Note 10 - Segment Information

9 Months Ended

Sep. 30, 2026

Notes to Financial Statements

Segment Reporting [Text Block]

10. SEGMENT INFORMATION

The Company sells products to a member network that operates in a seamless manner from market to market, except for the China market where it sells to some consumers through an e-commerce retail platform, and the Russia and Kazakhstan market where the Company’s engagement of a third-party service provider results in a different economic structure than its other markets. The Company believes that all of its other operating segments have similar economic characteristics and are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment. Therefore, the Company aggregates its other operating segments (including its Hong Kong operating segment) into a single reporting segment (the “Primary Reporting Unit”).

The Company’s CODM is its President, who reviews financial information presented on a geographic basis. The CODM primarily uses net sales, gross profit and operating profit in assessing segment performance and determining the allocation of resources. The CODM also uses gross profit for evaluating pricing strategy. The CODM is the primary individual in control of resource allocation, and the allocation determinations are generally made in consultation with senior management, which the CODM is a member. Segment operating income is adjusted for certain direct costs and commission allocations. The CODM also regularly reviews inventory information by operating segment in assessing segment performance and determining the allocation of resources.

The Company’s financial information by segment is as follows (in thousands):

	Three Months Ended September 30, 2026											Three Months Ended September 30, 2025
	Primary Reporting Unit		China			Russia and Kazakhstan			Total			Primary Reporting Unit		China			Russia and Kazakhstan			Total
Net sales	$	7,342	$	136		$	82		$	7,560		$	9,135	$	237		$	105		$	9,477
Cost of sales		1,891		26			37			1,954			2,392		50			48			2,490
Gross profit		5,451		110			45			5,606			6,743		187			57			6,987
Less:
Commissions expense1		2,683		—			27			2,710			3,832		—			44			3,876
Employee-related costs		856		198			7			1,061			966		224			14			1,204
Facility costs		193		34			5			232			311		36			3			350
Other segment items2		386		54			10			450			398		58			11			467
Segment income (loss) from operations	$	1,333	$	(176	)	$	(4	)		1,153		$	1,236	$	(131	)	$	(15	)		1,090
Reconciliation of loss before income taxes:
Unallocated corporate expenses										(1,430	)										(1,585	)
Other income, net										112											206
Loss before income taxes									$	(165	)									$	(289	)

	Nine Months Ended September 30, 2026											Nine Months Ended September 30, 2025
	Primary Reporting Unit		China			Russia and Kazakhstan			Total			Primary Reporting Unit		China			Russia and Kazakhstan			Total
Net sales	$	23,558	$	573		$	238		$	24,369		$	29,034	$	690		$	303		$	30,027
Cost of sales		5,904		119			116			6,139			7,564		152			164			7,880
Gross profit		17,654		454			122			18,230			21,470		538			139			22,147
Less:
Commissions expense1		9,592		—			82			9,674			12,240		—			136			12,376
Employee-related costs		2,618		644			37			3,299			2,951		677			40			3,668
Facility costs		827		105			11			943			890		107			9			1,006
Other segment items2		1,160		161			30			1,351			1,335		203			35			1,573
Segment income (loss) from operations	$	3,457	$	(456	)	$	(38	)		2,963		$	4,054	$	(449	)	$	(81	)		3,524
Reconciliation of loss before income taxes:
Unallocated corporate expenses										(4,357	)										(4,697	)
Other income, net										597											1,019
Loss before income taxes									$	(797	)									$	(154	)

¹ Our China subsidiary maintains an e-commerce retail platform and does not pay commissions.

² Other segment items include credit card fees and assessments, marketing-related costs, professional fees and other business expenses.

The Company's segment assets are as follows (in thousands):

	September 30, 2026								December 31, 2025
	Primary Reporting Unit		China		Russia and Kazakhstan		Total		Primary Reporting Unit		China		Russia and Kazakhstan		Total
Inventories	$	1,138	$	149	$	37	$	1,324	$	1,496	$	142	$	39	$	1,677
Other inventories and inventory-related deposits1								867								444
Other assets2								25,070								36,307
Total assets							$	27,261							$	38,428

¹ Other inventories and inventory-related deposits pertain to the Company's trading company and are not specific to any of the Company's operating segments.

² Other assets primarily include cash, cash equivalents and marketable securities, but also includes all other current and noncurrent assets.

The Company’s net sales by geographic area are as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net sales from external customers:
United States	$	168	$	302	$	622	$	887
Canada		70		128		231		359
Peru and Colombia		289		301		880		870
Hong Kong1		6,296		7,715		20,196		24,842
China		136		237		573		690
Taiwan		283		331		895		1,049
Japan		24		111		102		257
Malaysia and Singapore		44		67		132		199
Russia and Kazakhstan		82		105		238		303
Europe		122		130		374		400
Other foreign countries		46		50		126		171
Total net sales	$	7,560	$	9,477	$	24,369	$	30,027

¹ Substantially all of the Company's Hong Kong revenues are derived from the sale of products that are delivered to members in China. See “Item 1A. Risk Factors” in our most recent Annual Report on Form 10-K.