SUBSEQUENT EVENTS (Notes)

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events [Text Block]

SUBSEQUENT EVENTS

In February 2023, the Daegu Customs Office began an audit of our Korean subsidiary, Mannatech Korea, reviewing point of origin for compliance with free trade agreement terms. Several products imported between July 2017 and December 2021 were identified as subjects of this audit. Depending on the outcome of this audit, duty tariff rates could be modified, which could result in additional customs, value added taxes and penalties. The audit was completed in April 2023 with one product requiring duty tariff modification. The Company estimates the financial impact from this audit on its results of operations, financial condition, or liquidity to be $0.1 million for fiscal year 2023.

On April 20, 2023, the Company was one of nearly 700 other companies to receive a letter from the Federal Trade Commission (“FTC”) regarding Notices of Penalty Offenses Concerning Substantiation of Product Claims and Deceptive or Unfair Conduct around Endorsements and Testimonials. The letters put companies on notice that they should be aware of what constitutes unlawful misrepresentation of adequate claim substantiation as well as unlawful acts and practices pertaining to endorsements and testimonials. As the FTC made clear in the letter, receipt of the letter is not a determination of wrongdoing. From a procedural standpoint, the FTC must file a formal action if it determines that the Company is in violation of the parameters laid out in the letter and then would have to undergo an administrative hearing process. The letter is the first step in a process for the FTC to impose “civil monetary penalties of up to $50,120 per violation.” To the Company’s knowledge, there is no formal action against the Company at this time. We cannot predict what effect additional governmental regulations, judicial decisions, or administrative orders, when and if promulgated, would have on our business.