Americas (Canada, Mexico), EMEA (multiple European countries, South Africa), and Asia/Pacific (Australia, Japan, Korea, China, etc.)[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting during the third quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2022[205](index=205&type=chunk) - There were no changes during the quarter ended September 30, 2022, in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, such controls[206](index=206&type=chunk) Part II [Part II – OTHER INFORMATION](index=42&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company believes ongoing legal claims will not materially affect its financial position, requiring no legal reserve, and notes receipt of an FTC notice regarding potential claims, which was not a determination of wrongdoing - The company believes that ongoing claims from the normal course of business can be resolved without a material adverse effect[90](index=90&type=chunk)[209](index=209&type=chunk) - No legal reserve was deemed necessary at September 30, 2022[92](index=92&type=chunk) - On October 28, 2021, the company received a notice from the FTC regarding potential false or misleading income and product claims, which the FTC clarified was not a determination of wrongdoing[199](index=199&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors are disclosed in this report, with readers directed to the detailed discussion in the company's 2021 Annual Report on Form 10-K - The report refers to the risk factors discussed in Part I, "Item 1A. Risk Factors" in the company's 2021 Annual Report[210](index=210&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2022, the company repurchased **46,332** shares of common stock and approved a new **$1.5 million** share repurchase program through September 2023 Issuer Purchases of Equity Securities (Q3 2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2022 | 8,839 | $17.53 | | August 2022 | 10,080 | $20.01 | | September 2022 | 27,413 | $20.80 | | **Total** | **46,332** | | - In September 2022, the Board approved a share repurchase program to acquire up to **$1.5 million** of common stock through September 18, 2023[211](index=211&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[212](index=212&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[213](index=213&type=chunk)