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What changed in NATURAL HEALTH TRENDS CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NATURAL HEALTH TRENDS CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+150 added−134 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in NATURAL HEALTH TRENDS CORP's 2025 10-K

150 paragraphs added · 134 removed · 110 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

24 edited+6 added−4 removed102 unchanged
Biggest changeOur manufacturers are primarily located in the United States, as well as a few in South Korea, Hong Kong, Taiwan, Europe and China. Our raw materials are sourced from reputable suppliers around the world. All current and new products introduced into the market are tested to ensure country and state regulatory compliance requirements are met where the products are sold.
Biggest changeWorking closely with raw material manufacturers and contract manufacturers, our mission is to co-develop and bring to market the highest quality products. Our manufacturers are located in the United States, South Korea, Hong Kong, Taiwan, Europe and China. Our raw materials are sourced from reputable suppliers around the world.
Liquid, encapsulated, tableted and powder dietary and nutritional supplements, vitamins, minerals Premium Noni Juice, Triotein™, Cluster X2™, Children’s Chewable Multivitamin, ReStor Silver™, Glucosamine 2200™, FibeRich™, Energin, Enhanced Essential Probiotics, Omega-3 Essential Fatty Acids, StemRenu ® , OcuFocus™, CurcuMore™, Biotic Trio, Ultra B Complex, CalComplex, Collagen Supreme, MetaBoost, RelaxaPro Herbal Products formulated incorporating ingredients commonly found in traditional Chinese medicine.
Liquid, encapsulated, tableted and powder dietary and nutritional supplements, vitamins, minerals Premium Noni Juice, Triotein™, Cluster X2™, Children’s Chewable Multivitamin, ReStor Silver™, Glucosamine 2200™, FibeRich™, Energin, Enhanced Essential Probiotics, Omega-3 Essential Fatty Acids, StemRenu ® , OcuFocus™, CurcuMore™, Enhanced Biotic Trio, Ultra B Complex, CalComplex, Collagen Supreme, MetaBoost, RelaxaPro Herbal Products formulated incorporating ingredients commonly found in traditional Chinese medicine.
The markets in which we conduct business all have varied regulations that distinguish foods and nutritional health supplements from “drugs” or “pharmaceutical products.” Because of the varied regulations, some products or ingredients that are recognized as a “food” in certain markets may be treated as a “pharmaceutical” in other markets.
The markets in which we conduct business all have varied regulations that distinguish foods and nutritional health supplements from “drugs” or “pharmaceutical products.” Because of these regulations, some products or ingredients that are recognized as a “food” in certain markets may be treated as a “pharmaceutical” in other markets.
Our training material covers the needs of our members, be they prospects, new recruits, product evangelists, sales leaders or dream builders. • We have developed a year-round, multi-faceted promotional plan that targets different segments of our membership. • We have implemented a commission structure that makes it as easy as possible to join our business, while giving existing members a chance to start earning money as quickly as possible in multiple ways. • The continuously improving mentality and methodology in our customer services have not only distinguished us as an organization, but have also given us a constant flow of information as to how we can do better to service our members.
Our training material covers the needs of our members, be they prospects, new recruits, product evangelists, sales leaders or dream builders. • We have developed a year-round, multi-faceted incentive plan that targets different segments of our membership. • We have implemented a commission structure that makes it as easy as possible to join our business, while giving existing members a chance to start earning money as quickly as possible in multiple ways. • The continuously improving mentality and methodology in our customer services have not only distinguished us as an organization, but have also given us a constant flow of information as to how we can better service our members.
Our Principal Products We offer a line of “NHT Global” branded products in the following distinct categories: wellness, herbal, beauty, lifestyle, home, daily and at home tests.
Our Principal Products We offer a line of “NHT Global” branded products in the following distinct categories: wellness, herbal, beauty, lifestyle and at home tests.
Purchasers of our products in some of our smaller markets and purchasers of our products from our China subsidiary may purchase only for their own personal consumption and not for resale. The following table sets forth the number of active members by market as of the dates indicated.
Purchasers of our products in some of our smaller markets and purchasers of our products from our China subsidiary may purchase only for their own personal consumption and not for resale. 3 Table of Contents The following table sets forth the number of active members by market as of the dates indicated.
In any case, the business environment in China for health product companies can be challenging, which has from time to time been exacerbated by negative social media sentiment expressed for these types of companies. See “Item 1A. Risk Factors - Adverse publicity associated with our products, ingredients or network marketing program, or those of similar companies...”.
In any case, the business environment in China for health product companies can be challenging and can change quickly, which has from time to time been exacerbated by negative social media sentiment expressed for these types of companies. See “Item 1A. Risk Factors - Adverse publicity associated with our products, ingredients or network marketing program, or those of similar companies...”.
As is the case with most companies that operate in direct sales, we might receive inquiries or scrutiny from time to time from government regulatory authorities regarding the nature of our business and other issues, such as compliance with local direct selling, pyramid selling, transfer pricing, customs, taxation, foreign exchange control, securities and other laws. See “Item 1A.
As is the case with most companies that operate in direct sales, we might receive inquiries or scrutiny from time to time from government regulatory authorities regarding the nature of our business and other issues, such as compliance with local direct selling, pyramid selling, transfer pricing, customs, taxation, foreign exchange control, securities and other laws.
Under this system, members primarily refer our products to prospective consumers or they may buy at wholesale or discounted prices for personal consumption or for resale to consumers. The concept of network marketing is based on the strength of personal recommendations that frequently come from friends, neighbors, relatives, and close acquaintances.
Under this system, members primarily refer our products to prospective consumers or they may buy at wholesale or discounted prices for personal consumption or for resale to consumers. The concept of network marketing is based on the strength of personal recommendations that frequently come from contacts, social networks, friends, neighbors, relatives, and close acquaintances.
We are incorporated in Delaware. In February 2025, we relocated our corporate headquarters from Hong Kong to Rolling Hills Estates, California. Our common stock is currently traded on the NASDAQ Capital Market under the symbol “NHTC.” Available Information Our website is located at www.naturalhealthtrendscorp.com.
In February 2025, we relocated our corporate headquarters from Hong Kong to Rolling Hills Estates, California. Our common stock is currently traded on the NASDAQ Capital Market under the symbol “NHTC.” Available Information Our website is located at www.naturalhealthtrendscorp.com.
See “Working with Members . ” Members generally place orders through the internet and pay by credit card prior to shipment. Accordingly, we carry minimal accounts receivable and credit losses are historically negligible. 4 Table of Contents We offer both in-person and virtual or online marketing programs and activities.
See “Working with Members . ” Members generally place orders through the internet and pay by credit card prior to shipment. Accordingly, we carry minimal accounts receivable and credit losses are historically negligible. We offer both in-person and virtual or online marketing programs and activities.
Risk Factors - We rely on a limited number of independent third parties to manufacture and supply our products on a timely basis.” We have some contracts with our suppliers with automatic renewal rights. 3 Table of Contents Marketing and Distribution We distribute our products internationally primarily through a network marketing system, which is a form of person-to-person direct selling.
Risk Factors - We rely on a limited number of independent third parties to manufacture and supply our products on a timely basis.” We have some contracts with our suppliers with automatic renewal rights. Marketing and Distribution We distribute our products internationally predominantly through a network marketing system, which is a form of person-to-person direct selling.
They work effectively with our management, implementing our strategies and providing continuous feedback to improve our services. • A discipline and capability has been established to continue launching high-quality consumer products that are designed to facilitate the accomplishment of our corporate objectives. • We have developed and rolled out a comprehensive training system that provides a complete advancement path appropriate for our members.
They work effectively with our management, implementing our strategies and providing continuous feedback to improve our services. • We have developed a discipline and capability to continue launching consumer products that are designed to facilitate the accomplishment of our corporate objectives, which is to provide exceptionally high-quality, impactful products to our customers. • We have developed and rolled out a comprehensive training system that provides a complete advancement path appropriate for our members.
Item 1. BUSINESS Overview of Business Natural Health Trends Corp. is an international direct-selling and e-commerce company. Subsidiaries controlled by us sell personal care, wellness, and “quality of life” products under the “NHT Global” brand.
Item 1. BUSINESS Overview of Business Natural Health Trends Corp. is an international direct-selling and e-commerce company. Through our subsidiaries, we sell personal care, wellness, and “quality of life” products under the “NHT Global” brand.
We believe we have a competitive business model applicable to the markets in which we conduct business based on six key competencies: • Our field leaders are experienced and culturally coherent.
Our employees focus on assisting our members in attaining their goals. We believe we have a competitive business model applicable to the markets in which we conduct business based on six key competencies: • Our field leaders are experienced and culturally coherent.
December 31, 2024 2023 Americas 1 3,360 4,040 Hong Kong (including those members residing in China) 2 23,150 23,490 Taiwan 1,870 2,230 South Korea 70 80 Japan 440 520 Malaysia and Singapore 250 350 Russia and Kazakhstan 600 530 Europe 790 870 India 340 300 Total 30,870 32,410 1 United States, Canada, Mexico, Peru and Colombia 2 Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China.
December 31, 2025 2024 Americas 1 3,460 3,360 Hong Kong (including those members residing in China) 2 19,430 23,150 Taiwan 1,850 1,870 South Korea 60 70 Japan 340 440 Malaysia and Singapore 220 250 Russia and Kazakhstan 440 600 Europe 640 790 India 210 340 Total 26,650 30,870 1 United States, Canada, Mexico, Peru and Colombia 2 Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China.
Of the full-time employees, 84 were located in Greater China (Hong Kong, China, and Taiwan), 27 in the Americas (United States, Canada, Cayman Islands, and Peru), seven in India, four in Europe, three in Japan, and two in each of Malaysia, South Korea and Russia.
Employees At December 31, 2025, we employed 120 individuals, including 118 total full-time employees, worldwide. Of the full-time employees, 71 were located in Greater China (Hong Kong, China, and Taiwan), 28 in the Americas (United States, Canada, Cayman Islands, Peru and Colombia), seven in India, four in Europe, and two in each of Japan, Malaysia, South Korea and Russia.
Risk Factors - Legal, Regulatory, Tax, Currency and Trade Policy Risks.” Product Warranties and Returns Our refund policies and procedures closely follow industry and country-specific standards, which vary greatly by country.
We are also affected directly and indirectly by changes in United States and other jurisdictions’ trade policies. See “Item 1A. Risk Factors - Legal, Regulatory, Tax and Currency Risks.” Product Warranties and Returns Our refund policies and procedures closely follow industry and country-specific standards, which vary greatly by country.
Facial skin care and hand and body care Skindulgence™ 30 Minute Firming System, BioCell SC Mask, Skindulgence™ Essence Gel, Floraeda Toner and Primer, Botanical Hand Protector™, Airelle ® Age-Defying Facial Serum, Airelle ® Intense Hydrating Repair Complex, Airelle ® Age-Defying Eye & Lip Treatment, Color Awakening Lipstick™, Adamas™ Brightening Night Cream, Micellion Cleansing Water, Skindulgence™ Probiotic Ampoule, Skindulgence™ Daily Gentle Facial Cleanser, Skindulgence ® Revitalizing Serum, Skindulgence ® Revitalizing Eye Cream, Root Revive Hair Serum Lifestyle Products uniquely formulated to improve overall quality of life and to support active, physical and healthy lifestyles including weight management, and energy enhancing supplements.
Facial skin care and hand and body care Skindulgence™ Essence Gel, Floraeda Toner and Primer, Botanical Hand Protector™, Micellion Cleansing Water, Skindulgence ® Revitalizing Serum, Skindulgence ® Revitalizing Eye Cream, Root Revive Hair Serum, Soo:vea Moisturizing Cleanser, Soo:vea Moisturizing Toner, Soo:vea Moisturizing Booster, Soo:vea Moisturizing Cream, Beliné Triple Action Day Cream Lifestyle Products uniquely formulated to improve overall quality of life and to support active, physical and healthy lifestyles including weight management, and energy enhancing supplements.
We have automated a substantial amount of our financial reporting processes through implementation of Oracle’s E-Business Suite, and have integrated other critical business processes such as inventory management, purchasing and costing in our most significant markets. Employees At December 31, 2024, we employed 133 individuals, including 131 total full-time employees, worldwide.
Management Information Systems Our business uses a proprietary web-based system to process orders and to communicate bonus volume activity and commissions to members. We have automated a substantial amount of our financial reporting processes through implementation of Oracle’s E-Business Suite, and have integrated other critical business processes such as inventory management, purchasing and costing in our most significant markets.
Operations of the Business Operating Strategy Our objective is to help our members succeed in achieving their life objectives; be it personal health, beauty, happiness or financial rewards. Our employees focus on assisting our members in attaining their goals.
In addition, raw material Certificates of Analyses are reviewed to ensure that appropriate testing has been performed and are within required ingredient specifications. 2 Table of Contents Operations of the Business Operating Strategy Our objective is to help our members succeed in achieving their life objectives; be it personal health, beauty, happiness or financial rewards.
In some circumstances, the regulations in foreign markets may require us to obtain regulatory approval prior to introduction of a new product or limit our uses of certain ingredients altogether. There has been an increased movement in the United States and other markets to expand the regulation of dietary supplements. This could impose additional restrictions or requirements in the future.
In some circumstances, the regulations in foreign markets may require us to obtain regulatory approval prior to introduction of a new product or limit our uses of certain ingredients altogether. While the regulatory framework for dietary supplements in the United States remains largely unchanged, the industry is subject to ongoing policy discussions regarding oversight, enforcement priorities, and consumer protection.
Our product development is an ongoing process that is fueled by marketplace trends, new technologies and scientific findings, members’ input, research and vendor proposals. 2 Table of Contents Working closely with raw material manufacturers and contract manufacturers, our mission is to co-develop and bring to market the highest quality products.
At-home testing kit BioEssence Wellness Panel We continuously source unique, proprietary and immediate impact products to offer to our members and customers. Our product development is an ongoing process that is fueled by marketplace trends, new technologies and scientific findings, members’ input, research and vendor proposals.
Members typically share their experiences in using our products and developing their business at these events. We are continually developing and updating our marketing strategies and programs to motivate our members. Management Information Systems Our business uses a proprietary web-based system to process orders and to communicate bonus volume activity and commissions to members.
Members typically share their experiences in using our products and developing their business at these events.
Removed
Supplements and topical gels for improved vitality Alura Lux™ by NHT Global, Valura Lux ™ , LaVie+ ™ , TwinSlim™ Probiotics, NaturalGlo ™ Home Products designed to create a clean and natural living environment for the home. Home appliances AquaPur Desktop Water Purifier Daily Daily care products designed to cleanse and protect the body and promote personal hygiene.
Added
Supplements and topical gels for improved vitality Alura Lux™ by NHT Global, Valura Lux ™ , LaVie+ ™ , TwinSlim™ Probiotics, NaturalGlo ™, TwinSlim™ Coffee, TwinSlim™ Tomato Soup At Home Tests Measures 17+ critical biomarkers across multiple key areas of your well-being – including your cardiovascular, hormonal, inflammatory, metabolic, and nutritional health.
Removed
Oral care, hair care, and body care Smart Sonic Toothbrush At Home Tests Measures 17+ critical biomarkers across multiple key areas of your well-being – including your cardiovascular, hormonal, inflammatory, metabolic, and nutritional health. At-home testing kit BioEssence Wellness Panel We continuously source unique, proprietary and immediate impact products to offer to our members and customers.
Added
All current and new products introduced into the market are tested to ensure country and state regulatory compliance requirements are met where the products are sold. This includes proper handling, shipping, and shelf-life recommendations for our products.
Removed
This includes proper handling, shipping, and shelf-life recommendations for our products. In addition, raw material Certificates of Analyses are reviewed to ensure that appropriate testing has been performed and are within required ingredient specifications.
Added
We are continually developing and updating our marketing strategies and programs to motivate our members. 4 Table of Contents Recent Developments In 2025, in response to a challenging macroeconomic environment and continued pressure on consumer sentiment in the Company’s largest market, we implemented a restructuring plan intended to better align our operating cost structure with current business conditions and improve operating efficiency.
Removed
Because of this increased regulatory focus, our internal regulatory staff has grown and review efforts have been enhanced in order to comply with our understanding of current regulations. FDA regulations require current good manufacturing practices (cGMP) for dietary supplements.
Added
The plan included actions to optimize our workforce, relocate certain product manufacturing activities to Asia, and downsize several offices.
Added
As of December 31, 2025, we were substantially complete with the major restructuring initiatives and expect to realize a significant portion of the associated $1.5 million annualized cost savings during 2026, with the remainder expected to be realized thereafter, primarily due to the timing of certain facility-related actions. The amount and timing of savings may differ from our current expectations.
Added
Future regulatory interpretations or enforcement approaches could affect how dietary supplements are marketed or distributed. This could impose additional restrictions or requirements in the future. This could impose additional restrictions or requirements in the future. FDA regulations require current good manufacturing practices (cGMP) for dietary supplements.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+14 added−10 removed189 unchanged
Biggest changeWe distribute our products through independent members, and we depend upon them directly for all of our sales in most of our markets. Accordingly, our success depends in significant part upon our ability to attract, retain and motivate a large base of members, as well as a relatively small number of key members.
Biggest changeOur continuing loss of a significant number of members is adversely affecting our business, and if we cannot stabilize or increase the number of members our business could be further negatively impacted. We distribute our products through independent members, and we depend upon them directly for all of our sales in most of our markets.
Although we have in recent years expanded our line of products, we derive at least 10% of our total revenue from each of our Premium Noni Juice and Triotein™ products, as well as our line of probiotic products comprised of Enhanced Essential Probiotics and Biotic Trio . Further, we currently source each of these products from a single supplier.
Although we have in recent years expanded our line of products, we derive at least 10% of our total revenue from each of our Premium Noni Juice and Triotein™ products, as well as our line of probiotic products comprised of Enhanced Essential Probiotics and Enhanced Biotic Trio . Further, we currently source each of these products from a single supplier.
While we seek to protect our information through contractual and other means, there can be no assurance that we will timely learn of such activity, have the resources to attempt to stop it, or have adequate remedies available to us. Failure of new products to gain member and market acceptance could harm our business.
While we seek to protect our information through contractual and other means, there can be no assurance that we will timely learn of such activity, have the resources to attempt to stop it, or have adequate remedies available to us. 14 Failure of new products to gain member and market acceptance could harm our business.
It may again in the future be necessary or advisable to suspend member activities or take similar actions, and the resulting periods of reduced activity may have a material adverse effect on our business. 17 Table of Contents Although we attempt to work closely with both national and local Chinese governmental agencies in conducting our business, our efforts to comply with national and local laws may be harmed by a rapidly evolving regulatory climate, concerns about activities resembling violations of direct selling, pyramid selling or multi-level marketing legislation, subjective interpretations of laws and regulations, and activities by individual members that may violate laws notwithstanding our policies prohibiting such activities.
It may again in the future be necessary or advisable to suspend member activities or take similar actions, and the resulting periods of reduced activity may have a material adverse effect on our business. 18 Table of Contents Although we attempt to work closely with both national and local Chinese governmental agencies in conducting our business, our efforts to comply with national and local laws may be harmed by a rapidly evolving regulatory climate, concerns about activities resembling violations of direct selling, pyramid selling or multi-level marketing legislation, subjective interpretations of laws and regulations, and activities by individual members that may violate laws notwithstanding our policies prohibiting such activities.
Changes in government trade and economic policies, including the imposition and threatened imposition of tariffs and other restrictive trade policies, and ongoing political and economic disputes between the United States and other jurisdictions, particularly China, may have a negative effect on global economic conditions and our business, financial results and financial condition.
Changes in government trade and economic policies, including the imposition of tariffs and other restrictive trade policies, and ongoing political and economic disputes between the United States and other jurisdictions, particularly China, may have a negative effect on global economic conditions and our business, financial results and financial condition.
These developments, together with the threat of new tariffs and other restrictive trade policies and the uncertainties they create, may have a material adverse effect on global economic conditions and the stability of global financial markets, and they may significantly reduce global trade and, in particular, adversely affect trade and economic relations between China and the United States.
These developments, together with the threat of additional tariffs and other restrictive trade policies and the uncertainties they create, may have a material adverse effect on global economic conditions and the stability of global financial markets, and they may significantly reduce global trade and, in particular, adversely affect trade and economic relations between China and the United States.
In addition, any actions by non-U.S. markets to implement further trade or economic policy changes, including limiting foreign investment or trade, imposing currency controls restricting the international transfer of funds, increasing regulatory scrutiny or taking other actions which impact U.S. companies' ability to obtain necessary licenses or approvals could negatively impact our business. 18 Table of Contents Trade and economic policy changes are subject to a number of uncertainties and are only one part of the larger dynamic of political and economic relations amongst countries.
In addition, any actions by non-U.S. markets to implement further trade or economic policy changes, including limiting foreign investment or trade, imposing currency controls restricting the international transfer of funds, increasing regulatory scrutiny or taking other actions which impact U.S. companies' ability to obtain necessary licenses or approvals could negatively impact our business. 13 Trade and economic policy changes are subject to a number of uncertainties and are only one part of the larger dynamic of political and economic relations amongst countries.
Even if our practices or those of our third-party vendors are not subject to legal challenge, the perception of data or privacy concerns, whether or not valid, may harm our reputation and brand and adversely affect our business, results of operations and financial condition. 19 Table of Contents Challenges by third parties to the legality of our business operations could harm our business.
Even if our practices or those of our third-party vendors are not subject to legal challenge, the perception of data or privacy concerns, whether or not valid, may harm our reputation and brand and adversely affect our business, results of operations and financial condition. Challenges by third parties to the legality of our business operations could harm our business.
Foreign Corrupt Practices Act (“FCPA”), which generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business as well as requiring companies and their intermediaries to maintain accurate books and records. In recent years there has been a substantial increase in anti-bribery law enforcement activity by the U.S.
Foreign Corrupt Practices Act (“FCPA”), which generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business as well as requiring companies and their intermediaries to maintain accurate books and records. In the past decade there has been a substantial increase in anti-bribery law enforcement activity by the U.S.
Our foreign currency exchange rate exposure to the South Korean won, Taiwan dollar, Japanese yen, Chinese yuan, Russian ruble, Kazakhstani tenge, Singaporean dollar, Malaysian ringgit, Indian rupee, Canadian dollar, Mexican peso, Peruvian sol, European euro and Colombian peso collectively represented approximately 16% and 18% of our revenue in 2024 and 2023, respectively.
Our foreign currency exchange rate exposure to the South Korean won, Taiwan dollar, Japanese yen, Chinese yuan, Russian ruble, Kazakhstani tenge, Singaporean dollar, Malaysian ringgit, Indian rupee, Canadian dollar, Mexican peso, Peruvian sol, European euro and Colombian peso collectively represented approximately 15% and 16% of our revenue in 2025 and 2024, respectively.
The number and productivity of our members could be harmed by several factors, including: • adverse publicity or negative perceptions regarding us, our products, our method of distribution or our competitors; • lack of interest in, or the technical failure of, existing or new products; • lack of interest in our existing compensation plan for members or in enhancements or other changes to that compensation plan; • our actions to enforce our policies and procedures; • regulatory actions or charges or private actions against us or others in our industry; • general economic, business and political conditions, including the potential governmental imposition of restrictive measures that may curtail person-to-person interactions, as recently experienced resulting from the COVID-19 pandemic, and political unrest in Hong Kong; • increased use of social sharing channels, which may allow members to more easily engage with their customers and other members in other opportunities; • changes in management or the loss of one or more key member leaders; • entry of new competitors, or new products or compensation plan enhancements by existing competitors, in our markets; and • potential saturation or maturity levels in a given country or market which could negatively impact our ability to attract and retain members in such market.
The number and productivity of our members could be harmed by several factors, including: • adverse publicity or negative perceptions regarding us, our products, our method of distribution or our competitors; • lack of interest in, or the technical failure of, existing or new products; • lack of interest in our existing compensation plan for members or in enhancements or other changes to that compensation plan; • our actions to enforce our policies and procedures; • regulatory actions or charges or private actions against us or others in our industry; • general economic, business and political conditions, including the potential governmental imposition of restrictive measures that may curtail person-to-person interactions, as recently experienced resulting from the COVID-19 pandemic, and political unrest in Hong Kong; • increased use of social sharing channels, which may allow members to more easily engage with their customers and other members in other opportunities; • changes in management or the loss of one or more key member leaders; • entry of new competitors, or new products or compensation plan enhancements by existing competitors, in our markets; and • potential saturation or maturity levels in a given country or market which could negatively impact our ability to attract and retain members in such market. 16 Although virtually all of our members are independent contractors, improper member actions that violate laws or regulations could harm our business.
Tensions between the United States and China have increased in recent years as a result of disputes in areas including trade policy, intellectual property, cybersecurity and data privacy.
Apart from trade policy, tensions between the United States and China have increased in recent years as a result of disputes in other areas including intellectual property, cybersecurity and data privacy.
Further, to date we have not attempted to reduce our exposure to short-term exchange rate fluctuations by using foreign currency exchange contracts. 20 Table of Contents Changes in tax or duty laws, and unanticipated tax or duty liabilities, could adversely affect our net income.
Further, to date we have not attempted to reduce our exposure to short-term exchange rate fluctuations by using foreign currency exchange contracts. Changes in tax or duty laws, and unanticipated tax or duty liabilities, could adversely affect our net income.
Currency exchange rate fluctuations could lower our revenue and net income. In 2024, 96% of our revenue was recorded by subsidiaries located outside of North America. Revenue transactions and related commission payments, as well as other incurred expenses, are typically denominated in the local currency. Accordingly, our international subsidiaries generally use the local currency as their functional currency.
Currency exchange rate fluctuations could lower our revenue and profitability. In 2025, 96% of our revenue was recorded by subsidiaries located outside of North America. Revenue transactions and related commission payments, as well as other incurred expenses, are typically denominated in the local currency. Accordingly, our international subsidiaries generally use the local currency as their functional currency.
We incur significant expense in the payment of compensation to our members, which represented approximately 41% and 42% of net sales during each of 2024 and 2023, respectively. We compensate our members by paying commissions, bonuses, and certain awards and prizes.
We incur significant expense in the payment of compensation to our members, which represented approximately 41% of net sales during each of 2025 and 2024. We compensate our members by paying commissions, bonuses, and certain awards and prizes.
In 2024 and 2023, approximately 82% and 79% of our revenue was generated in Hong Kong, respectively, and substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China.
In 2025 and 2024, approximately 82% of our revenue was generated in Hong Kong. Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China.
We experienced negative operating cash flows during the years ended December 31, 2024, 2023 and 2022, and only modest positive operating cash flows during the years ended December 31, 2021 and 2020. This cash flow performance was primarily due to declines in our revenues being greater than the decreases in expenditures that we could manage.
We experienced negative operating cash flows during each of the four years ended December 31, 2022 through 2025, and only modest positive operating cash flows during the years ended December 31, 2021 and 2020. This cash flow performance was primarily due to declines in our revenues being greater than the decreases in expenditures that we could manage.
We experienced negative operating cash flows during the years ended December 31, 2024, 2023 and 2022, and only modest positive operating cash flows during the years ended December 31, 2021 and 2020. Unless our operating cash flows improve, this negative financial performance could have a material adverse effect on our business and our stock price.
We experienced negative operating cash flows during each of the four years ended December 31, 2022 through 2025, and only modest positive operating cash flows during the years ended December 31, 2021 and 2020. Unless our operating cash flows improve, this negative financial performance could have a material adverse effect on our business and our stock price.
The PIPL also provides that critical information infrastructure operators and personal information processing entities that process personal information meeting a volume threshold are also required to store in China personal information generated or collected in China, and to pass a security assessment for any export of such personal information.
The PIPL also provides that critical information infrastructure operators and personal information processing entities that process personal information meeting a volume threshold are also required to store in China personal information generated or collected in China, and to pass a security assessment or meet other regulatory requirements (such as standard contacts or certification mechanisms) for any export of such personal information.
We are required by federal securities laws to document and test our internal control procedures in order to satisfy the requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), which requires annual management assessments of the effectiveness of internal control over financial reporting. Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud.
We are required by federal securities laws to document and test our internal control procedures in order to satisfy the requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), which requires annual management assessments of, and reports on, the effectiveness of internal control over financial reporting.
The ultimate reaction of other countries, and the individuals in each of these countries, and the impact of actions on the United States, China, Hong Kong, the global economy and our business, financial condition and results of operations, cannot be predicted at this time.
The ultimate reaction of other countries, and the individuals in each of these countries, and the impact of actions on the United States, China, Hong Kong, the global economy and our business, financial condition and results of operations, cannot be predicted at this time. We are subject to risks relating to product concentration and lack of revenue diversification.
In addition, our members’ and consumers’ perception of the safety and quality of our products and ingredients, as well as similar products and ingredients distributed by other companies, can be significantly influenced by media attention, publicized scientific research or findings, widespread product liability claims and other publicity concerning our products or ingredients or similar products and ingredients distributed by other companies.
There have been several instances where adverse publicity in China has harmed our business. 12 Table of Contents In addition, our members’ and consumers’ perception of the safety and quality of our products and ingredients, as well as similar products and ingredients distributed by other companies, can be significantly influenced by media attention, publicized scientific research or findings, widespread product liability claims and other publicity concerning our products or ingredients or similar products and ingredients distributed by other companies.
The loss of one or more of our executive officers, members of our senior management or directors could have a material adverse effect on our business, results of operations and financial condition.
We also depend on the ability of our executive officers and other members of senior management to work effectively as a team. The loss of one or more of our executive officers, members of our senior management or directors could have a material adverse effect on our business, results of operations and financial condition.
Factors that could affect our ability to continue to introduce new products include, among others, limited capital and human resources, government regulations, proprietary protections of competitors that may limit our ability to offer comparable products and any failure to anticipate changes in consumer tastes and buying preferences. 13 Table of Contents We rely on a limited number of independent third parties to manufacture and supply our products on a timely basis.
Factors that could affect our ability to continue to introduce new products include, among others, limited capital and human resources, government regulations, proprietary protections of competitors that may limit our ability to offer comparable products and any failure to anticipate changes in consumer tastes and buying preferences.
Although virtually all of our members are independent contractors, improper member actions that violate laws or regulations could harm our business. Virtually all of our members are independent contractors and, accordingly, we are not in a position to directly provide the same direction, motivation and oversight as we would if these members were our own employees.
Virtually all of our members are independent contractors and, accordingly, we are not in a position to directly provide the same direction, motivation and oversight as we would if these members were our own employees.
Legal, Regulatory, Tax, Currency and Trade Policy Risks Our business in China is subject to compliance with a myriad of applicable laws and regulations, and any actual or alleged violations of those laws or government actions otherwise directed at us could have a material adverse impact on our business and the value of our company.
In addition, we are subject to the risk in some jurisdictions of being responsible for social security and similar taxes with respect to our members. 17 Legal, Regulatory, Tax and Currency Risks Our business in China is subject to compliance with a myriad of applicable laws and regulations, and any actual or alleged violations of those laws or government actions otherwise directed at us could have a material adverse impact on our business and the value of our company.
While we have implemented member policies and procedures designed to govern member conduct and to protect the goodwill associated with our trademarks and trade names, it can be difficult to enforce these policies and procedures because of the large number of members and their independent status. 15 Table of Contents Given the size and diversity of our member force, we experience problems with members from time to time, especially with respect to our members in foreign markets.
While we have implemented member policies and procedures designed to govern member conduct and to protect the goodwill associated with our trademarks and trade names, it can be difficult to enforce these policies and procedures because of the large number of members and their independent status.
However, we may be liable for actions of our employees and agents, even if such actions are inconsistent with our policies. Being subject to an investigation by the DOJ or the SEC for an alleged violation of the FCPA could cause us to incur significant expenses and distractions that could adversely affect our business.
Being subject to an investigation by the DOJ or the SEC for an alleged violation of the FCPA could cause us to incur significant expenses and distractions that could adversely affect our business.
These losses in the number of active members were a significant factor contributing to the decrease in our recent year-over-year sales. If we cannot stabilize or increase the number of our members, or if we lose one or more key member leaders, sales of our products could be further materially and adversely affected.
If we cannot stabilize or increase the number of our members, or if we lose one or more key member leaders, sales of our products could be further materially and adversely affected.
Any future failure to maintain effective internal control over financial reporting could result in the foregoing identified consequences and could cause investors to lose confidence in our reported financial information and in our company and could cause a decline in the market price of our common stock.
Any future failure to maintain effective internal control over financial reporting could result in the foregoing identified consequences and could cause investors to lose confidence in our reported financial information and in our company and could cause a decline in the market price of our common stock. 15 Management and Member Network Risks We could be adversely affected by management changes or an inability to attract and retain key management, directors and consultants.
Moreover, as our business evolves, we may require additional or different management members, directors or consultants, and there can be no assurance that we will be able to locate, attract and retain them if and when they are needed. 14 Table of Contents Our continuing loss of a significant number of members is adversely affecting our business, and if we cannot stabilize or increase the number of members our business could be further negatively impacted.
Moreover, as our business evolves, we may require additional or different management members, directors or consultants, and there can be no assurance that we will be able to locate, attract and retain them if and when they are needed.
The continuing effect of any or all of these events could adversely impact demand for our products, harm our business, results of operations and financial condition. 12 Table of Contents We are subject to risks relating to product concentration and lack of revenue diversification.
The continuing effect of any or all of these events could adversely impact demand for our products, harm our business, results of operations and financial condition.
Finally, we also experience indirect exchange rate exposure due to the concentration of our sales to members residing in China and the impact of fluctuations in the value of the Chinese yuan on our members’ purchasing power.
Finally, we also experience indirect exchange rate exposure due to the concentration of our sales to members residing in China and the impact of fluctuations in the value of the Chinese yuan on our members’ purchasing power. 20 Given our inability to predict the degree of exchange rate fluctuations, we cannot estimate the effect these fluctuations may have upon future reported results, product pricing or our overall financial condition.
All of our products are manufactured by a limited number of independent third parties. There is no assurance that our current manufacturers will continue to reliably supply products to us at the level of quality we require or to do so on a timely basis.
There is no assurance that our current manufacturers will continue to reliably supply products to us at the level of quality we require or to do so on a timely basis. Some of our third-party manufacturers experience difficulty sourcing product ingredients or components on a timely basis, which can result in delays in the timely delivery of products to us.
We expect to reapply for a direct selling license in China when we believe that circumstances are again ripe for doing so.
We previously submitted a preliminary application for a direct selling license in China, but withdrew our application in 2019 upon the recommendation of a Chinese governmental authority. We expect to reapply for a direct selling license in China when we believe that circumstances are again ripe for doing so.
In addition, through a Chinese entity, we sell products in China using an e-commerce retail platform.
In addition, through a Chinese entity, we sell products in China using an e-commerce retail platform. Chinese members may elect to participate in either or both of the Chinese entity and the Hong Kong entity.
Our members may terminate their services with us at any time and, like most direct selling organizations, we have a high rate of attrition.
Accordingly, our success depends in significant part upon our ability to attract, retain and motivate a large base of members, as well as a relatively small number of key members. Our members may terminate their services with us at any time and, like most direct selling organizations, we have a high rate of attrition.
In addition, on June 10, 2021, the Standing Committee of the National People's Congress of China promulgated the Data Security Law, which took effect in September 2021.
Amendments to the Cyber Security Law that took effect on January 1, 2026 increase penalties and enforcement measures for certain violations and may heighten our potential exposure and compliance costs. In addition, on June 10, 2021, the Standing Committee of the National People's Congress of China promulgated the Data Security Law, which took effect in September 2021.
We had 5% fewer active members at December 31, 2024 as compared to the end of 2023, and 16% fewer active members at the end of each of 2023 and 2022 as compared to the end of the previous year.
We had 14% fewer active members at December 31, 2025 as compared to the end of 2024, and 5% fewer active members at the end of 2024 as compared to the end of 2023. These losses in the number of active members were a significant factor contributing to the decrease in our recent year-over-year sales.
For example, if our members engage in illegal activities in China, those actions could be attributed to us.
Given the size and diversity of our member force, we experience problems with members from time to time, especially with respect to our members in foreign markets. For example, if our members engage in illegal activities in China, those actions could be attributed to us.
Management and Member Network Risks We could be adversely affected by management changes or an inability to attract and retain key management, directors and consultants. We incur a low level of overhead and are run by a small number of executives, who rely on a small group of employees.
We incur a low level of overhead and are run by a small number of executives, who rely on a small group of employees. Our future success depends to a significant degree on the skills, experience and efforts of our top management and directors.
There has been an increasing movement in the United States and other markets to increase the regulation of dietary supplements, which could impose additional restrictions or requirements in the future. In the United States, for example, some legislators and industry critics continue to push for increased regulatory authority by the FDA over nutritional supplements.
There has been a movement in recent years in some markets to increase the regulation of dietary supplements or to revisit the interpretation of existing regulations, either of which could impose additional restrictions or requirements in the future.
Some of our third-party manufacturers experience difficulty sourcing product ingredients or components on a timely basis, which can result in delays in the timely delivery of products to us. If a key manufacturer suffers liquidity problems or experiences operational or other problems assisting with our products, our results could suffer.
If a key manufacturer suffers liquidity problems or experiences operational or other problems assisting with our products, our results could suffer.
In response, a number of our markets, particularly China, have implemented tariffs on U.S. imports or otherwise imposed non-tariff barriers such as slow-walking custom clearance of American-made products. U.S. trade policies can change quickly, and the extent and duration of tariffs and other trade barriers are difficult to predict.
U.S. trade policies can change quickly, and the extent and duration of tariffs and other trade barriers are difficult to predict.
Department of Justice (the “DOJ”) and the SEC relating to certain countries in which we have business, including China. For example, in 2017, a U.S. based direct selling company announced that it was the target of an investigation being conducted by the SEC to determine whether certain activities related to the direct selling company's operations in China violated the FCPA.
Department of Justice (the “DOJ”) and the SEC relating to certain countries in which we have business, including China.
Also, in 2017, another U.S. based direct selling company announced that it had initiated a voluntary probe of its operations in China to determine if violations of the FCPA had occurred. Our policies mandate compliance with anti-bribery laws by our employees and agents, including the requirements to maintain accurate information and internal controls.
Our policies mandate compliance with anti-bribery laws by our employees and agents, including the requirements to maintain accurate information and internal controls. However, we may be liable for actions of our employees and agents, even if such actions are inconsistent with our policies.
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There have been several instances where adverse publicity in China has harmed our business.
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Since President Trump's re-election in 2024, tariffs on imports to the United States have become an increasingly significant component of U.S. trade policy.
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The SEC’s Sarbanes-Oxley rules require us to include a report by management on the effectiveness of our internal control over financial reporting in our Annual Reports on Form 10-K.
Added
Beginning in the first quarter of 2025, the U.S. has announced and/or implemented significant new tariffs on imports from a wide range of countries, particularly China, which has prompted retaliatory tariffs by a number of countries and a cycle of further tariffs by both the U.S. and other countries.
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For instance, as described in “Item 9A. - Controls and Procedures” in our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2018, we identified a material weakness in our internal control over financial reporting as of December 31, 2018.
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On April 2, 2025, the U.S. imposed by executive order a 34% reciprocal tariff on Chinese-origin goods. This was followed by an amended executive order April 8, 2025, raising tariffs to 84% and an April 9, 2025 executive order raising tariffs to 125%. In response, China raised its duties on imported U.S. goods to a similar level.
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Management, with oversight from the Audit Committee, implemented a plan to remediate this material weakness and completed remediation during 2019. While the existence of this material weakness did not result in a restatement of previously issued interim or annual consolidated financial statements, we incurred substantial costs and utilized meaningful resources to remediate the material weakness during 2019.
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Following negotiations, the U.S. announced a temporary 90-day reduction in its reciprocal tariff rates from 125% to 10% beginning in May 2025, and China agreed to suspend its retaliatory tariffs during the same period. The pre-existing 20% U.S. tariff imposed on all Chinese goods remained in place, along with certain other sector-specific tariffs.
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Our future success depends to a significant degree on the skills, experience and efforts of our top management and directors. We also depend on the ability of our executive officers and other members of senior management to work effectively as a team.
Added
In October 2025, the U.S. administration announced an additional 100% tariff on all products imported from China in response to certain restrictions imposed by China on rare earth minerals, before announcing an agreement that would, among other things, reduce the general tariff rate on Chinese goods to 47%.
Removed
In addition, we are subject to the risk in some jurisdictions of being responsible for social security and similar taxes with respect to our members.
Added
Specifically, we may incur additional costs in the future in connection with shipments of products into China, particularly from the U.S. We may not be able to recover these additional costs through a surcharge.
Removed
Chinese members may elect to participate in either or both of the Chinese entity and the Hong Kong entity. 16 Table of Contents We previously submitted a preliminary application for a direct selling license in China, but in 2019 a Chinese governmental authority recommended that we withdraw our application.
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To the extent we are able to contract for products that are currently made in the U.S. to be manufactured elsewhere in order to mitigate the effect of these tariffs, we may incur additional transition costs including the cost of product reregistration. Assuming substantial tariffs remain in place, their effect on our future operating results remains uncertain.
Removed
The United States has in recent years enacted tariffs on certain items. Further, with President Trump's re-election in 2024, significant increases in tariffs on foreign imports into the United States have been proposed or, the case of imports from China imposed.
Added
Apart from the direct cost of tariffs, the ongoing trade dispute may also have an impact on Chinese discretionary spending and consumer sentiment toward products made or perceived to be made in the U.S., which has had and may continue to have an impact on demand for our products.
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Hong Kong also has its data privacy legislation that regulates the collection, use and handling of personal data.
Added
We rely on a limited number of independent third parties to manufacture and supply our products on a timely basis. All of our products are manufactured by a limited number of independent third parties.
Removed
Given our inability to predict the degree of exchange rate fluctuations, we cannot estimate the effect these fluctuations may have upon future reported results, product pricing or our overall financial condition.
Added
Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud.
Added
For instance, we incurred substantial costs in 2019 to remediate an identified material weakness in our internal control over financial reporting.
Added
In addition, China has recently adopted implementing regulations and measures, including regulations on network data security management and cross-border data transfers, as well as sector-specific and regional rules and catalogues relating to “important data,” which further refine and in some cases expand data security, classification and cross-border transfer requirements and increase the complexity of the regulatory regime. 19 Hong Kong also has its data privacy legislation that regulates the collection, use and handling of personal data.
Added
While the regulatory framework for dietary supplements in the United States remains largely unchanged, the industry is subject to ongoing policy discussions regarding oversight, enforcement priorities, and consumer protection. Future regulatory interpretations or enforcement approaches could affect how dietary supplements are marketed or distributed.
Added
For example, in August 2020, a U.S.-based direct selling company entered into a deferred prosecution agreement in connection with criminal charges brought by the DOJ relating to alleged payments and benefits paid to Chinese officials, and settled related SEC charges at the same time, incurring over $120 million in fines and disgorgement of profits.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES Our corporate headquarters is located in Rolling Hills Estates, California where we lease 4,900 square feet of office space with a term expiring in September 2030. We also lease 7,300 square feet of corporate office space in Hong Kong with a term expiring in June 2026.
Biggest changeItem 2. PROPERTIES Our corporate headquarters is located in Rolling Hills Estates, California where we lease 4,900 square feet of office space with a term expiring in September 2030. In January 2026, the Company executed an agreement to sublease a portion of this space for the duration of the lease term, effective February 1, 2026.
We lease seven branch offices throughout China that are used for our China business segment, and additional office space in Peru, Japan, Taiwan, South Korea, Malaysia and the Cayman Islands (all of which are used for our Primary Reporting Segment). We contract with third parties for fulfillment and distribution operations in all of our international markets.
We lease seven branch offices throughout China that are used for our China business segment, and additional office space in Peru, Japan, Taiwan, South Korea, Malaysia, India, Colombia and the Cayman Islands (all of which are used for our Primary Reporting Segment). We contract with third parties for fulfillment and distribution operations in all of our international markets.
To help further develop the market for our products in North America, we lease retail space in Rowland Heights, California; Richmond, British Columbia; and Metuchen, New Jersey.
We also lease 7,300 square feet of corporate office space in Hong Kong with a term expiring in June 2026. To help further develop the market for our products in North America, we lease retail space in Richmond, British Columbia and Metuchen, New Jersey.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAt February 18, 2025, there were approximately 105 record holders of our common stock (although we believe that the number of beneficial owners of our common stock is substantially greater). The Company expects to pay a quarterly cash dividend of $0.20 on each share of common stock outstanding for the foreseeable future.
Biggest changeAt February 17, 2026, there were approximately 90 record holders of our common stock (although we believe that the number of beneficial owners of our common stock is substantially greater). The Company expects to pay a quarterly cash dividend of $0.10 on each share of common stock outstanding for the foreseeable future.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently traded on the NASDAQ Capital Market (“Nasdaq”) under the symbol “NHTC.” On February 18, 2025, the closing price of our common stock as reported by Nasdaq was $4.86 per share.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently traded on the NASDAQ Capital Market (“Nasdaq”) under the symbol “NHTC.” On February 17, 2026, the closing price of our common stock as reported by Nasdaq was $3.33 per share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

35 edited+20 added−10 removed38 unchanged
Biggest changeResults of Operations The following table sets forth our operating results as a percentage of net sales for the periods indicated: Year Ended December 31, 2024 2023 Net sales 100.0 % 100.0 % Cost of sales 26.0 25.4 Gross profit 74.0 74.6 Operating expenses: Commissions expense 40.9 41.9 Selling, general and administrative expenses 36.1 36.5 Total operating expenses 77.0 78.4 Loss from operations (3.0 ) (3.8 ) Other income, net 4.4 5.5 Income before income taxes 1.4 1.7 Income tax provision 0.1 0.4 Net income 1.3 % 1.3 % 31 Table of Contents Net Sales The following table sets forth revenue by market for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Americas 1 $ 2,680 6.2 % $ 3,364 7.7 % Hong Kong 2 35,106 81.7 34,898 79.4 China 1,580 3.7 1,235 2.8 Taiwan 1,591 3.7 2,181 5.0 South Korea 154 0.4 164 0.4 Japan 292 0.7 450 1.0 Malaysia and Singapore 241 0.6 275 0.6 Russia and Kazakhstan 490 1.1 480 1.1 Europe 635 1.5 733 1.7 India 194 0.4 144 0.3 Total $ 42,963 100.0 % $ 43,924 100.0 % 1 United States, Canada, Mexico, Peru and Colombia. 2 Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China.
Biggest changeResults of Operations The following table sets forth our operating results as a percentage of net sales for the periods indicated: Year Ended December 31, 2025 2024 Net sales 100.0 % 100.0 % Cost of sales 26.4 26.0 Gross profit 73.6 74.0 Operating expenses: Commissions expense 41.0 40.9 Selling, general and administrative expenses 37.1 36.1 Total operating expenses 78.1 77.0 Loss from operations (4.5 ) (3.0 ) Other income, net 3.1 4.4 Income (loss) before income taxes (1.4 ) 1.4 Income tax provision 0.8 0.1 Net income (loss) (2.2 )% 1.3 % 31 Table of Contents Net Sales The following table sets forth revenue by market for the periods indicated (in thousands): Year Ended December 31, 2025 2024 Americas 1 $ 2,833 7.1 % $ 2,680 6.2 % Hong Kong 2 32,671 82.1 35,106 81.7 China 946 2.4 1,580 3.7 Taiwan 1,542 3.9 1,591 3.7 South Korea 102 0.3 154 0.4 Japan 333 0.8 292 0.7 Malaysia and Singapore 263 0.7 241 0.6 Russia and Kazakhstan 444 1.1 490 1.1 Europe 530 1.3 635 1.5 India 112 0.3 194 0.4 Total $ 39,776 100.0 % $ 42,963 100.0 % 1 United States, Canada, Mexico, Peru and Colombia. 2 Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview We are an international direct-selling and e-commerce company. Subsidiaries controlled by us sell personal care, wellness, and “quality of life” products under the “NHT Global” brand.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview General We are an international direct-selling and e-commerce company. Subsidiaries controlled by us sell personal care, wellness, and “quality of life” products under the “NHT Global” brand.
However, any future cash dividends will be at the sole discretion of the Board of Directors, and will depend on our financial condition, results of operations, capital requirements and other factors considered relevant by the Board of Directors.
Any future cash dividends will be at the sole discretion of the Board of Directors, and will depend on our financial condition, results of operations, capital requirements and other factors considered relevant by the Board of Directors.
China has been and continues to be our most important business development project. We operate an e-commerce direct selling platform in Hong Kong that in 2024 generated approximately 82% of our revenue, substantially all of which was derived from the sale of products that are delivered to members in China.
China has been and continues to be our most important business development project. We operate an e-commerce direct selling platform in Hong Kong that in 2025 generated approximately 82% of our revenue, substantially all of which was derived from the sale of products that are delivered to members in China.
As of December 31, 2024, $21.9 million of the $70.0 million stock repurchase program remained available for future purchases, inclusive of related estimated income tax. No repurchases were made under the stock repurchase program in 2024 or 2023.
As of December 31, 2025, $21.9 million of the $70.0 million stock repurchase program remained available for future purchases, inclusive of related estimated income tax. No repurchases were made under the stock repurchase program in 2025 or 2024.
Because of the size of our foreign operations, operating results can be impacted negatively or positively by factors such as foreign currency fluctuations, inflation rates, and economic, political and business conditions around the world.
Because of the size of our foreign operations, operating results can be impacted negatively or positively by factors such as foreign currency fluctuations, trade policy, inflation rates, and economic, political and business conditions around the world.
Risk Factors,” and more specifically under the captions “Risk Factors - Because our Hong Kong operations account for a substantial portion of our overall business...”, “Risk Factors - Hong Kong's political and economic landscape has in recent years undergone significant change...”, and “Risk Factors - Our business in China is subject to compliance with a myriad of applicable laws and regulations...”.
Risk Factors,” and more specif ically under the captions “Risk Factors - Because our Hong Kong operations account for a substantial portion of our overall business...”, “Risk Factors - Hong Kong's political and economic landscape has in recent years undergone significant change...”, and “Risk Factors - Our business in China is subject to compliance with a myriad of applicable laws and regulations...”.
In any case, the business environment in China for health product companies can be challenging, which has from time to time been exacerbated by negative social media sentiment expressed for these types of companies.
In any case, the business environment in China for health product companies can be challenging and can change quickly, which has from time to time been exacerbated by negative social media sentiment expressed for these types of companies.
As of December 31, 2024, deferred revenue was $6.4 million, which primarily consisted of $4.9 million pertaining to unshipped product orders and unredeemed product vouchers, as well as $1.5 million in auto ship advances.
As of December 31, 2025, deferred revenue was $5.6 million, which primarily consisted of $4.1 million pertaining to unshipped product orders and unredeemed product vouchers, as well as $1.5 million in auto ship advances.
These purchases of marketable securities were offset by $40.4 million of proceeds received from maturities of marketable securities. 33 Table of Contents Cash used in financing activities during 2024 and 2023 consisted solely of quarterly dividend payments of $0.20 per common share, totaling $9.2 million in each period.
These purchases of marketable securities were offset by $59.0 million of proceeds received from maturities of marketable securities. 33 Table of Contents Cash used in financing activities during 2025 and 2024 consisted solely of quarterly dividend payments of $0.20 per common share, totaling $9.2 million in each period.
Members can also earn additional income, trips and other prizes in specific time-limited promotions and contests we hold from time to time. Member commissions are dependent on the sales mix and, for fiscal 2024 and 2023, represented 41% and 42% of net sales, respectively.
Members can also earn additional income, trips and other prizes in specific time-limited promotions and contests we hold from time to time. Member commissions are dependent on the sales mix and, for each of fiscal 2025 and 2024, represented 41% net sales.
Other Income, Net Other income decreased to $1.9 million for the year ended December 31, 2024, as compared to $2.4 million in the prior year. The decrease in other income was primarily due to less interest earned during 2024 as compared to the prior year.
Other Income, Net Other income decreased to $1.2 million for the year ended December 31, 2025 as compared with $1.9 million in the prior year. The decrease in other income was primarily due to less interest income earned during 2025.
As of December 31, 2024, we were conducting business through 30,870 active members, compared to 32,410 at the end of 2023. We consider a member “active” if they have placed at least one product order with us during the preceding year.
As of December 31, 2025, we were conducting business through 26,650 active members, compared to 30,870 at the end of 2024. We consider a member “active” if they have placed at least one product order with us during the preceding year.
We consider all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. As of December 31, 2024, we had $36.0 million in available-for-sale investments classified as either cash equivalents or marketable securities. In addition, cash and cash equivalents included $3.6 million held in banks located in China subject to foreign currency controls.
We consider all highly liquid investments with original maturities of three months or less, when purchased, to be cash equivalents. As of December 31, 2025, we had $23.0 million in available-for-sale investments classified as either cash equivalents or marketable securities. In addition, cash and cash equivalents included $2.9 million held in banks located in China subject to foreign currency controls.
Total cash, cash equivalents and marketable securities decreased by $12.2 million from December 31, 2023 to December 31, 2024 due to the dividends paid during 2024 and the payment of the repatriation tax on the deemed repatriation of deferred foreign income as required by the U.S. Tax Cuts and Jobs Act.
Total cash, cash equivalents and marketable securities decreased by $15.1 million from December 31, 2024 to December 31, 2025 due to the dividends paid during 2025 and the final payment of the repatriation tax on the deemed repatriation of deferred foreign income as required by the U.S. Tax Cuts and Jobs Act.
Income Taxes An income tax provision of $48,000 was recognized for the year ended December 31, 2024 compared with $177,000 for the year ended December 31, 2023 .
Income Taxes An income tax provision of $315,000 was recognized for the year ended December 31, 2025 compared with $48,000 for the year ended December 31, 2024 .
See “Item 1A. Risk Factors.” Net sales were $43.0 million for the year ended December 31, 2024 compared with $43.9 million a year ago, a decrease of $961,000, or 2%.
See “Item 1A. Risk Factors.” Net sales were $39.8 million for the year ended December 31, 2025 compared with $43.0 million a year ago, a decrease of $3.2 million, or 7%.
It is unclear how changed circumstances in Hong Kong will in the future affect our business, but it is possible that the upheaval in Hong Kong's political and economic affairs or related consequences could adversely affect our future business, results of operations and financial condition. See “Item 1A.
We relocated our corporate headquarters from Hong Kong to California in February 2025. It is unclear how changed circumstances in Hong Kong will in the future affect our business, but it is possible that the upheaval in Hong Kong's political and economic affairs or related consequences could adversely affect our future business, results of operations and financial condition.
We expect to reapply for a direct selling license in China when we believe that circumstances are again ripe for doing so. If we are ultimately able to obtain a direct selling license in China, we believe that the incentives inherent in the direct selling model in China would incrementally benefit our existing business.
If we are ultimately able to obtain a direct selling license in China, we believe that the incentives inherent in the direct selling model in China would incrementally benefit our existing business.
During 2024, were purchased $70.4 million in marketable securities with original maturities greater than three months, and as such, reflect these purchases as an investing activity.
During 2025, we purchased $50.7 million in marketable securities with original maturities greater than three months, and as such, reflect these purchases as an investing activity.
As of December 31, 2024, the ratio of current assets to current liabilities was 2.45 to 1.00 and we had $30.2 million of working capital. Working capital as of December 31, 2024 decreased $14.1 million compared to our working capital as of December 31, 2023. Cash used in operations was $3.4 million and $4.3 million during 2024 and 2023, respectively.
As of December 31, 2025, the ratio of current assets to current liabilities was 2.5 to 1.0 and we had $20.5 million of working capital. Working capital as of December 31, 2025 decreased $9.7 million compared to our working capital as of December 31, 2024. Cash used in operations was $6.0 million and $3.4 million during 2025 and 2024, respectively.
Through a separate Chinese entity, we also operate an e-commerce retail platform in China. We believe that neither of these activities require a direct selling license in China, which we do not currently hold. We previously submitted a preliminary application for a direct selling license in China, but in 2019 a Chinese governmental authority recommended that we withdraw our application.
Through a separate Chinese entity, we also operate an e-commerce retail platform in China. We believe that neither of these activities require a direct selling license in China, which we do not currently hold.
For further information regarding some of the risks associated with our loss of members, see “Item 1A. Risk Factors - Our continuing loss of a significant number of members is adversely affecting our business…”.
For further information regarding some of the risks associated with our loss of members, see “Item 1A. Risk Factors - Our continuing loss of a significant number of members is adversely affecting our business…”. We generate approximately 93 % of our net sales from subsidiaries located outside the Americas.
Subsequent to December 31, 2024, on February 3, 2025, the Board of Directors declared another quarterly cash dividend of $0.20 on each share of common stock outstanding. The dividend will be payable on February 28, 2025 to stockholders of record on February 18, 2025.
Subsequent to December 31, 2025, on February 2, 2026, the Board of Directors declared a quarterly cash dividend of $0.10 on each share of common stock outstanding. The dividend will be payable on February 27, 2026 to stockholders of record on February 17, 2026.
Outside of our Hong Kong business, net sales decreased $1.2 million, or 13%, over the prior year primarily due to decreased year-over-year net sales in our business in the Americas and Taiwan which were somewhat offset by an increase in year-over-year net sales in our Chinese e-commerce retail business.
Outside of our Hong Kong business, net sales decreased $752,000, or 10%, over the prior year primarily due to decreased year-over-year net sales in our Chinese e-commerce retail business.
Risk Factors - Hong Kong's political and economic landscape has in recent years undergone significant change...”. 29 Table of Contents Statement of Operations Presentation We mainly derive revenue from sales of products. Substantially all of our product sales are to independent members at published wholesale prices.
The amount and timing of savings may differ from our current expectations. 29 Table of Contents Statement of Operations Presentation We mainly derive revenue from sales of products. Substantially all of our product sales are to independent members at published wholesale prices.
The decrease was primarily due to lower insurance and other general business expenses . Selling, general and administrative expenses as a percentage of net sales were modestly lower in the current year as compared to the prior year.
Selling, general and administrative expenses as a percentage of net sales increased in the current year as compared with the prior year due to the decrease in net sales in the current year and the one-time restructuring charges recognized in the fourth quarter of 2025.
Income tax paid during A pril 2024 and 2023 for the repatriation tax on the deemed repatriation of deferred foreign income was $4.0 million and $3.0 million, respectively.
Income tax paid during A pril 2025 and 2024 for the repatriation tax on the deemed repatriation of deferred foreign income was $5.1 million and $4.0 million, respectively. Disregarding these payments, cash flows used in operations was $943,000 during 2025 compared with cash flows provided by operations of $602,000 during 2024.
The decline in commissions as a percentage of net sales was primarily due to lower weekly commissions earned during 2024. 32 Table of Contents Selling, General and Administrative Expenses Selling, general and administrative expenses decreased to $15.5 million for the year ended December 31, 2024, as compared to $16.0 million for the year ended December 31, 2023.
Commissions Expense Commissions were 41.0% of net sales for the year ended December 31, 2025, relatively consistent compared with 40.9% of net sales for the year ended December 31, 2024. 32 Table of Contents Selling, General and Administrative Expenses Selling, general and administrative expenses decreased $754,000 to $14.8 million for the year ended December 31, 2025 as compared with $15.5 million for the year ended December 31, 2024.
Hong Kong net sales, substantially all of which were derived from the sale of products shipped to members residing in China, were almost the same as the prior year, increasing $208,000, or 1%, over the prior year.
Hong Kong net sales, substantially all of which were derived from the sale of products shipped to members residing in China, decreased $2.4 million, or 7%, over the prior year primarily due to the negative consumer sentiment as a result of the heightened economic uncertainty caused by the threat of reciprocal and retaliatory tariffs.
We have since been able to substantially resume normal operations in Hong Kong, but Hong Kong's economy is now increasingly integrated with that of China. We relocated our corporate headquarters from Hong Kong to California in February 2025.
This development, along with the impact of the COVID-19 pandemic, led us to cease conducting member meetings and events in Hong Kong for a period of time. We have since been able to substantially resume normal operations in Hong Kong, but Hong Kong's economy is now increasingly integrated with that of China.
Gross Profit Gross profit was 74.0% of net sales for the year ended December 31, 2024 compared with 74.6% of net sales for the year ended December 31, 2023. The decline in gross profit margin was primarily attributable to higher costs related to our Premium Noni juice product.
Gross Profit Gross profit was 73.6% of net sales for the year ended December 31, 2025 compared with 74.0% of net sales for the year ended December 31, 2024. The decline in gross profit margin was due to the write off of components inventory related to discontinued products and products whose manufacturing has transitioned outside the United States.
Risk Factors - Epidemics, natural disasters, terrorist attacks or acts of war…”. In addition to the fact that our Hong Kong subsidiary generates a substantial portion of our overall business, a significant number of our employees are based in Hong Kong.
In addition to the fact that our Hong Kong subsidiary generates a substantial portion of our overall business, a significant number of our employees are based in Hong Kong. The political and economic landscape in Hong Kong has in recent years undergone significant change, largely due to the increasing influence of the Chinese government.
Disregarding these payments, cash flows from operations improved $1.8 million primarily due to improved management of inventories and operating costs during 2024 as compared to the prior year, as well as a timing difference related to weekly commission outflows . Cash used in investing activities totaled $30.1 million and $46,000 during 2024 and 2023, respectively.
The decline in operating cash flows during 2025 is primarily due to both the reduction in product orders received during the year, as well as the decrease in interest income earned on marketable securities during the year. Cash provided by investing activities totaled $8.1 million during 2025 compared with cash used in investing activities of $30.1 million during 2024.
Our effective tax rate for the year ended December 31, 2024 was lower than in the year ended December 31, 2023 primarily because of reduced income in foreign operations during the year ended December 31, 2024. Liquidity and Capital Resources At December 31, 2024, our cash, cash equivalents and marketable securities totaled $43.9 million.
We evaluated the impact of the OBBBA and determined it's provisions do not have a material impact on our overall tax liability both for the current year and in the succeeding years. Liquidity and Capital Resources At December 31, 2025, our cash, cash equivalents and marketable securities totaled $28.9 million.
Removed
We generate approximately 94% of our net sales from subsidiaries located outside the Americas, with sales of our Hong Kong subsidiary representing 82% of net sales in the latest fiscal year.
Added
We previously submitted a preliminary application for a direct selling license in China, but withdrew our application in 2019 upon the recommendation of a Chinese governmental authority. We expect to reapply for a direct selling license in China when we believe that circumstances are again ripe for doing so.
Removed
In late 2019 or early 2020 an outbreak of COVID-19 was first identified in China and subsequently spread quickly around the world, resulting in a global pandemic.
Added
See “Item 1A. Risk Factors - Hong Kong's political and economic landscape has in recent years undergone significant change...”. Beginning in the first quarter of 2025, the U.S. engaged in a series of escalating tariff actions with a wide range of countries, particularly China.
Removed
The pandemic caused the Chinese government to implement powerful measures to control the virus, such as requiring businesses to close throughout various areas of China and restricting public gatherings and certain travel within the country.
Added
On April 2, 2025, for example, the U.S. imposed by executive order a 34% reciprocal tariff on Chinese-origin goods. This was followed by an amended executive order April 8, 2025, raising tariffs to 84% and an April 9, 2025 executive order raising tariffs to 125%. In response, China raised its duties on imported U.S. goods to a similar level.
Removed
Over the course of the pandemic, we took steps to adapt some of our marketing programs, such as relying on certain product promotions and webcast training, to overcome the physical restrictions imposed in response to the pandemic.
Added
Following negotiations, the U.S. announced a temporary 90-day reduction in its reciprocal tariff rates from 125% to 10% beginning in May 2025, and China agreed to suspend its retaliatory tariffs during the same period. The pre-existing 20% U.S. tariff imposed on all Chinese goods remained in place, along with certain other sector-specific tariffs.
Removed
In late 2022, the Chinese and Hong Kong governments took comprehensive steps to relax many of their COVID-19 control measures, although the cumulative effect of these disruptions materially negatively impacted our financial results from 2020 through 2022.
Added
In October 2025, the U.S. administration announced an additional 100% tariff on all products imported from China in response to certain restrictions imposed by China on rare earth minerals, before announcing an agreement that would, among other things, reduce the general tariff rate on Chinese goods to 47%.
Removed
This less restrictive business environment in China and Hong Kong continued throughout 2023 and 2024, and we have been able to sponsor in-person member events in China, Hong Kong and/or Macau during each quarter since the first quarter of 2023. We are continuing to plan and sponsor more such events consistent with normal operations. See “Item 1A.
Added
The state of trade discussions between the U.S. and China (and between the U.S. and other nations) remains dynamic and unpredictable. The Company's fiscal 2025 financial results, particularly beginning in the second quarter, were negatively affected by negative consumer sentiment and economic uncertainty in the Company’s largest market.
Removed
The political and economic landscape in Hong Kong has in recent years undergone significant change, largely due to the increasing influence of the Chinese government. This development, along with the impact of the COVID-19 pandemic, led us to cease conducting member meetings and events in Hong Kong for a period of time.
Added
If substantial tariffs remain in place, or new tariffs are implemented, the Company may see the effect of higher duties on restocking in 2026. The likely short-term impact of the tariffs is difficult to predict with any certainty, however.
Removed
Commissions Expense Commissions were 40.9% of net sales for the year ended December 31, 2024 compared with 41.9% of net sales for the year ended December 31, 2023.
Added
We may need to impose a surcharge on products sold into China, and the imposition of such a surcharge may have a further negative effect on sales volumes into China.
Removed
The tax provision for 2023 primarily resulted from the impact of Subpart F income inclusion, limitations on executive compensation under Internal Revenue Code Section 162(m), and income tax expense from various foreign jurisdictions.
Added
In the longer term, the Company has taken steps to transition production of certain of its products currently manufactured in the United States to other jurisdictions, including in Asia, in order to mitigate the effect of U.S. and reciprocal tariffs.
Removed
W e expect to continue paying a quarterly cash dividend of $0.20 on each share of common stock outstanding for the foreseeable future .
Added
If successfully implemented, this transition may result in savings in logistics, freight and manufacturing cost, but may also carry certain short-term expenses, including the cost of reregistration of products in certain jurisdictions. The Company is actively evaluating its options and the impact of trade policy changes on future quarters remains uncertain.
Added
In addition, it is difficult to predict the further effect of general consumer sentiment in China toward the Company’s products as a result of the trade policies adopted by the United States and China, which has already impacted the Company’s second and third quarters. See “Item 1A. Risk Factors - Changes in government trade and economic policies...”.
Added
Recent Developments During 2025, in response to continued challenging near-term economic conditions in our largest market and continued pressure on consumer sentiment, management implemented a restructuring plan designed to better align our operating cost structure with current business conditions. The restructuring plan included actions to optimize our workforce, relocate certain product manufacturing activities to Asia, and downsize several offices.
Added
We recognized $283,000 of restructuring-related charges during the fourth quarter of 2025. As of December 31, 2025, we were substantially complete with the major restructuring initiatives. We expect these actions to generate approximately $1.5 million in annualized cost savings, though not all of these savings are expected to be realized during 2026 due to the timing of certain facility-related actions.
Added
Gross profit margin for the year ended December 31, 2025 would be comparable to the prior year without these write offs.
Added
The decrease was primarily due to lower employee-related expenses, professional fees and event costs as compared to the prior year.
Added
The tax provision for 2025 primarily resulted from the impact of deferred income tax expense from various foreign jurisdictions, particularly China, resulting in an increase in our effective tax rate for the year ended December 31, 2025. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.
Added
The OBBBA includes significant tax law changes, including the permanent extension of certain provisions from the U.S. Tax Cuts and Jobs Act, modifications to the international tax framework, and the reinstatement of favorable business tax provisions.
Added
These include 100% bonus depreciation, immediate expensing of Section 174 domestic research and experimental expenditures, and revised limitations under Section 163(j) on the deductibility of business interest expense. The legislation has multiple effective dates, with certain provisions effective beginning in 2025, and others implemented through 2027.
Added
On February 17, 2026, we entered into a share repurchase agreement to repurchase 2,935,227 shares of common stock, representing approximately 25.5% of our outstanding shares, from the George K. Broady 2012 Irrevocable Trust and the Eleanor Jane Broady 2012 Irrevocable Trust at a price of $2.00 per share, for an aggregate purchase price of approximately $5.9 million.
Added
The repurchase, funded from the Company’s existing cash on hand, was completed pursuant to our previously authorized $70.0 million share repurchase program. Following completion of the transaction, we have 8,577,848 shares of common stock outstanding and approximately $16.0 million remaining available under the share repurchase program, inclusive of estimated income tax effects.

Other NHTC 10-K year-over-year comparisons