NHTC — what changed in the latest 10-Q

Text added vs the prior filing · source: 10-Q · 2026-07-29

• Chinese regulatory uncertainty. On May 29, 2026, China’s State Administration for Market Regulation (SAMR) released for public comment a draft revision to China’s Regulations on Prohibition of Pyramid Selling. The draft appears designed to strengthen China’s anti-pyramid-selling enforcement framewor…

• Independent Member Activities. During the second quarter of 2026, certain independent members, including certain sales leaders, engaged in conduct that violated our policies, procedures and professional code of conduct. This conduct disrupted portions of our independent member network and adversely …

• Net sales were $16.8 million for the six months ended June 30, 2026 compared with $20.6 million for the comparable period a year ago, a decrease of $3.7 million, or 18%. Hong Kong net sales, substantially all of which were derived from the sale of products shipped to members residing in China, decre…

• Gross profit was 75.2% of net sales for the three months ended June 30, 2026 compared with 73.9% of net sales for the three months ended June 30, 2025. Gross profit was 75.1% of net sales for the six months ended June 30, 2026 compared with 73.8% of net sales for the six months ended June 30, 2025. …

• Commissions were 40.9% of net sales for each of the three months ended June 30, 2026 and 2025. Commissions were 41.4% of net sales for each of the six months ended June 30, 2026 and 2025. Despite lower weekly commissions earned by our members during the first six months of 2026 as compared to the co…

Text removed vs the prior filing · source: 10-Q · 2026-04-29

• Gross profit was 75.0% of net sales for the three months ended March 31, 2026 compared with 73.6% of net sales for the three months ended March 31, 2025. The improvement in gross profit margin for the three months ended March 31, 2026 was primarily due to the transition of our product manufacturing …

• Commissions were 41.8% of net sales for each of the three months ended March 31, 2026 and 2025. Despite lower weekly commissions earned by our members during the first three months of 2026 as compared to the comparable period last year, commissions as a percentage of net sales were on par with last …

• Selling, general and administrative expenses declined by $238,000 to $3.5 million for the three months ended March 31, 2026 as compared with $3.8 million for the three months ended March 31, 2025. The decrease was primarily due to lower employee-related expenses and event costs during the current ye…

• Other income was $295,000 for the three months ended March 31, 2026 compared with $465,000 in the same period a year ago. The decrease was primarily due to less interest income earned during the current year period.

• An income tax benefit of $25,000 and $2,000 was recognized during the three months ended March 31, 2026 and 2025, respectively. The tax provision during the three-month periods ended March 31, 2026 and 2025 primarily resulted from foreign income inclusions, such as Net CFC Tested Income (“NCTI”) and…

Text added vs the prior filing · source: 10-Q · 2026-07-29

• 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 contrast to our operations in other parts of the world, our China subsidiary has not implemented a direct sales model in China. The Chinese government permits direct selling only by organizations that have a license and has also adopted anti-pyramid selling and multi-level marketing legislation. …

• 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 …

• We continually evaluate our business in China and Hong Kong for compliance with applicable laws and regulations, including seeking the input of outside professionals and certain Chinese authorities. This process can and has resulted in the identification of certain matters of potential noncompliance…

• Should the government authorities determine that our activities violate applicable laws and regulations, including China’s direct selling, pyramid selling or multi-level marketing laws and regulations, or should new laws or regulations be adopted, there could be a material adverse effect on our busi…