Like **Herbalife** for health and beauty products sold through a direct selling model.

A publicly traded **Nu Skin** focusing on wellness, skincare, and household products.

Similar to **Amway** but with a primary focus on health and beauty supplements and personal care.

• Nutritional Supplements: Products designed to support general health and enhance bodily functions through vitamins, minerals, and other dietary ingredients.
• Herbal Supplements: Specialized health products derived from natural plant extracts and botanicals, often targeting specific wellness needs.
• Beauty and Skincare Products: A line of anti-aging, cosmetic, and personal care items aimed at improving skin health and appearance.
• Lifestyle Products: Various other non-consumable goods and general well-being items offered to enhance daily living.

Natural Health Trends (NHTC) operates primarily as a direct-selling and e-commerce company, selling its products directly to individuals rather than to other companies. Its customer base can be categorized as follows:

1. Independent Distributors and Members: These are individuals who sign up with NHTC to purchase products, often at a discounted rate. They serve multiple roles: consuming products for personal use, reselling products to their own networks of customers, and recruiting new distributors to build their sales organizations. This group represents a significant portion of NHTC's direct sales, as they are the primary purchasers from the company.
2. End-Consumers/Retail Customers: These individuals purchase NHTC's health and wellness, skincare, and other lifestyle products for personal consumption. They acquire products either directly from NHTC's independent distributors or, in some cases, directly from NHTC's e-commerce platform. Their primary interest is in the perceived benefits and quality of the products themselves.

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Chris T. Sharng President and Director

Mr. Sharng was appointed President of Natural Health Trends in February 2007. He previously served as Executive Vice President and CFO of Natural Health Trends from August 2004 to February 2007. Prior to his tenure at Natural Health Trends, Mr. Sharng held management positions as CFO of NorthPole Limited, Senior Vice President and CFO of Ultrak Inc., and Vice President of International Finance at Mattel, Inc.

Scott Davidson Senior Vice President and Chief Financial Officer

Mr. Davidson has served as Natural Health Trends' Senior Vice President and CFO since February 2007. He was previously the company's Chief Accounting Officer from September 2004 to February 2007. Before joining Natural Health Trends, Mr. Davidson held roles as Manager of Financial Reporting for IP Communications, Inc. from February 2000 to February 2001, Corporate Controller for Celion Networks, Inc. from March 2001 to September 2004, and Audit Manager for Arthur Andersen, LLP from December 1994 through January 2000.

Randall A. Mason Chairman of the Board

Mr. Mason has been a director of Natural Health Trends since May 2003 and has served as Chairman of the Board of Directors since March 2006. He founded and has served as President and Chief Executive Officer of Marden Rehabilitation Associates, Inc. since 1989. Marden Rehabilitation Associates, Inc. is a private, Midwest U.S. ancillary provider of rehabilitative therapy services and home healthcare.

The key risks to Natural Health Trends (NHTC) business are:

1. Geopolitical and Market Concentration Risk: A substantial portion of Natural Health Trends' business, specifically 83% of its sales in Q2 2025, is routed through Hong Kong to mainland China, with 93% of overall sales generated outside the Americas. This creates significant exposure to geopolitical tensions, new U.S./China tariffs, political shifts in Hong Kong, and the ongoing challenge of operating without a direct-selling license in mainland China, which has been highlighted as a material uncertainty.
2. Sustained Revenue Erosion and Declining Sales: The company has experienced ongoing revenue erosion and declining sales. In Q2 2025, net sales decreased by 6% compared to the same period in 2024, attributed to heightened economic uncertainty and evolving trade tensions. Full-year 2024 revenue also saw a 2% decrease compared to 2023, and these trends have contributed to negative cash flow and increased operating losses.
3. Regulatory and Legal Risks of Direct-Selling Model: Natural Health Trends operates primarily through a direct-selling and e-commerce model, which carries inherent regulatory and legal risks, particularly in markets like China. The company has faced past allegations, including claims of operating as a pyramid scheme in China, which it has denied. Although a U.S. SEC investigation concluded in 2021 without enforcement action, the direct-selling industry, especially in international markets, remains subject to strict and evolving regulations, and compliance challenges can significantly impact operations and reputation.

There are two clear emerging threats for Natural Health Trends (NHTC):

1. Evolving and Intensified Regulatory Scrutiny on Multi-Level Marketing (MLM) Models: Regulators, particularly in NHTC's crucial Asian markets like China, are increasingly scrutinizing direct selling compensation plans, product claims, and recruitment practices. This heightened oversight can lead to operational restrictions, fines, or changes in business practices that directly impact NHTC's ability to operate its established MLM model, recruit distributors, and generate revenue. The regulatory environment for MLM companies has historically been unpredictable and is trending towards stricter enforcement globally, posing a significant risk to NHTC's fundamental business structure.

2. Shifting Consumer Preferences and Increased Competition from Direct-to-Consumer (D2C) E-commerce Brands: Younger generations of consumers are exhibiting growing skepticism towards the traditional MLM model, often preferring to purchase health and wellness products directly from digitally native D2C brands. These new competitors leverage e-commerce, social media marketing, and transparent supply chains to offer products directly to consumers, often at competitive prices, bypassing the multi-tiered direct selling network. This trend makes it harder for NHTC to attract new customers and distributors while increasing competitive pressure from more agile, digitally focused rivals that offer a simpler and often more trusted purchasing experience.

Here are the expected drivers of future revenue growth for Natural Health Trends (NHTC) over the next 2-3 years:

1. Launch and Growth of New Products: Natural Health Trends is actively introducing new products to stimulate sales. Examples include the planned rollout of Skindulgence revitalizing serum and eye cream, a new collagen supreme supplement flavor, and Root Revive hair growth serum in Turkey. Additionally, the company launched Twin Slim Coffee and Tomato Soup products in China and Hong Kong, which have been well-received. A September 2025 prelaunch of the "Soo:vea" Korean skincare series in Hong Kong and a limited edition anti-aging cream in Sweden also signify new product introductions designed to attract customers.
2. Expansion into New Geographical Markets: The company is strategically expanding its market presence to diversify revenue streams. A key initiative is the establishment of a new office in Bogotá, Colombia, which will serve as a regional hub for the Latin American market. This builds on earlier expansion into the Colombian market in late 2024. Management also views Asia as fundamental to its long-term growth strategy due to its significant consumer base and established member network.
3. Investment in AI-driven Marketing Technologies and Enhanced Member Engagement: Natural Health Trends is investing in new systems and technologies, including an AI-enabled marketing app and a member interface business suite, alongside new marketing initiatives to drive growth and engagement. The company also plans global programs and incentives to support member success, and a year-long 25th-anniversary celebration in 2026 aims to deepen member engagement and create new growth opportunities.
4. Strategic Restructuring and Cost Savings: While not a direct revenue driver, NHTC's ongoing major restructuring plan is expected to generate $1.5 million in annualized savings by mid-2026. These freed-up resources will be reallocated to drive top-line growth, invest in new systems and technologies, and implement global programs and incentives, thereby indirectly supporting future revenue expansion. The restructuring efforts aim to align operational costs with global sales performance and position the company for improved profitability and value creation.

Share Repurchases

• Natural Health Trends repurchased $53,000 worth of shares in 2020.
• In 2021, the company repurchased $836,000 worth of its common stock.
• As of December 31, 2023, $21.9 million remained available under the ongoing $70.0 million stock repurchase program. This amount remained unchanged as of September 30, 2025.

Share Issuance

• On February 6, 2023, Natural Health Trends granted 97,900 shares of restricted common stock to certain employees.
• Share-based compensation, which reflects the value of shares issued as compensation, was $109,000 for the first nine months of 2024.
• Share-based compensation was $103,000 for the first nine months of 2025.

Capital Expenditures

• Capital expenditures for the first six months of 2022 were $78,000.
• For the first six months of 2023, capital expenditures were $14,000.
• Capital expenditures amounted to $30,000 for the first six months of 2024 and $20,000 for the first six months of 2025.